China Jushi FY2017: Subsidiaries and invested companies

The major controlled-and-invested-company table identifies Jushi Group with a reported 100% holding and describes its business as glass-fiber production and sales. Registered capital was CNY 3,921,763,000.00, total assets CNY 19,417,965,200.00 and net assets CNY 10,237,199,300.00; these are organizational amounts, not plant-level investment or cash available to the issuer. FY2017 revenue was CNY 8,289,600,500.00, operating profit CNY 2,285,321,600.00 and net profit CNY 1,910,280,700.00. The original row uses ten-thousand CNY throughout; the amounts here are converted to CNY . Holding percentage alone does not establish the accounting method, shareholder-attributable earnings or a Jushi customer contract. These four company rows must not be summed as consolidated issuer revenue or profit.

Registered capital / 2017 / major investee operating table

RMB 3,921,763,000

Total assets / 2017 / major investee operating table

RMB 19,417,965,200

Net assets / 2017 / major investee operating table

RMB 10,237,199,300

Revenue / 2017 / major investee operating table

RMB 8,289,600,500

Operating profit / 2017 / major investee operating table

RMB 2,285,321,600

Net profit / 2017 / major investee operating table

RMB 1,910,280,700

Equity interest / 2017 / major investee operating table

100 percent

The major controlled-and-invested-company table identifies Beixin Technology Development with a reported 100% holding and describes its business as building-material sales. Registered capital was CNY 90,000,000.00, total assets CNY 86,257,700.00 and net assets CNY 76,192,600.00; these are organizational amounts, not plant-level investment or cash available to the issuer. FY2017 revenue was CNY 157,068,400.00, operating profit CNY -8,711,300.00 and net profit CNY 4,807,600.00. The original row uses ten-thousand CNY throughout; the amounts here are converted to CNY . Holding percentage alone does not establish the accounting method, shareholder-attributable earnings or a Jushi customer contract. These four company rows must not be summed as consolidated issuer revenue or profit. Its operating loss and positive net profit are distinct measures; the table does not provide a reconciliation of the difference.

Registered capital / 2017 / major investee operating table

RMB 90,000,000

Total assets / 2017 / major investee operating table

RMB 86,257,700

Net assets / 2017 / major investee operating table

RMB 76,192,600

Revenue / 2017 / major investee operating table

RMB 157,068,400

Operating profit / 2017 / major investee operating table

RMB -8,711,300

Net profit / 2017 / major investee operating table

RMB 4,807,600

Equity interest / 2017 / major investee operating table

100 percent

The major controlled-and-invested-company table identifies Zhongfu Lianzhong with a reported 32.04% holding and describes its business as wind-blade production and sales. Registered capital was CNY 261,307,500.00, total assets CNY 5,344,966,600.00 and net assets CNY 3,046,301,300.00; these are organizational amounts, not plant-level investment or cash available to the issuer. FY2017 revenue was CNY 2,004,021,300.00, operating profit CNY 297,345,200.00 and net profit CNY 265,093,700.00. The original row uses ten-thousand CNY throughout; the amounts here are converted to CNY . Holding percentage alone does not establish the accounting method, shareholder-attributable earnings or a Jushi customer contract. These four company rows must not be summed as consolidated issuer revenue or profit.

Registered capital / 2017 / major investee operating table

RMB 261,307,500

Total assets / 2017 / major investee operating table

RMB 5,344,966,600

Net assets / 2017 / major investee operating table

RMB 3,046,301,300

Revenue / 2017 / major investee operating table

RMB 2,004,021,300

Operating profit / 2017 / major investee operating table

RMB 297,345,200

Net profit / 2017 / major investee operating table

RMB 265,093,700

Equity interest / 2017 / major investee operating table

32.04 percent

The major controlled-and-invested-company table identifies Guangrongda Financial Leasing with a reported 20.10% holding and describes its business as leasing. Registered capital was CNY 500,000,000.00, total assets CNY 1,338,252,300.00 and net assets CNY 506,993,100.00; these are organizational amounts, not plant-level investment or cash available to the issuer. FY2017 revenue was CNY 79,734,400.00, operating profit CNY 5,591,000.00 and net profit CNY 4,072,200.00. The original row uses ten-thousand CNY throughout; the amounts here are converted to CNY . Holding percentage alone does not establish the accounting method, shareholder-attributable earnings or a Jushi customer contract. These four company rows must not be summed as consolidated issuer revenue or profit.

