CXL - Calix Limited

[Country Lad]

I love the ones that predictably follow the script. Up another 7% so far today, although losing momentum at the moment.

 

[Dona Ferentes]

the market is encouraged. We'll get that $3 soon enough:

And that was on Monday. ????

 

[So_Cynical]

the market is encouraged. We'll get that $3 soon enough:

Smashed through 3 dollars, was thinking today that with all the take overs happening and the world flush with cheap money, Calix with a market cap of 470m and all that green - blue sky technology, at some point a VC firm will have a crack at them.

 

[Dona Ferentes]

Smashed through 3 dollars, ........
at some point a VC firm will have a crack at them.

I hope not. What skills can some financial engineer bring to managing change?

It has got to be encouraging, with large cap industrial outfits, those involved in the LEILAC process, signing MoUs with Calix before the #2 plant results are out. But the technology has applications beyond one industry, so it is up to CXL to keep the knowledge and grow effectively.

 

[So_Cynical]

I hope not. What skills can some financial engineer bring to managing change?

I dont like it either but thats how the world works - i have knack of buying stocks that get taken over.

I'm sure there would be VC sharks looking at Calix right now. The recent Tarmax MOU said that terms for ongoing licencing are still be figured out, Calix could end up getting an ongoing licencing stream from multiple Calciner installations around the world, licencing money is free money that can flow for decades.

 

[Dona Ferentes]

From today's Investor Presentation

Progress since our March 2021 capital raise
Sustainable Processing: Magnesia refractories – another industry striving for net zero
• Phase 2 testing underway
• July 2021: MOU with RHI Magnesita for Calix Technology kiln for (magnesia) refractories
• Covers concept to Pre-Front End Engineering and Design for a commercial-scale facility
• 25kTpa CO2 separation capacity
• Fuel options include renewable electricity

Sustainable Processing : Spodumene – supplying the majority of global lithium
• May 2021: MOU with Pilbara Minerals Limited (PLS)
• Co-development of a “mid-stream” lithium chemicals refinery utilising the Calix Technology
• Phase 1: Scoping Study target late 2021
• Phase 2: If successful - JV formation target H1 2022 and FEED study
• Phase 3: If successful Demonstration Plant JV target 2024

CO2 Mitigation line of business
• Successful test campaign conclusion –LEILAC-1
• March 2021: LEILAC-2 Project passes pre-Front End Engineering and Design Milestone
• On-track for Final Investment Decision (FID) in early 2022
Project descriptions being developed with 6 cement companies and 2 other lime companies (after Adbri and Tarmac)

Growing legislative pressures and incentives continue
… Our initial target markets, the EU and US, have made significant moves in the last two months…
EU update ... July 2021
• CO2 EU ETS permit price doubles since 2019 to over €55/tonne
• EU introduces even more strict / ambitious targets in draft legislation
•55% reduction by 2030 from 1990 levels
•Maritime shipping to be included for the first time in CO2 caps

USA update May–June 2021
• Various Acts being introduced into congress and senate looking to increase EOR to $US50 - 60 and GS to US$85 / tonne CO2 + min. facility size dropped to 10kTpa, claimable out to 20 years

 

[John208888]

Smashed through 3 dollars, was thinking today that with all the take overs happening and the world flush with cheap money, Calix with a market cap of 470m and all that green - blue sky technology, at some point a VC firm will have a crack at them.

0% chance, they are growing very slowly, their technology has been knocked back by heidelberg cement and their pretend battery technology is only there to take focus off the fact that they have lost 30% of their turnover in the USA, their claim of growth there is based on the fact that they only included half a year of the first year for the 2020 return compared to a full year in 2021. Even their "core" market of Australia has reduced from 4.29 - 3.4m turnover. If you buy Calix you are being hoodwinked.

 

[John208888]

From today's Investor Presentation

Progress since our March 2021 capital raise
Sustainable Processing: Magnesia refractories – another industry striving for net zero
• Phase 2 testing underway
• July 2021: MOU with RHI Magnesita for Calix Technology kiln for (magnesia) refractories
• Covers concept to Pre-Front End Engineering and Design for a commercial-scale facility
• 25kTpa CO2 separation capacity
• Fuel options include renewable electricity

Sustainable Processing : Spodumene – supplying the majority of global lithium
• May 2021: MOU with Pilbara Minerals Limited (PLS)
• Co-development of a “mid-stream” lithium chemicals refinery utilising the Calix Technology
• Phase 1: Scoping Study target late 2021
• Phase 2: If successful - JV formation target H1 2022 and FEED study
• Phase 3: If successful Demonstration Plant JV target 2024

CO2 Mitigation line of business
• Successful test campaign conclusion –LEILAC-1
• March 2021: LEILAC-2 Project passes pre-Front End Engineering and Design Milestone
• On-track for Final Investment Decision (FID) in early 2022
Project descriptions being developed with 6 cement companies and 2 other lime companies (after Adbri and Tarmac)

