China Jushi FY2025: Operating risks and business commitments

Management identifies exposure to changes in preferential income-tax treatment, government grants and export rebates. Several subsidiaries received a 15% income-tax rate, while the Huai'an renewable-power business has a time-limited exemption and reduction schedule. The filing also describes the November 2024 reduction of the export VAT rebate for most glass fiber products from 13% to 9%. These are historical disclosures in this annual report, not a verification of tax rules currently in force.

Management identifies exchange-rate exposure from export pricing and foreign-currency settlements, with US dollars the main settlement currency for exports. It also identifies interest-rate exposure from borrowing, and liquidity pressure from receivables and inventories. These disclosures explain operating exposures; they do not establish that a liquidity crisis occurred.

The annual report describes trade restrictions affecting exports from the Chinese and Egyptian bases to several markets. Management warns that further trade friction or policy changes could affect overseas sales. Manufacturing also consumes substantial electricity, natural gas, minerals and chemical inputs, exposing production costs to supply and price changes. The detailed tariff discussion mixes 2025 circumstances with developments known by the March 2026 filing; it must not be treated as either a pure year-end tariff schedule or current legal advice.

The report's industry discussion describes stronger demand in wind energy, automotive and electronics alongside release of previously planned glass fiber capacity. It warns about structural overheating in specialist electronic glass fiber. Its year-end industry estimate of RMB 13.38 billion in projects under construction or planned is an industry figure, not Jushi's own capital budget. The expected concentrated release in 2027 is a forecast in the filing, not completed production.

In the trade-risk discussion, China Jushi describes a 55% special-tariff burden on glass-fiber exports from its Chinese bases to the United States, composed of a 25% measure, a 20% measure introduced in February and March 2025, and a retained 10% measure discussed in August 2025. For the Egyptian base, it describes a 10% special tariff from April 9, 2025. The same passage then refers to a temporary US 10% surcharge for February 24 to July 24, 2026, subject to exemptions. The 2026 statement is information disclosed after the FY2025 reporting period. These are the company's descriptions of particular measures, not a verified current customs schedule or a complete all-in import-duty calculation. No 55% plus 10% calculation is made: the passage mixes different dates and does not resolve how each measure applies to a specific shipment.

For exports from its Chinese bases to the European Union, the company describes combined anti-dumping and countervailing duties of 24.8% for specified glass-fiber yarn and related products, including direct and assembled rovings, chopped strands and chopped-strand mat. It separately describes a 99.7% combined rate for glass-fiber fabrics. The report states that the existing rates continued during the relevant reviews: an interim review for the yarn/product measures announced in August 2024 and sunset reviews for fabrics initiated in April 2025. Yarn/product and fabric categories must remain separate; these figures are not a rate for all electronic-grade yarn, all fabrics worldwide or output of the new Huai'an line. This is the FY2025 filing's account, without independent verification of current tariff law.

The filing says specified glass-fiber exports from the Chinese bases to Turkey continued to face a 35.75% anti-dumping duty under a measure dated October 18, 2022. For Egypt, it cites a July 19, 2025 final-disclosure document in an anti-dumping investigation, giving Jushi Egypt a rate of 9.58%. A rate in a final-disclosure document is retained with that procedural description; this annual-report passage is not independent evidence of the date on which the measure became effective for a shipment. Rates quoted for other Egyptian and Bahraini companies are not assigned to Jushi. The disclosure illustrates that origin and exporter can matter, while leaving current legal applicability unverified.

The company describes a July 10, 2025 Indian final-disclosure document proposing anti-dumping rates of 40% to 50%, calculated using injury margins, for specified Chinese-origin glass-fiber products. The listed scope includes direct and assembled rovings, chopped strands and chopped-strand mat, but excludes thermoplastic chopped strands. The report explicitly says the matter still required submission to the Indian Ministry of Finance, which could retain or cancel the measure. The range therefore is not presented as a single effective tariff or a completed decision, and no midpoint or product-specific rate is inferred. This is the filing's description of the proceeding, rather than confirmation of its subsequent outcome.

The filing describes a Brazilian anti-dumping investigation initiated on August 6, 2025 for Chinese- and Egyptian-origin glass-fiber products. Its listed scope covers direct and assembled rovings and excludes chopped strands and chopped-strand mat. Management says it was responding to the investigation and expected it to finish before the end of February 2027. The investigation and expected timetable do not establish an imposed duty, a final outcome or lost sales. Management warns that escalating trade friction or changes in export-market policies could affect overseas sales, but this passage does not quantify market-by-market revenue losses or mitigation benefits.

For exports from its Egyptian base to the European Union, Jushi describes a 13.1% countervailing duty on specified glass-fiber yarn and related products, with a sunset review started in June 2025. It also reports an anti-dumping investigation initiated in February 2025. The annual report then describes a March 13, 2026 final-disclosure document proposing an 11% anti-dumping duty on the Egyptian products, with a final decision expected before mid-April 2026. That proposal and expected decision are post-period disclosure context, not a duty proven to have been imposed during FY2025. For Egyptian glass-fiber fabrics, the company separately describes a 44% combined anti-dumping and countervailing rate and June 2025 sunset reviews. The proposed 11% is not added to 13.1% as a confirmed FY2025 total, and fabric measures are not assigned to the yarn category.

Jushi’s sustainability report identifies energy-price volatility, low-carbon technology upgrades, heat and water availability as possible operating constraints. Its current-impact assessment says the identified climate risks had no material adverse effect on operating continuity, asset security or current financial conditions. The scenario matrices therefore must not be read as evidence that all the listed floods, shutdowns or customer losses occurred in 2025. The physical-risk modelling uses site coordinates and asset weights under lower- and higher-emission pathways; under the higher-emission pathway it rates extreme heat and average temperature rise as significant in the long term through 2060. These are management model ratings, not loss forecasts verified by SinoFilings. Potential responses include equipment cooling, maintenance and low-carbon capital investment. The report does not supply a site-by-site monetary loss estimate.

