The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents of this Post Hearing Information Pack, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Post Hearing Information Pack. Post Hearing Information Pack of Qingdao Gon Technology Co., Ltd. 青島國恩科技股份有限公司 (the "Company") (A joint stock co ...

Application Proof of Qingdao Gon Technology Co., Ltd. 青島國恩科技股份有限公司 (the "Company") The Stock Exchange of Hong Kong Limited and the Securities and Futures Commission take no responsibility for the contents of this Application Proof, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Application Proof. (A joint stock company incorporated in the People's R ...

Group 1: Trade Tensions - The recent market drop was triggered by renewed trade tensions between the US and China, raising concerns of a potential trade war [1] - China announced plans to impose export controls on rare earth elements, which are critical for various industries, including smartphones, electric vehicles, and military systems [2] - China currently dominates approximately 70% of the global supply of rare earths, providing it with significant leverage in this sector [2] Group 2: Market Reactions - In response to China's actions, President Trump announced new tariffs on Chinese imports, with some tariffs reaching up to 100%, causing a significant market decline [3] - The S&P 500 fell by 2.71%, and the Nasdaq dropped by 3.56% following the announcement of tariffs [3] - Trump's subsequent comments suggesting that "it will all be fine" helped to calm investors, leading to a recovery in U.S. stocks [3] Group 3: Investment Opportunities - Despite market volatility, analysts suggest that pullbacks can create attractive entry points for quality stocks [4] - Bank of America analysts have identified two stocks that they believe present solid investment opportunities [4] Group 4: Darling Ingredients Overview - Darling Ingredients operates in recycling, food technology, and agribusiness, focusing on converting waste materials into valuable products [5] - The company produces animal feeds, human food products, and renewable biofuels, making it the largest rendering company in the global feed market [6] - Darling is recognized as a global leader in gelatin and collagen solutions, with 16 factories worldwide and sales in over 80 countries [7] Group 5: Joint Venture and Revenue Projections - Darling Ingredients has formed a joint venture with Tessenderlo Group called Nextida, which will focus on their collagen and gelatin segments [7] - The joint venture is projected to generate $1.5 billion in revenue and will be 85% owned by Darling [7]

Financial Data and Key Metrics Changes - Combined adjusted EBITDA for Q2 2025 was $249.5 million, down from $273.6 million in Q2 2024, while year-to-date combined adjusted EBITDA totaled $445.3 million compared to $553.7 million for the same period in 2024 [13][14] - Total net sales in Q2 2025 were $1.48 billion, slightly up from $1.46 billion in Q2 2024, with raw material volume remaining nearly unchanged at approximately 3.74 million metric tons [14] - Gross margins improved to 23.3% in Q2 2025 from 22.5% in Q2 2024, with year-to-date gross margins at 23% compared to 21.9% in the first half of 2024 [14][16] Business Line Data and Key Metrics Changes - In the Feed Ingredients segment, total net sales increased to $936.5 million in Q2 2025 from $934.1 million in Q2 2024, with gross margins improving to 22.9% from 21% [15][16] - The Food segment saw total sales rise to $386.1 million in Q2 2025 from $378.8 million in Q2 2024, with gross margins unchanged at 26.9% [17] - The Fuel segment's sales for Q2 2025 were $158.8 million, up from $142.3 million in Q2 2024, but the share of DGD EBITDA dropped to $42.6 million from $76.6 million year-over-year [19][20] Market Data and Key Metrics Changes - The regulatory environment has shown signs of improvement, particularly in the Feed segment, which is expected to enhance performance into 2026 [6] - Tariff volatility and increased domestic oilseed crush have pressured protein prices, especially in Asia, but rising fat prices are expected to support the Feed segment [7][11] - The renewable fuel environment remains challenging, with DGD facing near-term pressure but expected to benefit from policy support in the long term [11][12] Company Strategy and Development Direction - The company announced the formation of NexTata, a joint venture focused on health and wellness, aligning with its strategy to diversify into high-margin markets [6] - The company is focused on operational discipline and strategic timing to position itself for improved margins in the future [12] - The outlook for the core ingredients platform remains strong, with expectations for sequential improvement driven by rising fat prices [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the core ingredients business, anticipating a more constructive market environment ahead [24][25] - The company expects full-year combined adjusted EBITDA in the range of $1.05 billion to $1.1 billion, reflecting optimism about market recovery [26] - Management acknowledged challenges in the renewable fuel sector but highlighted the potential for margin recovery as policy rules clarify [12][24] Other Important Information - The company successfully refinanced its Eurobond and replaced its revolving credit facility, enhancing financial flexibility [21][22] - Total debt net of cash decreased to $3.89 billion as of June 28, 2025, from $3.97 billion at the end of 2024, lowering the leverage ratio to 3.34 times [22] - The effective tax rate for Q2 2025 was 22.2%, slightly above the federal statutory rate, with expectations for a full-year effective tax rate around 15% [23] Q&A Session Summary Question: Discussion on policy benefits for domestic renewable diesel - Management noted that evolving domestic markets are expected to reduce reliance on imported raw materials, benefiting U.S. fat pricing and production [28][30] Question: Outlook for LCFS prices - Management indicated that carbon prices are moving positively, with expectations for further increases in the coming years [34] Question: Impact of lower UCO pricing - Management explained that pricing dynamics in a rising market can lead to temporary impacts on margins, but they expect improvements as prices stabilize [37][41] Question: Opportunities for DGD outside California - Management confirmed that while California is a significant market, they also export renewable diesel to Europe and other states, with demand growing globally [48][50] Question: Expectations for SREs - Management expressed uncertainty regarding the timing and impact of SREs but indicated that they expect an announcement soon [51][55] Question: CapEx plans and capital allocation - Management emphasized a commitment to maintaining capital discipline, with plans to keep CapEx below $400 million for the year while focusing on debt reduction [102][104]

Financial Performance - Total Net Sales increased by 1.8% to $1,481.5 million in Q2 2025 compared to $1,455.3 million in Q2 2024[4] - Gross Margin increased by 5.8% to $345.9 million in Q2 2025 compared to $326.9 million in Q2 2024[4] - Net Income decreased significantly by 83.9% to $12.7 million in Q2 2025 compared to $78.9 million in Q2 2024[4] - EPS Diluted decreased by 83.7% to $0.08 in Q2 2025 compared to $0.49 in Q2 2024[4] - Total combined adjusted EBITDA decreased by 8.8% to $249.5 million in Q2 2025 compared to $273.6 million in Q2 2024[4] Segment Performance - Feed segment adjusted EBITDA increased by 11.3% to $135.9 million in Q2 2025 compared to $122.1 million in Q2 2024[4] - Food segment adjusted EBITDA decreased by 4.5% to $69.9 million in Q2 2025 compared to $73.2 million in Q2 2024[4] - Fuel segment adjusted EBITDA decreased by 29.1% to $61.3 million in Q2 2025 compared to $96.8 million in Q2 2024[4] Balance Sheet - Cash and cash equivalents were $95 million as of June 28, 2025, compared to $76 million as of December 28, 2024[5] - Total debt was $3,980 million as of June 28, 2025, compared to $4,042 million as of December 28, 2024[5]