China Jushi FY2023: Operating risks and business commitments

Jushi identifies electricity, natural gas, minerals and chemical auxiliaries as substantial production inputs whose supply and prices affect output and cost. It also reports exposure to interest-rate changes because of its borrowing scale, and to working-capital efficiency through receivables and inventories. Export settlement is mainly in US dollars, so renminbi movements affect quotations, export revenue and exchange gains or losses. The FY2023 risk account reports 15% corporate-income-tax preferences at named eligible subsidiaries and a 13% export VAT rebate rate for principal glass-fiber products, while describing government grants as occasional. Changes in eligibility or policy could affect earnings. These are the company’s reported conditions and risks for that filing; they are not a statement of current tax law, a quantified future loss or proof that every plant has the same benefit.

The FY2023 annual report describes trade constraints separately by product and manufacturing origin. Its US discussion says the additional tariff on covered Chinese-origin products remained 25% in that reporting view. For EU-bound glass-fiber fabrics, it describes a combined Chinese-base anti-dumping/countervailing rate of 99.7% and an Egyptian-base rate raised to 44% in July 2022. Its separate yarn discussion reports a 24.8% combined rate for Chinese-base products and a 13.1% countervailing rate for Egyptian-base products. It also reports a 35.75% Turkish anti-dumping rate on relevant Chinese-origin products. These are attributed historical disclosures, not current legal advice or a universal tariff across Jushi’s portfolio. The components must not be added again to rates explicitly stated as combined. Different rates and origins help explain the importance of a global production footprint, but do not quantify avoided duties, lost orders or the sales of any one factory.

The FY2023 report identifies CNBM Group as actual controller and CNBM Limited as controlling shareholder. It describes their December 2017 commitments to address overlapping glass-fiber businesses through possible entrusted management, restructuring, equity swaps or business adjustments. A proposed Jushi–Sinoma Science & Technology transaction was terminated on 15 December 2020 because the parties did not agree core terms. A two-year extension in December 2020 was followed by another two-year extension approved at the first extraordinary shareholder meeting on 4 January 2023, after the December 2022 announcement. Those are announcement and approval dates, not a completed integration. The report says an explicit integration plan had not been formed by the earlier deadline and Jushi would retain its existing business while options were studied. This unresolved business overlap matters for shareholder interests; routine statements of corporate independence do not mean the integration obligation was discharged.

The FY2023 annual report proposes a tax-inclusive cash dividend of CNY 2.75 per ten shares, totalling CNY 1,100,862,600.20, or 36.16% of reported shareholder-attributable annual profit. The proposal contains no bonus shares or capital-reserve conversion. This is the plan disclosed with the annual report, not evidence that the dividend had already been paid during FY2023. It describes capital allocation alongside the company’s investment and financing needs, without becoming a stock-return recommendation. The stated payout percentage uses the report’s attributable-profit denominator; it is not the share of operating cash flow or unrestricted cash.

Proposed annual cash dividend / 2023 / proposal for fy2023

RMB 1,100,862,600.2

Proposed dividend per ten shares / 2023 / proposal for fy2023

2.75 CNY/10 shares

The board’s FY2023 self-evaluation says no material financial-reporting control deficiency existed at 31 December 2023. The annual report also says the separate internal-control audit received a standard unqualified opinion. This account attributes those conclusions to the issuer’s disclosure; the separately referenced audit document has not been independently reviewed here. They do not guarantee that every operating risk or error is absent. The governance rectification discussion distinguishes completed rule revisions from the unresolved glass-fiber competition commitment. Committee attendance and approval records are condensed rather than treated as independent proof of effective operations.

The FY2023 report lists CNBM Group Finance as a related group company. Its deposit table gives a daily maximum limit of CNY 250 million and CNY 11,293,448.78 deposited and withdrawn during the year, with zero opening and closing deposit balances. A zero year-end balance does not mean no transactions occurred. The separate loan table gives a CNY 10 million facility at 2.40%, CNY 10 million drawn, no principal repayment and a CNY 10 million closing loan balance. The credit table also reports CNY 10 million total and actual usage; these entries are not assumed to be another CNY 10 million of borrowing to add to the loan table. Limits, annual flows and outstanding balances remain separate. The annual report’s absence of reported non-operating fund occupation or irregular guarantees is not a claim that no related-party finance or guarantee exposure existed.

Reported daily related-finance deposit limit / 2023 / cnbm finance deposit limit

RMB 250,000,000

Reported related-finance deposits during year / 2023 / cnbm finance deposit flow

RMB 11,293,448.78

Reported related-finance closing loan / 2023 / cnbm finance loan

RMB 10,000,000

The FY2023 guarantee table reports CNY 8,249.90 million of guarantees arising during the year and CNY 4,850.39 million outstanding at year-end, equal to 16.93% of reported net assets. It says all guarantees were for companies inside the consolidated perimeter, and reports zero guarantees outside subsidiaries. The table identifies CNY 500 million supporting beneficiaries with debt-to-asset ratios above 70%. These are guarantee obligations and risk categories, not actual cash payouts, incremental group loan principal or project capital expenditure. Annual new guarantees and the closing balance measure different periods and must not be summed. Internal-group scope does not eliminate default or funding exposure.