Registered capital / 2017 / major investee operating table

RMB 500,000,000

Total assets / 2017 / major investee operating table

RMB 1,338,252,300

Net assets / 2017 / major investee operating table

RMB 506,993,100

Revenue / 2017 / major investee operating table

RMB 79,734,400

Operating profit / 2017 / major investee operating table

RMB 5,591,000

Net profit / 2017 / major investee operating table

RMB 4,072,200

Equity interest / 2017 / major investee operating table

20.1 percent

The subsidiary list distinguishes Jushi USA in South Carolina, a manufacturing and sales company with a 70% direct interest, from the wholly owned California glass-fiber sales company. An overseas sales presence is not proof of another operating furnace. Jushi Egypt was wholly owned and located in Suez; the foreign-operation note identifies the US dollar as its functional currency. The report also describes a special perimeter for Hubei Hongjia Kaolin Mining: Jushi Group retained a 60% interest but contracted operations to a minority shareholder for three years from 11 September 2017. Under the disclosed arrangement, the operator controlled activities and bore the related profits and losses, while Jushi Group received a fixed annual contract fee of CNY 500,000. The issuer included Hongjia’s ending balance sheet in the consolidated balance sheet but excluded its profit and cash-flow statements from the contracting date. This unusual source statement is preserved rather than replaced with a blanket assumption based on the ownership percentage. Other changes included absorption of Zhejiang Beite Refractory into Jushi Group and deregistration of several sales or holding entities. Their removal as legal entities does not by itself prove that a physical production line closed.

Annual operating contract fee / 2017 / hongjia contract

RMB 500,000

The Zhongfu Lianzhong wind-blade associate was accounted for using the equity method. Its investment carrying value moved from CNY 826,325,539.52 to CNY 1,026,417,076.77 through CNY 157,166,718.43 of additional investment, CNY 78,179,444.13 of equity-accounted earnings, CNY 50,904,457 of dividends and CNY 15,649,831.69 in the other-movement column. The latter amount is also identified as acquisition-related income; it is not new wind-blade customer demand. Management’s investment discussion describes buying a 5.52% Zhongfu stake held by WISE-WIN TECHNOLOGY LIMITED for CNY 157,175,200. The financial note prints CNY 157,166,718.43, CNY 8,481.57 less, and phrases the purchase using WISE-WIN’s name. The source difference is retained without inventing a transaction structure or attributing it to rounding. The associate note says the purchase was completed in February 2017, while the acquisition-income note uses identifiable net assets dated 31 March 2017. Completion and valuation dates are kept separately. The closing investment also reconciles to a printed CNY 976,034,941.06 net-asset share plus CNY 50,382,135.71 of adjustments. However, that printed share is not the simple product of the closing 32.04% interest and the reported CNY 2,995,356,694.61 of parent-shareholder equity. The reason is not disclosed. The investee’s entire revenue and profit, Jushi’s equity-accounted earnings, cash dividends and acquisition gain are distinct measures.

Associate investment value / 2017 / zhongfu closing

RMB 1,026,417,076.77

Associate investment addition / 2017 / zhongfu financial note

RMB 157,166,718.43

Associate equity-accounted income / 2017 / zhongfu

RMB 78,179,444.13

Associate dividends / 2017 / zhongfu received

RMB 50,904,457

Associate net-asset share / 2017 / printed zhongfu share

RMB 976,034,941.06

Associate investment adjustment / 2017 / printed zhongfu adjustment

RMB 50,382,135.71

The consolidated associate-investment movement table closes at CNY 1,184,429,726.34 before a CNY 493,103.30 impairment allowance. Deducting that allowance yields CNY 1,183,936,623.04, the value also shown for associates in the parent-company note. The equality of these two resulting values does not make all consolidated and parent-company accounts interchangeable. The minor-associate summary reports CNY 157,519,546.27 of investment carrying value. In the same original table, a row headed as the aggregate calculated by ownership proportion prints CNY 103,298.66, while the separately labelled net-profit and comprehensive-income rows each print CNY 2,047,262.82. The table supplies no explanation of the difference, so the header-row amount is not relabelled as net profit. Minor investee rows are compressed rather than expanded into unrelated company research. Separately, the parent’s investment in controlled companies rose by CNY 368,984,000, shown against Jushi USA. That parent equity investment is not the same measure as the consolidated US construction additions or proof of a completed production line.

Associate investment value / 2017 / consolidated gross

RMB 1,184,429,726.34

Associate investment allowance / 2017 / consolidated

RMB 493,103.3

Parent US equity investment addition / 2017 / jushi usa

RMB 368,984,000