Growing legislative pressures and incentives continue
… Our initial target markets, the EU and US, have made significant moves in the last two months…
EU update ... July 2021
• CO2 EU ETS permit price doubles since 2019 to over €55/tonne
• EU introduces even more strict / ambitious targets in draft legislation
•55% reduction by 2030 from 1990 levels
•Maritime shipping to be included for the first time in CO2 caps

USA update May–June 2021
• Various Acts being introduced into congress and senate looking to increase EOR to $US50 - 60 and GS to US$85 / tonne CO2 + min. facility size dropped to 10kTpa, claimable out to 20 years

T

hey are growing very slowly, their technology has been knocked back by heidelberg cement and their pretend battery technology is only there to take focus off the fact that they have lost 30% of their turnover in the USA, their claim of growth there is based on the fact that they only included half a year of the first year for the 2020 return compared to a full year in 2021. Even their "core" market of Australia has reduced from 4.29 - 3.4m turnover. If you buy Calix you are being hoodwinked.

I love the ones that predictably follow the script. Up another 7% so far today, although losing momentum at the moment.

View attachment 127100

Eventually it will all come to light, they are growing very slowly, their technology has been knocked back by heidelberg cement and their pretend battery technology is only there to take focus off the fact that they have lost 30% of their turnover in the USA, their claim of growth there is based on the fact that they only included half a year of the first year for the 2020 return compared to a full year in 2021. Even their "core" market of Australia has reduced from 4.29 - 3.4m turnover. If you buy Calix you are being hoodwinked.

 

[Dona Ferentes]

Nice downramp.

Investor Day tomorrow, ... Pushed through $4 today.

 

[So_Cynical]

0% chance, they are growing very slowly, If you buy Calix you are being hoodwinked.

From 3 dollars to 4 dollars in 8 weeks, SP has doubled in 6 months, Calix like 100 other tech and new economy stocks is being priced on pure potential and speculation, and thats fine for me, haven't bought since $1 something.

 

[Country Lad]

Eventually it will all come to light, they are growing very slowly, their technology has been knocked back by heidelberg cement and their pretend battery technology is only there to take focus off the fact that they have lost 30% of their turnover in the USA, their claim of growth there is based on the fact that they only included half a year of the first year for the 2020 return compared to a full year in 2021. Even their "core" market of Australia has reduced from 4.29 - 3.4m turnover. If you buy Calix you are being hoodwinked.

I think it is appropriate to call out misrepresentation of the facts when they occur here as all the members no doubt would like to have confidence that statements made here are based on fact.

@John208888, I think your credibility has suffered a terminal hit, and only after your second post.

You say that: "their technology has been knocked back by heidelberg cement"

The fact from the release of the go-ahead for LEILAC-2:
HeidelbergCement, again displaying significant support and willingness to support very novel carbon capture technology developments, has kindly agreed to closely integrate the Demonstration plant into one of their operational plants in Germany. Engineering, supported by HeidebergCement, IKN, CIMPOR, Certh, Polimi and Calix, has commenced on this ambitious build. With the aim of achieving a commercially relevant solution as quickly as possible, and addressing the main remaining risks as fully as possible, this plant aims to become operational by 2023.

Not only that, the consortium is joined by CEMEX:

The European Commission officially approved CEMEX joining the LEILAC-2 Project following unanimous support from the LEILAC-2 consortium. The LEILAC-2 Project is focussed on scaling Calix’s CO2 mitigation technology for the cement and lime industries to demonstration scale at HeidelbergCement’s Hannover cement plant, following a successful piloting of the technology via the LEILAC-1 Project in Belgium.

You also say they have lost 30% of their turnover in the USA,

The way I read the annual reports they say that the turnover in USA:
2020 $ 9,772,084
2021 $18,202,258

To me that looks more like nearly double, not a 30% drop.

Just for the record, the USA profit:
2020 loss $660,400
2021 profit $920,076

As @Dona Ferentes said, "Nice downramp." I am not even interested why.

 

[paulkim1211]

8.5% drop in the last few days. Many say it's correction, but I believe it's more than that.

Calix Limited CXL.ASX, share buyers are following the greater fool theory, which is when one buys shares in a company with no chance of making a dividend return and hopes that someone will pay them more for those shares (a greater fool), obviously a fundamentally flawed strategy. With even a basic analysis it is obvious the company has little hope of ever turning a profit, on current trend (without further acquisitions as there are currently none planned) turnover in the core market of Australia has reduced by 20%, turnover in the usa acquisition has reduced by 20%.

The battery technology is going up against Samsung and Panasonic, who are the market leaders for a very good reason, even in the best case scenario Calix would need to produce their own batteries and then wait for a contract to expire with a car company to try to compete, so best case in 15 years they may see some return, but if I was a gambler i’d say the odds are worse than 1,000,000 :1.

