China Jushi FY2015: Business overview

Glass fiber and related products generated RMB 6.911129231 billion, or 97.96% of total revenue in 2015. Bulk materials for the Tongxiang, Chengdu, Jiujiang and Egypt bases were bought through central negotiation with separate subsidiary contracts. Production was primarily guided by sales, using a flexible mix of pull and push methods. Domestic sales mainly used direct sales, while foreign sales combined overseas trading subsidiaries, distributors and direct sales. This explains the operating system behind the revenue figures.

The filing states that the company and stock short name changed from China Fiberglass to China Jushi from 18 March 2015. It also describes faster centralisation of sales, finance and purchasing and exploration of common scheduling, technology and management. The effective stock-name date is kept distinct from the legal-registration date reported in the prior filing. Both names belong to the same listed code, while subsidiary and factory identities remain separately recorded.

The 2015 report describes a concentrated glass-fiber industry with substantial technology, capital and policy barriers to entry. It says the six largest global producers controlled approximately 75% of capacity, without naming all six or supplying an independently checked market-share series. Citing the China Fiberglass Industry Association, it reports Chinese glass-fiber yarn output of 3.23 million tonnes in 2015 and a 94.27% share of national yarn output produced through tank-furnace drawing. The report separately puts China above half of global glass-fiber capacity and gives preceding three-year capacity growth rates of 6.65% in China and 1.70% worldwide. Output, capacity, production method and growth rates measure different things. These historical industry figures are not Jushi output, company market share, factory utilization or present-day industry estimates. Management viewed large furnaces, pure-oxygen combustion, automated material handling and improved glass formulations as ways to improve efficiency and product performance. Its expectation that stronger producers would benefit from consolidation is an outlook, rather than a completed acquisition or guaranteed pricing advantage.

Revenue was RMB 7.0547873 billion. Management attributed growth to higher volumes and selling prices. Foreign sales were 48.51% of main-business sales, and the top five customers generated RMB 853.2160 million, or 12.24% of annual sales. These disclosures provide the commercial context for the portfolio and capacity work. The report does not assign the whole revenue increase to E7 or imply that each overseas sales subsidiary owned a manufacturing plant.