China Jushi FY2021: Markets, customers and suppliers

Glass-fiber and related-product revenue was CNY 17,844,653,072.20, up 61.55%, with cost of revenue of CNY 8,945,191,162.08, up 24.86%. Reported gross margin was 49.87%, up 14.73 percentage points. This is gross profitability for a product category, before group expenses, financing and tax. Management attributes improvement to product mix, growing sales and higher prices, including electronic-fabric demand linked to printed circuit boards and lightweighting applications. It also describes pandemic-related overseas supply-demand imbalances and export recovery from the second quarter; these are historical explanations, not a forecast that the same prices persist. Other main-business revenue of CNY 944,630,623.34 had a 1.10% margin. Together these categories total CNY 18,789,283,695.54 main-business revenue, distinct from CNY 19,706,882,079.97 consolidated total revenue. Fiber’s reported 94.97% share uses main-business revenue; its 90.55% share uses total revenue. Neither denominator is silently substituted, and higher gross margin is not presented as an equivalent increase in sustainable shareholder profit.

Reported glass-fiber and related-product revenue / 2021 / annual glass fiber product revenue

RMB 17,844,653,072.2

Reported glass-fiber and related-product cost / 2021 / annual glass fiber product cost

RMB 8,945,191,162.08

Reported glass-fiber and related-product gross margin / 2021 / annual glass fiber product margin

49.87 percent

Reported other main-business revenue / 2021 / annual other main business revenue

RMB 944,630,623.34

Glass-fiber materials cost was CNY 3,050,708,784.94, up 26.79% from CNY 2,406,124,579.58. The reported 28.31% share matches total consolidated cost of revenue of CNY 10,777,245,169.64; it is not a share of the separate CNY 8,945,191,162.08 fiber-category cost. The latter denominator would give about 34.10%, an explanatory calculation rather than a replacement source figure. The table does not break every other cost component out or divide the increase between input prices, volumes and mix. No per-tonne saving is inferred. Electricity, natural gas, minerals and chemical auxiliaries are material inputs; their prices and availability can constrain manufacturing. Management describes cleaner production, energy management and technical innovation, without quantifying a saving for each initiative.

Reported glass-fiber materials cost / 2021 / glass fiber material cost

RMB 3,050,708,784.94

Reported materials share of total cost / 2021 / materials share of total cost matches consolidated denominator

28.31 percent

Domestic main-business sales were CNY 12,617,090,386.04 with a 50.06% gross margin; foreign main-business sales were CNY 6,172,193,309.50 with a 42.02% margin. Domestic sales represented 67.15% of main-business sales. Direct sales were CNY 16,206,541,755.81 with a 47.05% margin, while distributor sales were CNY 2,582,741,939.73 with a 49.72% margin; direct sales represented 86.25%, up 3.08 percentage points. These are alternative classifications of the same CNY 18,789,283,695.54 main-business revenue, not four independent revenue streams. Region does not identify the factory that produced the goods, and direct sales do not name final end users or imply better margins than distributors. Management describes linking domestic and foreign production and sales to recovering overseas markets, alongside its Tongxiang, Jiujiang, Chengdu, South Carolina and Suez manufacturing footprint. That footprint does not itself measure export volume or eliminate origin-specific trade exposure.

Reported domestic main-business revenue / 2021 / annual main business domestic revenue

RMB 12,617,090,386.04

Reported foreign main-business revenue / 2021 / annual main business foreign revenue

RMB 6,172,193,309.5

Reported domestic main-business gross margin / 2021 / annual main business domestic margin

50.06 percent

Reported foreign main-business gross margin / 2021 / annual main business foreign margin

42.02 percent

Reported direct main-business sales / 2021 / annual main business direct sales

RMB 16,206,541,755.81

Reported distributor main-business sales / 2021 / annual main business distributor sales

RMB 2,582,741,939.73

Reported direct-sales gross margin / 2021 / annual main business direct margin

47.05 percent

Reported distributor-sales gross margin / 2021 / annual main business distributor margin

49.72 percent

The five largest customers accounted for CNY 3,663,034,600 sales, or 18.59% of annual sales. Related-party sales within this group were CNY 1,748,114,800, or 8.87% of annual sales. The related amount is a subset, not extra revenue or every related sale. The five largest suppliers accounted for CNY 3,839,051,900 purchases, or 28.05% of annual purchases; related-party purchases within that group were CNY 649,792,600, or 4.75%. Sales and procurement have different denominators. These are annual flows, not cash settled or year-end balances. The concentration subsection does not identify all five names. Related-transaction notes cannot be used to invent their ranking, final customers or project orders. The exceptional-dependence subsections are marked not applicable; this does not establish that ordinary concentration or credit risk is absent.

