Mason Bourne

Mason Bourne inquired whether REX American Resources expects to generate 45Z tax credits before the indirect land use change occurs on January 1st, and if these credits could be recognized retroactively. He also asked about the company's strategy for potential partnerships for excess carbon capture capacity, similar to ADM's recent agreement with Google.

Answer

Executive Chairman Stuart Rose stated that while the company hopes to achieve 45Z credits this year and recognize them retroactively, it depends on forthcoming regulations and carbon intensity score qualifications. CEO Zafar Rizvi clarified that recent calculations suggest they could qualify without land use change, but many factors, including prevailing wages and the definition of qualifying ethanol, require Treasury guidelines. Regarding carbon capture partnerships, Zafar Rizvi explained that the company is focusing on securing the Class VI permit and pipeline for their first well before negotiating commitments, despite having sufficient capacity for third-party sequestration and receiving interest from several parties.

Mason Bourne of AWH Capital asked for clarification on the discrepancy between ICE's total reported detainee population and the sum of facility-level data. He also sought confirmation that CoreCivic is now operating above its contractual minimums, allowing for incremental revenue per detainee.

Answer

CEO Damon Hininger and President & COO Patrick Swindle could not explain the discrepancy in ICE's public data but offered to discuss their internal tracking offline. Hininger confirmed that, unlike during the pandemic, the company is now largely above its fixed monthly guarantees, meaning nearly every incremental detainee contributes to additional revenue.

Mason Bourne from Zacks Investment Research inquired about the role of new hire Noah Kauffman, the key drivers for the strong 2025 loan volume growth forecast, and the company's future capital allocation priorities between dividends and share buybacks.

Answer

Noah Kauffman introduced himself, stating his focus will be on U.S. capital markets and strategic finance. President Kan Li attributed the projected 30% loan volume growth to enhanced direct customer acquisition and new platform partnerships, expecting profitability to grow in line with volume. CFO Fuya Zheng added that improved risk management and lower funding costs drove 2024 profitability. Zheng also explained that due to the stock's recent appreciation, the capital return strategy will now place more emphasis on share buybacks over dividends, as the stock is still considered undervalued.

Mason Bourne of AWH Capital followed up on capital return, highlighting the stock's low valuation and suggesting the dividend payout could be significantly higher, similar to peers, to help the share price re-rate.

Answer

CFO Fuya Zheng acknowledged the desire for more buybacks but cited low trading volume as a challenge. He committed to maintaining an attractive dividend yield of around 6%, adjusting it as the stock price changes. Mr. Zheng expressed confidence that the company's focus on operations would eventually address the valuation gap, noting the stock's appreciation over the past two years.