China Jushi FY2013: Markets, customers and suppliers

The FY2013 consolidated statement reports CNY 5,209,641,310.30 of operating revenue, up 2.09%. The main-business product table separately reports glass fiber and related products at CNY 4,837,600,383.82 of revenue and CNY 3,294,228,513.90 of cost, giving the reported 31.90% gross margin. Fiber-product revenue fell 1.56%, cost rose 0.08%, and gross margin fell 1.11 percentage points. Management attributes the deterioration mainly to lower selling prices. Consolidated revenue growth therefore does not describe growth in fiber-product revenue or improvement in its margin. Fiber products represented 94.14% of main-business revenue; this percentage has a different denominator from consolidated revenue. The passage supplies neither grade-level margins nor a price-volume bridge.

Reported operating revenue / 2013 / consolidated

RMB 5,209,641,310.3

Reported revenue change / 2013 / consolidated

2.09%

Reported operating revenue / 2013 / glass fiber products

RMB 4,837,600,383.82

Reported operating cost / 2013 / glass fiber products

RMB 3,294,228,513.9

Reported gross margin / 2013 / glass fiber products

31.9%

Reported revenue change / 2013 / glass fiber products

-1.56%

Reported cost change / 2013 / glass fiber products

0.08%

The financial revenue note resolves the scope difference in the management tables. Main-business revenue of CNY 5,138,755,280.58 and other-business revenue of CNY 70,886,029.72 add to consolidated operating revenue of CNY 5,209,641,310.30. Main-business cost was CNY 3,554,556,427.48 and other-business cost CNY 20,662,055.46. The other-business category is separate from the CNY 301,154,896.76 of other products within main-business revenue, described as other trading in management discussion. The note does not identify the activities behind other-business revenue. Within main business, domestic revenue was CNY 2,773,251,550.48 and foreign revenue CNY 2,365,503,730.10; the accompanying costs were CNY 1,883,560,219.35 and CNY 1,670,996,208.13. Trading growth and regional change therefore require the main-business denominator, rather than the larger consolidated total. The earlier management table reports trading growth of 231.29%, domestic growth of 23.45% and foreign decline of 14.25%. Those measures describe sales categories and reported revenue regions; they do not identify end-use demand, factory output or foreign-currency collections.

Reported operating revenue / 2013 / main business

RMB 5,138,755,280.58

Reported operating revenue / 2013 / other business

RMB 70,886,029.72

Reported operating cost / 2013 / main business

RMB 3,554,556,427.48

Reported operating cost / 2013 / other business

RMB 20,662,055.46

Reported operating cost / 2013 / main business domestic

RMB 1,883,560,219.35

Reported operating cost / 2013 / main business foreign

RMB 1,670,996,208.13

The company identifies electricity, natural gas, minerals and chemical aids as important production inputs and says price or availability changes affect production and cost. Because furnace production is continuous, it describes gas stations and storage tanks, vehicle-mounted backup gas sources and emergency gas delivery within 2 to 12 hours as safeguards against shortages. These are reported arrangements, not measured proof that supply interruptions never occurred or that backup capacity can run every furnace indefinitely. The cost table records CNY 879,503,746.80 of glass-fiber-and-products material cost and a 24.60% share of total cost. The denominator is the table's total cost, not the cost of glass-fiber products alone. The separate other-product material row is not added into glass-fiber materials. The top five suppliers accounted for CNY 1,007,374,527.17 of purchases, or 21.15% of total purchases. Purchase concentration is distinct from cost recognized in the period; the aggregate does not identify five supplier contracts or imply payment timing.

Reported material cost / 2013 / glass fiber products

RMB 879,503,746.8

Reported material cost share / 2013 / glass fiber material row total cost denominator

24.6 percent

Reported supplier purchases / 2013 / top five suppliers

RMB 1,007,374,527.17

Reported supplier purchase share / 2013 / top five suppliers

21.15 percent

The five largest disclosed customers accounted for CNY 557,250,907.86, or 10.69% of consolidated operating revenue. The annual sales amounts were CNY 177,778,178.07 to Zhenshi Holding Group; CNY 111,524,262.84 to FUTURE PIPE INDUSTRIES LLC, K.S.A.; CNY 107,781,666.26 to CNBM Group Import and Export; CNY 92,252,368.97 to HELM AG; and CNY 67,914,431.72 to Shandong Chengxiang Electrical. Chinese customer names are rendered descriptively in English, without asserting an independently verified registered English name. The related-party notes identify Zhenshi as a shareholder and the CNBM import-export company as sharing a controlling parent with a shareholder. The related-party sales lines reconcile to the two annual customer amounts, including smaller materials or gas lines alongside inventory sales. Annual sales are distinct from year-end customer receivables: the receivables list uses FUTURE PIPE INDUSTRIES LLC without the K.S.A. suffix, so these labels are not treated as proof of an identical legal counterparty. The report supplies neither contract duration nor a customer-level product or end-use breakdown; these disclosed relationships do not establish exclusivity or a firm order book.