So that leaves carbon capture, if by some miracle they built a usable device (which seems unlikely given Heidelberg cement aren't even using the technology) the market has already allowed for every contract they may get to be ongoing, but they are not. The contracts would be to pay a once off licence fee to build the technology, so any profit is short lived and will not impact enterprise value in the long term.


The stats as it stands

Underlying turnover growth ($19 million) year on year -20%

Profit growth -25%

Share price +400% (or 34 times turnover)


To put this crazy valuation in context, to be in the region of sanity (PE ration of <20) Calix would need to increase their gross margin by 20% to make a nett profit of around 5%, at the same time as increasing turnover by 3300%. History is always a good place to start wen judging future performance. In 2019 Calix bought Inland environmental which helped increase turnover by $15 million (2021 financial year), but it cost $9 million to buy the business. If they follow the same model they will need to raise around $297 million for acquisitions to increase their turnover to make the business with the current valuation. But the problem is their underlying gross profit isn't high enough, so they will need to buy profitable companies and keep the profit rather than degrading it as they did in the USA.

 

[Dona Ferentes]

write your reply

Here it is:

Carbon Direct invests €15M ($A24.5M) for 7% stake in Calix’s LEILAC business

Calix will use funds to accelerate deployment of lime and cement decarbonisation technology
Highlights:
• €15M investment in Calix’s LEILAC business by Carbon Direct, one of the world’s leading decarbonisation investors
• Investment will accelerate the development and deployment of LEILAC, which uses Calix technology for cement and lime decarbonisation
• Carbon Direct will advise LEILAC on areas including capital markets, regulations, commercial development, and technical development, helping it scale the business
• LEILAC technology has been successfully piloted at 25,000tpa scale and is now being scaled up to 100,000tpa, with several commercial pilot plants under development
• Investment implements Calix’s equity farm-in strategy to create focussed, commercialisation businesses for its core technology

 

[Country Lad]

Nice downramp.

...and may they continue. First couple of downramps by a new member's first and only posts saw the price jump through $4. After the last downramp by another new member's first post we see the price currently up 20% today.

 

[Dona Ferentes]

...and may they continue. First couple of downramps by a new member's first and only posts saw the price jump through $4. After the last downramp by another new member's first post we see the price currently up 20% today.

Yes, it must be hard being the work experience guy in whichever short selling, fake news outfit. Not very professional.

 

[Dona Ferentes]

Someone is keen.... now pushed through $5 with little retrace. ... Mainly algo trading, nibbles both sides, upward and onward.

Then someone put up 50,000 block and a bit of hesitation, then it went in just one bite.

Now 5.28. +35%. I like it.

 

[So_Cynical]

Closed at $5.35 up almost 40% in a day...greater fool hey.

 

[Dona Ferentes]

there's a (hastily arranged) webinar at 10am today, with a Q&A to follow. This will help inform the pathway, I suspect.

 

[Dona Ferentes]

Closed at $5.35 up almost 40% in a day...greater fool hey.

making hey while we shun signs

Closed at 5.39, after spending most of the day at or above that point. More detail in the morning call and slides:

Calix to earn licensing income regardless of equity

•As part of the transaction, Calix Limited will earn 30% of all royalties / license revenues earned by the LEILAC Group, in addition to its 93% ownership
•Any income to the LEILAC Group for engineering services or project equity return above standard arms length terms will count as royalty income
•The license will continue while any current or future Calix Limited Patent in the Field of cement and lime production (from calcium carbonate) remains in force. Given current patents granted and pending on the core and new developments of the technology, Calix expects that the term of the licence will exceed 20 years
•Any new / developed IP from the LEILAC Group related to the licensed Calix Group IP will remain the property of Calix Limited, to be freely exploited outside the Field or for further R&D, as well as licensed back to the LEILAC Group within the Field.

The deal represents a critical milestone in Calix’s stated strategy of seeking equity “farm-ins”, after initial development undertaken by Calix, to accelerate and deploy its underlying platform technology into each line of business, with Calix remaining head licensor.

• As each of these businesses become independent commercial entities, they will remain ”joined at the hip” technically with Calix, which will continue to support development of the core intellectual property.
• Over time, growing royalty income from these companies will also support the development of new applications of the IP and associated technologies.

 

[So_Cynical]

The LEILAC final output report has been released and the reception seems to be positive, report highlights read as positive with operational CO2 capture coming in at a range of 14 to 24 Euro per Tonne, current price for a Euro offset is around 65 Euro.

One major surprise for me is that it looks like the world is going to need to store a lot of CO2, a major new global industry storing CO2.

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02432506-2A1329406?access_token=83ff96335c2d45a094df02a206a39ff4