Reported top-five customer annual sales / 2021 / annual top five customer sales

RMB 3,663,034,600

Reported related-party annual sales within top-five customers / 2021 / annual related party sales subset within top five

RMB 1,748,114,800

Reported top-five customer share of annual sales / 2021 / annual top five customer sales share

18.59 percent

Reported related-party subset share of annual sales / 2021 / annual related party subset within top five sales share

8.87 percent

Reported top-five supplier annual purchases / 2021 / annual top five supplier purchases

RMB 3,839,051,900

Reported related-party purchases within top-five suppliers / 2021 / annual related party purchases subset within top five

RMB 649,792,600

Reported top-five supplier share of annual purchases / 2021 / annual top five supplier purchases share

28.05 percent

Reported related-party subset share of annual purchases / 2021 / annual related party subset within top five purchase share

4.75 percent

The FY2021 related-purchase table identifies CNY 649,792,621.02 of transport services from Zhenshi Group Zhejiang Yushi International Logistics, CNY 146,426,353.25 from Shanghai Tianshi International Freight Forwarding and CNY 93,329,580.37 from QUARTZ LOGISTICS INC. It separately reports CNY 113,035,692.62 of equipment procurement from Tongxiang Huarui Automatic Control Technology Equipment, plus CNY 1,344,654.55 of technical services and repairs from Huarui. These four counterparties are classified in the issuer’s related-party table as subsidiaries of shareholders. The large logistics and equipment flows explain participation by related companies in delivery and investment, but are not all cash payments, a named-project construction cost or evidence of unfavorable prices. A separate CNY 48,042,464.04 row concerns buying a warehouse from Hengshi USA Wind Power Materials Corporation; warehouse acquisition is not automatically annual transport expense, a new glass-fiber furnace or a verified physical location inferred from the seller’s name. Another row reports CNY 3,155,660.42 of engineering services from China New Building Materials Design & Research Institute. Selected material rows do not represent the sum of every related purchase. Counterparty identities and transaction direction are based only on Jushi’s own disclosure, without extending research into partners.

Reported related-party purchase or service transaction / 2021 / FY2021 issuer subsidiary/associate/related note disclosure. Original organization, unit, period and transaction category retained; balance, annual activity and cash remain separate.

RMB 649,792,621.02

Reported related-party purchase or service transaction / 2021 / FY2021 issuer subsidiary/associate/related note disclosure. Original organization, unit, period and transaction category retained; balance, annual activity and cash remain separate.

RMB 146,426,353.25

Reported related-party purchase or service transaction / 2021 / FY2021 issuer subsidiary/associate/related note disclosure. Original organization, unit, period and transaction category retained; balance, annual activity and cash remain separate.

RMB 93,329,580.37

Reported related-party purchase or service transaction / 2021 / FY2021 issuer subsidiary/associate/related note disclosure. Original organization, unit, period and transaction category retained; balance, annual activity and cash remain separate.

RMB 113,035,692.62

Reported related-party purchase or service transaction / 2021 / FY2021 issuer subsidiary/associate/related note disclosure. Original organization, unit, period and transaction category retained; balance, annual activity and cash remain separate.

RMB 1,344,654.55

Reported related-party purchase or service transaction / 2021 / FY2021 issuer subsidiary/associate/related note disclosure. Original organization, unit, period and transaction category retained; balance, annual activity and cash remain separate.

RMB 48,042,464.04

Jushi reports CNY 1,673,203,826.98 of inventory-product sales to Zhenshi Holding, a shareholder, and separately CNY 74,578,927.84 of raw-material sales to it. CNBM International Trade bought CNY 187,627,284.93 of inventory products, HENGSHI EGYPT FIBERGLASS FABRICS S.A.E CNY 151,486,787.04, TURKIZ COMPOSITE MATERIALS TECHNOLOGY UR CNY 87,999,475.24 and Lianyungang Zhongfu Lianzhong CNY 45,992,662.57. These four counterparties are listed as other related parties; that classification is not expanded into unreported common ownership. The large Zhenshi holding-company product relationship is not the same as sales to its separately named Huamei materials company or the Egyptian Huamei company. The latter Egyptian company bought CNY 61,246,855.06 of inventory products under its own disclosed name. The trading relationship with CNBM International Trade does not identify the final buyer or destination, and the note’s inventory category is not silently replaced by a specific glass-fiber grade. Reciprocal procurement, raw-material and water/electricity transactions retain separate directions and categories, so selected sales are not netted against purchases or added to consolidated revenue again. These are recorded transactions, not an additional confirmed order book, cash collection or an independently researched end-market customer list.

Reported related-party sales transaction / 2021 / FY2021 issuer subsidiary/associate/related note disclosure. Original organization, unit, period and transaction category retained; balance, annual activity and cash remain separate.

RMB 1,673,203,826.98

Reported related-party sales transaction / 2021 / FY2021 issuer subsidiary/associate/related note disclosure. Original organization, unit, period and transaction category retained; balance, annual activity and cash remain separate.

RMB 74,578,927.84

Reported related-party sales transaction / 2021 / FY2021 issuer subsidiary/associate/related note disclosure. Original organization, unit, period and transaction category retained; balance, annual activity and cash remain separate.

RMB 187,627,284.93

Reported related-party sales transaction / 2021 / FY2021 issuer subsidiary/associate/related note disclosure. Original organization, unit, period and transaction category retained; balance, annual activity and cash remain separate.

RMB 151,486,787.04

Reported related-party sales transaction / 2021 / FY2021 issuer subsidiary/associate/related note disclosure. Original organization, unit, period and transaction category retained; balance, annual activity and cash remain separate.

RMB 87,999,475.24

Reported related-party sales transaction / 2021 / FY2021 issuer subsidiary/associate/related note disclosure. Original organization, unit, period and transaction category retained; balance, annual activity and cash remain separate.

RMB 45,992,662.57