Reported subsidiary guarantees arising during year / 2023 / annual subsidiary guarantees

RMB 8,249,900,000

Reported closing subsidiary guarantees / 2023 / closing subsidiary guarantees

RMB 4,850,390,000

Reported guarantees for beneficiaries above 70% leverage / 2023 / high leverage beneficiaries

RMB 500,000,000

At 31 December 2023, the annual report identifies CNBM Limited as Jushi’s controlling shareholder, with 1,079,739,151 shares, or 26.97%, and CNBM Group as actual controller. The report separately states that CNBM Group held 44.50% of CNBM Limited directly and through subsidiaries. This is an upstream ownership figure, not CNBM Group’s direct percentage in Jushi; percentages at different levels are not added. Zhenshi Holdings held 624,225,514 Jushi shares, or 15.59%, of which 444,768,000 shares were pledged. A shareholder’s pledged-share count is neither a monetary debt of Jushi nor evidence that control changed or the pledge was enforced. The report says CNBM Limited and Zhenshi were unrelated and were not acting in concert; relationships among the other listed holders were unknown. Hong Kong Securities Clearing appears as a separate holder of 476,006,270 shares, or 11.89%; this row does not identify ultimate beneficial owners or establish that a single foreign investor controlled that stake. Its pledge status is marked unknown even though the numerical cell shows zero, so no affirmative absence of a pledge is inferred.

Reported registered-holder shares / 2023 / cnbm limited jushi holding

1,079,739,151 shares

Reported registered-holder percentage / 2023 / cnbm limited jushi holding

26.97%

Reported registered-holder shares / 2023 / zhenshi jushi holding

624,225,514 shares

Reported registered-holder percentage / 2023 / zhenshi jushi holding

15.59%

Reported registered-holder pledged shares / 2023 / zhenshi jushi pledge

444,768,000 shares

Reported direct/indirect upstream ownership / 2023 / cnbm group in cnbm limited

44.5%

The FY2023 report states that total shares and share-capital structure did not change during the year. Its securities-issuance, controlling-shareholder change, control-change and share-repurchase sections are marked not applicable; the preferred-stock chapter is also not applicable. These disclosures provide historical context for dilution and control rather than an assurance that future issuance or ownership changes cannot occur. The separate category for pledges of at least 80% by the controlling or largest shareholder and its concert parties is not applicable. That category does not cancel the pledge separately disclosed for Zhenshi, which is another significant shareholder. Shareholder corporate-registration and portfolio lists are condensed because they do not explain additional Jushi operating exposure.

The subsequent-events note lists CNY 1,100,862,600.20 both as proposed profit/dividend distribution and as a distribution reviewed, approved and declared. It relates to the annual distribution already described in the governance material. The note does not establish that this amount was paid in cash during FY2023, so it is not added again as a new cash outflow. The issuer states that, as of 31 December 2023, it had no important contingencies requiring disclosure, and marks important non-adjusting subsequent events as not applicable. Those statements refer to the report’s date and disclosure criteria. They do not erase the separately reported guarantees or establish that the entire group has no contractual, environmental or legal exposures. The board approved submission of the report on 18 March 2024; this is historical reporting evidence, not a current assurance about later events. Routine pension-account administration is retained in the underlying source without expanding the reader page into a benefits-procedure guide.

Reported dividend distribution in subsequent-events note / annual proposed and declared dividend note

RMB 1,100,862,600.2

Group net profit was CNY 3,157,311,174.05: CNY 3,044,441,957.13 attributable to parent shareholders and CNY 112,869,216.92 to minority holders. Other comprehensive income was CNY 106,231,313.36, making total comprehensive income CNY 3,263,542,487.41. Other comprehensive income records specified changes outside the current income statement; it is not additional product sales or operating cash. The equity statement shows CNY 2,122,800,505.89 distributions reducing equity, comprising CNY 2,085,634,235.28 for parent owners and CNY 37,166,270.61 for minority holders. The minority distribution recognized in equity differs from the CNY 1,314,820.00 minority cash payment shown in the cash-flow statement. They must not be substituted for one another or assumed to prove a later payment. Starting group equity of CNY 28,797,489,798.96 plus comprehensive income and CNY 60,000,000 minority capital, less the recognized distributions, reconciles to CNY 29,998,231,780.48 closing equity. The listed parent’s own equity was CNY 13,073,896,407.26; that separate amount does not replace or add to consolidated equity. The FY2023 profit-distribution proposal disclosed after year-end is a different reporting event from these FY2023 equity movements.

Reported consolidated total comprehensive income / 2023 / annual consolidated comprehensive income

RMB 3,263,542,487.41

Reported reduction of consolidated equity from distributions / 2023 / annual consolidated distribution equity change

RMB -2,122,800,505.89

Reported reduction of consolidated equity from parent-owner distributions / 2023 / annual consolidated parent owner distribution equity change

RMB -2,085,634,235.28

Reported reduction of consolidated equity from minority distributions / 2023 / annual consolidated minority distribution equity change

RMB -37,166,270.61