Reported customer sales / 2013 / zhenshi holding group

RMB 177,778,178.07

Reported customer sales / 2013 / future pipe industries llc ksa

RMB 111,524,262.84

Reported customer sales / 2013 / cnbm group import export

RMB 107,781,666.26

Reported customer sales / 2013 / helm ag

RMB 92,252,368.97

Reported customer sales / 2013 / shandong chengxiang electrical

RMB 67,914,431.72

Reported customer sales / 2013 / top five customers

RMB 557,250,907.86

The year-end marketing overview reports overseas subsidiaries in 14 countries and territories and two exclusive distributors in the United Kingdom and Germany. The company also describes customer relationships in more than 90 countries and territories. These statements describe sales reach, not 14 manufacturing countries or a list of named end users. The report discusses earlier trade-remedy effects in Turkey, India and the European Union and says the 2013 European investigations were still unresolved at the time of disclosure. Management expected Egyptian production, once fully running, to supply customers in affected markets and reduce the adverse effect. That expectation is distinct from Egypt's disclosed ignition and trial-production stages and is not evidence that trade restrictions had ended or all projected customer demand had been delivered. This is the issuer's historical risk account, not a statement of current trade law or current market access.

The related-party note identifies several suppliers under the second-largest shareholder's control and describes transport, equipment and raw-material transactions. Zhejiang Yushi Logistics charged CNY 83,291,311.50 for product freight, reported as 55.37% of that transaction category, and CNY 10,608,251.83 for materials freight, or 8.07% of its category. These percentages are not shares of all company purchases. The same supplier has a separate equipment-freight row, which is not merged into product freight. The report also records CNY 29,066,931.98 of equipment purchases from Tongxiang Huarui Automation Equipment, CNY 20,113,847.58 of raw-material purchases from Zhejiang Songyang Mingshi Mining and CNY 25,855,947.75 of freight services from Shanghai Tianshi International Freight Agency. Names are descriptive English renderings of the Chinese source, without claiming independently verified registered English names. The disclosed market-price and board-decision basis is the issuer's procedure statement, rather than independent evidence that every transaction was competitively priced. These annual flows explain supply-chain relationships; they are not outstanding balances, supplier contracts or proof of uninterrupted delivery.

Reported related purchase / 2013 / zhejiang yushi product freight

RMB 83,291,311.5

Reported related purchase share / 2013 / zhejiang yushi product freight category

55.37 percent

Reported related purchase / 2013 / zhejiang yushi material freight

RMB 10,608,251.83

Reported related purchase share / 2013 / zhejiang yushi material freight category

8.07 percent

Reported related purchase / 2013 / tongxiang huarui equipment

RMB 29,066,931.98

Reported related purchase / 2013 / songyang mingshi raw materials

RMB 20,113,847.58

Reported related purchase / 2013 / shanghai tianshi freight

RMB 25,855,947.75

The related-party sales tables identify finished-inventory sales of CNY 34,222,449.52 to CNBM International Trade and CNY 31,221,158.50 to Lianyungang Zhongfu Lianzhong Composite Materials. The relationship table describes the latter as under the largest shareholder's control and the former as sharing a controlling party with a shareholder. Zhenshi-group Hengshi Fiber received CNY 7,848,686.56 of inventory goods and CNY 3,938,204.16 of raw materials as two separate categories. The source does not give a customer-specific final application or a contract duration for these amounts. The previously explained top-customer totals for Zhenshi Holding and CNBM Group Import and Export each reconcile to the detailed inventory, materials and, for Zhenshi, gas lines; the totals are reused rather than counted as additional sales. Smaller equipment, scrap, materials and technical-service dealings in the note are different transaction categories, not all fiber-product demand. Annual sales and the separate closing receivables therefore describe different parts of these operating relationships.

Reported related sales / 2013 / cnbm international trade inventory

RMB 34,222,449.52

Reported related sales / 2013 / lianyungang zhongfu lianzhong inventory

RMB 31,221,158.5

Reported related sales / 2013 / zhenshi hengshi inventory

RMB 7,848,686.56

Reported related sales / 2013 / zhenshi hengshi raw materials

RMB 3,938,204.16