China Jushi FY2017: Markets, customers and suppliers

Glass fiber and related products generated CNY 8,427,139,862.74 of revenue and CNY 4,496,848,297.70 of cost in FY2017. The disclosed gross margin was 46.64%, up 2.14 percentage points; product revenue grew 15.38% and cost grew 10.93%. This product category accounted for 97.41% of the listed group's CNY 8,651,549,179.12 total operating revenue. Management connects growth to higher yarn sales and stronger wind-power and thermoplastic demand, with shortages in some products, regions and seasons. It does not provide separate margins for E7, E8, roving or electronic yarn in this table. The small other-product row is CNY 67,793,943.25 of revenue, not the entire difference between the main glass-fiber category and group revenue: the product table is a main-business presentation and should not be forced into a complete consolidated revenue reconciliation. The production/sales subsection says volumes grew but gives no tonnage; revenue growth therefore cannot establish realised tonnes, utilisation or average selling prices.

Revenue / 2017 / main business glass fiber products

RMB 8,427,139,862.74

Cost of sales / 2017 / main business glass fiber products

RMB 4,496,848,297.7

Gross margin / 2017 / main business glass fiber products

46.64 percent

Revenue / 2017 / consolidated total operating revenue

RMB 8,651,549,179.12

The main-business regional presentation reports domestic revenue of CNY 4,706,515,038.88, cost of CNY 2,670,334,994.78 and gross margin of 43.26%. Overseas revenue was CNY 3,884,408,057.10, cost CNY 1,988,056,762.65 and margin 48.82%. Domestic revenue grew 23.25% while overseas revenue grew 9.32%; domestic margin rose 4.31 percentage points and overseas margin fell 1.51 points. Management says domestic demand was strong and gives domestic sales a 54.78% share of main-business sales. These geographic sales rows do not measure the output or profitability of the Egyptian factory or any particular Chinese base. Domestic business relied principally on direct sales, with a smaller agency channel; overseas business combined trading subsidiaries, distributors and direct sales. No separate revenue or margin is disclosed here for each channel or country, and the regional table is not assumed to be an identical perimeter to the main-product or consolidated revenue totals.

Revenue / 2017 / main business domestic

RMB 4,706,515,038.88

Cost of sales / 2017 / main business domestic

RMB 2,670,334,994.78

Gross margin / 2017 / main business domestic

43.26 percent

Revenue / 2017 / main business overseas

RMB 3,884,408,057.1

Cost of sales / 2017 / main business overseas

RMB 1,988,056,762.65

Gross margin / 2017 / main business overseas

48.82 percent

The financial segment note reports all businesses in a single management segment, while providing product and geographic detail for external main-business revenue. It records glass-fiber product revenue of CNY 8,427,139,862.74 and cost of CNY 4,497,042,951.18, plus other-product revenue of CNY 163,783,233.24. Total main-business revenue was CNY 8,590,923,095.98, which excludes other-business revenue of CNY 60,626,083.14 and is below consolidated operating revenue of CNY 8,651,549,179.12. The glass-fiber cost differs by CNY 194,653.48 from the management table’s CNY 4,496,848,297.70; both source presentations are retained without inventing a reallocation. The note’s domestic and foreign external main-business revenues were CNY 4,706,515,038.88 and CNY 3,884,408,057.10. These geographic categories are not individual-country sales or proof that every overseas customer was supplied from an overseas furnace. They should be compared using the note’s complete main-business scope rather than silently substituting values from another table. The statement that customers were dispersed is management’s account and does not replace the disclosed customer concentration or related-business evidence.

Glass fiber product cost / 2017 / financial segment note

RMB 4,497,042,951.18

Main business revenue / 2017 / external financial segment note

RMB 8,590,923,095.98

Regional main-business revenue / 2017 / domestic financial segment note

RMB 4,706,515,038.88

Regional main-business revenue / 2017 / foreign financial segment note

RMB 3,884,408,057.1

The five largest customers accounted for CNY 1,166,851,200 of sales, or 13.49% of annual sales. Related-party sales within that five-customer subset were CNY 599,367,900, or 6.93% of annual sales. The five largest suppliers represented CNY 1,716,876,700 of purchases, or 9.66% of annual purchases; related-party purchases within that subset were CNY 386,567,200, or 2.18%. These related-party amounts concern the named concentration subsets, not all related transactions or all procurement. The table does not identify the five counterparties, so the separate wind-blade investment cannot be assigned to them. Material cost for glass fiber and products was CNY 1,439,053,744.38, up 23.14%. The reported 30.71% cost share uses total consolidated operating cost as its denominator, rather than the smaller glass-fiber product cost row. It is not a mineral-only cost share, unit input price or measure of the savings from the new powder plant. Procurement across Tongxiang, Chengdu, Jiujiang and Egypt used common negotiation with separate contracts, annual tenders and long-term contracts during rising input markets; these controls do not establish fixed prices or a quantified saving.

Top-customer sales / 2017 / top five customers

RMB 1,166,851,200

Top-customer sales share / 2017 / top five customers

13.49 percent

Top-customer sales / 2017 / related parties within top five customers

RMB 599,367,900

Top-customer sales share / 2017 / related parties within top five customers

6.93 percent

Top-supplier purchases / 2017 / top five suppliers

RMB 1,716,876,700

Top-supplier purchase share / 2017 / top five suppliers

9.66 percent

Top-supplier purchases / 2017 / related parties within top five suppliers

RMB 386,567,200

Top-supplier purchase share / 2017 / related parties within top five suppliers

2.18 percent

Reported material cost / 2017 / glass fiber products

RMB 1,439,053,744.38

Reported material share of cost / 2017 / consolidated total cost denominator

30.71 percent

The related-party note records CNY 272,036,246.21 of transport services purchased from Zhenshi Group Zhejiang Yushi International Logistics, alongside other logistics providers and equipment and mineral-powder suppliers. Sales of goods to Zhejiang Hengshi, the related fiber-materials company named in the filing, were CNY 495,152,377.28; raw materials, utilities and other transactions with that company were listed separately. These figures describe particular related-party transaction categories, not the aggregate of all related purchases or sales and not the same perimeter as the top-five customer and supplier tables. Sales to the Zhongfu Lianzhong wind-blade investee and other disclosed related businesses connect the glass-fiber operation to downstream materials users, without establishing exclusive sourcing or a complete customer dependency. Closing related trade receivables totaled CNY 27,622,984.23 gross with CNY 278,395.82 of allowances, while related trade payables totaled CNY 32,094,170.92. Year-end balances are not annual transaction volumes. The listed company’s parent-only receivables also include substantial balances with consolidated subsidiaries, so those balances must not be added to group external credit exposure. These relationships are taken from the report; partner businesses are not independently researched or recursively expanded.

Related transport purchase / 2017 / zhejiang yushi

RMB 272,036,246.21

Related goods sales / 2017 / zhejiang hengshi

RMB 495,152,377.28

Related trade receivables / 2017 / consolidated gross

RMB 27,622,984.23

Related receivable allowance / 2017 / consolidated

RMB 278,395.82

Related-party trade payables / 2017 / consolidated

RMB 32,094,170.92