China Jushi FY2024: Operating risks and business commitments

The FY2024 filing says Jushi Group, Jushi Jiujiang, Jushi Chengdu and Tongxiang Leishi benefited from a 15% corporate income-tax rate. The detailed note gives different eligibility periods: 2023-2025 for Jushi Group and Tongxiang Leishi, 2022-2024 for Jiujiang, and 2021-2030 under the western-region development policy for Chengdu. These disclosed periods do not establish renewal after expiry or a single 15% rate for the consolidated group. For Jushi New Energy (Huai'an), the report describes a wind-power income-tax exemption for the first three tax years beginning with the first production-business revenue, followed by three years at half tax, and a 50% VAT refund for its own wind-generated electricity. It does not specify the first qualifying tax year in this passage. Management also calls government grants occasional and warns that changes in eligibility or support could affect earnings. No benefit amount, group effective tax rate or tax treatment of the separate 500MW development is inferred.

The annual report describes a November 15, 2024 policy announcement reducing the export VAT rebate for certain non-metallic mineral products from 13% to 9%, including most glass-fiber products. A rebate is part of export tax economics, distinct from a destination country's import duty. Management says the reduction could affect operating performance, but the passage does not quantify an earnings loss or give the effective application date for individual shipments. The four-percentage-point change is not a four-point decline in group gross margin, nor a rule for every product exported by the company. This records the FY2024 filing's account rather than current tax advice.

Disclosed previous export VAT rebate / 2024 / specified glass fiber export rebate before

13%

Disclosed reduced export VAT rebate / 2024 / specified glass fiber export rebate after

9%

Management says export business is settled mainly in US dollars, exposing overseas quotations and exchange gains or losses to renminbi-dollar movements. The financial-risk note also identifies overseas subsidiaries' net investments, describes forward foreign-exchange contracts and additional foreign-currency borrowing at overseas operations as mitigation, and reports that 75.69% of interest-bearing debt was at fixed rates at December 31, 2024, versus 63.87% a year earlier. This ratio concerns interest-bearing debt, not all liabilities; hedging activity does not prove that exchange risk has been eliminated. The company warns that its loan scale, interest changes and the weight of receivables and inventories in current assets can affect financing costs and liquidity. No hedge coverage ratio or quantified future earnings sensitivity is given here.

Reported fixed-rate share of interest-bearing debt / 2024 / interest bearing debt fixed rate share

75.69%

Reported fixed-rate share of interest-bearing debt / 2023 / interest bearing debt fixed rate share comparative

63.87%

The FY2024 filing recounts US additional tariffs on Chinese-origin goods, including the company's glass-fiber products, rising to 25% in May 2019. It then describes additional measures in February and March 2025 and says Chinese glass-fiber exports to the United States faced a burden of nearly 50%. Those early-2025 statements are post-period context in the FY2024 report, not tariffs shown to have applied throughout 2024. 'Nearly 50%' remains the company's approximate description; it is not normalised to an exact 50% field or reconstructed by adding quoted rates. This passage does not establish the rate for a specific shipment, an Egyptian-origin shipment, local US production or today's customs treatment.

For glass-fiber fabrics exported to the European Union, the filing describes a final combined anti-dumping and countervailing rate of 99.7% for Chinese production bases. It explains that adjustments to the anti-dumping component avoided double counting; the separate 30.7% countervailing figure must not be added again to the combined rate. For Egyptian fabrics, it recounts a combined rate of 30.9%, increased to 44% after an anti-absorption proceeding from July 19, 2022. Yarn and related glass-fiber products have different disclosed measures: 24.8% combined for Chinese bases and 13.1% countervailing for the Egyptian base. The report describes an August 30, 2024 interim anti-dumping review covering Chinese rovings, chopped strands and chopped-strand mat, then a February 17, 2025 investigation involving Bahrain, Egypt and Thailand. The latter is post-period context, not a completed FY2024 duty. These are historical issuer disclosures with product and origin boundaries; they do not establish current law, a single global glass-fiber rate or a tax burden for the new electronic-glass-fiber project.

The report says Chinese-base glass-fiber products exported to Turkey continued to face a 35.75% anti-dumping duty under a measure dated October 18, 2022. It separately describes an August 8, 2024 investigation into Egyptian- and Bahraini-origin chopped strands, rovings and chopped-strand mat. For India, it describes a June 29, 2024 investigation into specified Bahraini-, Chinese- and Thai-origin direct and assembled rovings, chopped strands and chopped-strand mat, with exclusions including thermoplastic and wet-use chopped strands, surface or thin mats and glass-fiber fabrics. An investigation does not establish a final duty or lost orders. Management warns that further trade restrictions or political and economic changes in export markets could affect overseas sales; the report does not quantify country-specific losses. No subsequent proceeding outcome is written back into this year.

Glass-fiber production consumes substantial electricity, natural gas, minerals and chemical auxiliary materials. Management identifies both availability and price changes as risks to production and manufacturing cost. This connects input supply to the company's operating model, but the passage gives no quantified interruption, cost sensitivity or plant-by-plant exposure. Renewable-power developments and technical cost-reduction efforts described elsewhere do not by themselves prove that these supply and price risks have been removed.

The important-matters table reports RMB 2,568,850,000 of guarantees outstanding at FY2024 year end, all for companies within the consolidated scope, equivalent to 8.55% of the company's net assets. Guarantees arising for subsidiaries during the year were RMB 5,881,190,000, a flow rather than an additional closing balance. Outstanding guarantees outside subsidiaries were explicitly zero. The table separately identifies RMB 458,330,000 of debt guarantees for recipients whose asset-liability ratio exceeded 70%; it is a category within the guarantee disclosures, not an extra amount to add to the total. The related-party guarantee subsections are marked not applicable, and the contingency note says there were no material contingencies requiring disclosure at December 31, 2024. Those classifications do not erase the reported subsidiary guarantees or establish that all risks and commitments were zero. The filing does not explain the difference in classifications, and guarantees are not added automatically to consolidated debt or treated as cash payments.

Outstanding subsidiary guarantees / 2024 / subsidiary guarantees closing

RMB 2,568,850,000

Guarantees arising for subsidiaries during the year / 2024 / subsidiary guarantees annual flow

RMB 5,881,190,000

Outstanding guarantees outside subsidiaries / 2024 / outside subsidiaries guarantees

RMB 0

Reported guarantee total to company net assets / 2024 / reported guarantee to company net assets

8.55%

Guarantees for recipients with asset-liability ratio above 70 percent / 2024 / guarantees recipient liabilities to assets above 70 percent

RMB 458,330,000

China National Building Material Group, the actual controller, and China National Building Material Co., Ltd., the controlling shareholder, had undertaken in December 2017 to resolve overlapping glass-fiber businesses within three years. The FY2024 report recounts a proposed restructuring with Sinoma Science & Technology that was terminated on December 15, 2020 because core transaction terms could not be agreed, followed by successive two-year extensions. It says another extension was announced on December 10, 2024: the undertaking would run for two years from approval at Jushi's first extraordinary general meeting of 2024, held on December 27, 2024. The report says no definite integration plan had been formed by the earlier deadline and that Jushi would retain its existing glass-fiber businesses at this stage. This is an unresolved shareholder-level business-overlap undertaking, not evidence that a restructuring or business transfer had been completed. No future transaction valuation, timetable beyond the stated undertaking or benefit to minority shareholders is assumed.