China Jushi FY2007: Subsidiaries and invested companies

The FY2007 management report describes a January increase of USD 41.05 million in Jushi Group's registered capital. China Fiberglass, CNBM Company and Zhencheng International subscribed, with a price of USD 2.67 for each dollar of registered capital; Jushi Group reportedly received USD 109.60 million including equivalent renminbi. A simultaneous transfer of another shareholder's interest to Zhencheng was separate from that capital subscription. After these transactions, the disclosed ownership was 51% for China Fiberglass, 11.5% for CNBM Company, 11% for Zhenshi, 8% for Surest Finance and 18.5% for Zhencheng. The related-party interest table gives the issuer's opening share as 59.90% and closing share as 51%, so retaining control did not mean retaining the same share of subsidiary earnings. The full-year capital table separately reports registered capital rising from USD 110.1516 million to USD 186.20810545 million, a larger movement than the January transaction alone. The subsidiary table presents USD 94.9661 million as the issuer's year-end actual investment, while the related-interest table presents USD 77.1161 million as its closing interest amount. The filing does not reconcile these two amounts; neither is substituted for the other or treated as annual cash contributed.

China Fiberglass held 51% of Jushi Group at the end of FY2007, with an equal voting share. Jushi Group in turn held 100% of Jushi Jiujiang and 57% of Jushi Chengdu. The Chengdu subsidiary's disclosed business covered glass fiber, composite materials, related equipment and raw materials, as well as import and export activities. These are different ownership layers: Jushi Group's percentage in a subsidiary is not the listed issuer's direct percentage in that subsidiary, and a registered business scope does not quantify actual output. Outside the glass-fiber chain, the issuer held 95% of Beixin Technology. Beixin's subsidiaries included household building-material trading and market operations and Jun'an Cement Products, which made cement-sand blocks, pipe sections and utility poles. Beixin purchased the other 50% of Jun'an in September 2007 for CNY 9 million, taking its holding from 50% to 100%. The Lvxing home-building-material market operation was being liquidated using 30 September as its reference date, with deregistration still in progress at the report date. These businesses help define the original group's scope; they should not be described as additional glass-fiber production lines.

The subsidiary note describes Jushi Hong Kong as a glass-fiber sales and specialist-equipment trading company, wholly owned by Jushi Group. Its registered capital was USD 360,000, but the footnote gives actual capital paid by year end as USD 192,000. Jushi Korea was 60% owned, with USD 500,000 registered capital and USD 300,000 of Jushi's actual contribution; its stated business was glass-fiber sales and trade in equipment and chemical raw materials. The 60%-owned South African Huaxia composites company had USD 4 million registered capital and USD 2.4 million actual Jushi contribution, with production and sales of glass fiber and related products in its business scope. This supports a distinction between sales channels, trading operations and a disclosed manufacturing scope, but the note provides no operating capacity or commissioning date for the South African company. Jushi Europe and the Jiaxing glass-fiber composites subsidiary were deregistered during FY2007 and excluded from consolidation. Their appearance in the historical subsidiary table does not mean they remained active consolidated businesses at year end.

Management's FY2007 subsidiary profile reports CNY 598.808 million net profit and CNY 7.790 billion total assets for the 51%-owned Jushi Group, whose stated main business was manufacturing and selling glass fiber and composite materials. For the 95%-owned Beixin Technology, it reports a CNY 20.509 million net loss and CNY 235.191 million total assets, with activities including new materials, general distribution and investments. These profiles show why the glass-fiber business and the smaller building-material businesses had different earnings roles during the year. The subsidiary net profit amounts are the reported profits of those businesses, not the listed issuer's attributable share or separate incremental profits to add to consolidated net profit. Likewise, their asset totals cannot simply be summed with or subtracted from group assets without considering consolidation and intercompany eliminations. The source profile does not break every subsidiary's profit into products or production sites.

Reported subsidiary net profit / 2007 / fy2007 subsidiary jushi group management net profit

RMB 598,807,800

Reported subsidiary assets / 2007 / fy2007 subsidiary jushi group management assets

RMB 7,789,617,400

Reported subsidiary net profit / 2007 / fy2007 subsidiary beixin technology management net profit

RMB -20,508,700

Reported subsidiary assets / 2007 / fy2007 subsidiary beixin technology management assets

RMB 235,191,300