The FY2024 cash distribution of RMB 960,752,814.72 was completed in May 2025, and the FY2025 interim distribution of RMB 680,533,243.76 was completed in October 2025. Separately, the board proposed a further RMB 754,035,615.95 distribution in March 2026, which the subsequent-events note says still required shareholder approval. The reported FY2025 total of RMB 1,434,568,859.71 includes that proposal and must not be described as entirely paid by the year end. Capital allocation here provides operating cash context, not an investment recommendation.

The company completed its repurchase by 24 November 2025, buying 34,528,223 shares for RMB 539,657,450 excluding transaction taxes and fees. The repurchased shares were intended for equity incentives, with cancellation required under specified approval-failure conditions. A restricted-share incentive draft was approved by the board on 31 December 2025. The financial notes mark share-based payment expense as not applicable. A repurchase and a board-approved draft are not evidence that awards had been granted or a share-based payment charge recognised.

The important-matters table reports RMB 1,551,790,000 of guarantees outstanding at FY2025 year end, all for entities within the consolidated group, equal to 4.99% of the company's net assets. Guarantees arising during the year were RMB 4,097,930,000; that annual flow is not an extra year-end balance. Guarantees outside subsidiaries were explicitly zero. Separately, the related-party note marks both guarantor and guaranteed-party subsections as not applicable. That mark does not cancel the subsidiary guarantees disclosed in the important-matters table; these passages do not explain the different classifications. The subsidiary exposure should not be added automatically to consolidated debt or treated as a guarantee payment already made.

Guarantees arising for subsidiaries during the year / 2025 / subsidiary guarantees annual flow

RMB 4,097,930,000

Outstanding guarantees outside subsidiaries / 2025 / outside subsidiaries guarantees

RMB 0

Reported guarantee total to company net assets / 2025 / reported guarantee to company net assets

4.99%

Jushi's consolidated provision note recognises RMB 61,429,001.01 at 31 December 2025 for risk-protection obligations under the 2023 Zhongfu Lianzhong and Sinoma Wind Power Blade integration agreement. Former shareholders bear losses caused by pre-handover matters in their pre-integration ownership proportions. The intermediary's preliminary December 2025 audit assessed RMB 191,725,970.69 of relevant financial effects; this is a broader amount than Jushi's recognised obligation. The final compensation amount still required the parties to accept the audit results and a special review report. The related-party note names Zhongfu Lianzhong or Sinoma Blade as contractual creditor, while the contingency note refers back to this same provision. These are cross-references to one recognised balance, not additional liabilities to sum. Neither the preliminary assessment nor the provision establishes cash compensation paid in FY2025.

Preliminary financial effects assessed for integration matters / 2025 / integration preliminary audit financial effects

RMB 191,725,970.69

The company reports that it no longer has a supervisory board and that the board audit committee exercises its supervisory functions. Subsidiaries must report related-party transactions, external guarantees and external investments to the company before the relevant actions. The group describes delegated, differentiated management of subsidiaries. These are disclosed governance arrangements, rather than independent proof that every control operated effectively.

The board's assessment at 31 December 2025 says no material weaknesses in financial-reporting internal control were identified and considers that control effective in all material respects. The annual report also states that Zhongshen Zhonghuan issued a standard unqualified internal-control audit opinion. The separate control assessment and audit documents are referenced by the annual report but are not included in this extraction. This statement is distinct from the financial-statement audit and does not certify every project narrative.

The FY2025 filing recounts a continuing commitment by the controlling shareholder and ultimate controller to resolve overlapping glass-fiber and related-products businesses within the wider group. The original December 2017 commitment contemplated business integration within three years through measures such as entrusted management, asset restructuring, equity swaps or business adjustments. A proposed transaction involving Jushi and Sinoma Science & Technology was terminated on 15 December 2020 because the parties did not agree on its core terms. The commitment was subsequently extended in 2020, 2022 and again in 2024, each time by two years. The filing says a definite integration plan had not been formed by the relevant deadlines; it describes complexity across several listed companies and markets as the group’s explanation. Jushi would continue its existing glass-fiber business while the group studied a solution. This is unresolved business integration, not a completed acquisition, a transfer of production assets or a confirmed factory consolidation.

The important-matters chapter expressly lists continuing undertakings, including the business-overlap commitment, shareholder share-purchase and retention undertakings, and a conditional cancellation obligation for shares repurchased for incentives. These undertakings have different parties, purposes and deadlines. They coexist with the financial-note subsections that mark related-party commitments and important commitments as not applicable. A not-applicable mark in one accounting-note subsection is therefore not a declaration that no undertakings exist anywhere in the filing. The repurchase’s execution and the incentive plan’s approval conditions remain separate from the still-unfinished business integration; none proves that a new operating project has been authorised or completed.

China National Building Materials Group Finance is identified as a fellow group company. The financial-business table reports deposits opening at RMB 646,654,233.27 and closing at RMB 780,215,611.60. Total deposits made during FY2025 were RMB 16,362,377,045.42 and withdrawals RMB 16,228,815,667.09: these are gross movements through the account, not sales revenue or an extra year-end pool of cash. The closing amount also appears in the related-party monetary-funds note and must not be counted twice. The disclosed maximum daily deposit limit is RMB 800,000,000.00. Separately, the table reports credit capacity of RMB 800,000,000.00 with actual utilisation of RMB 0.00, and marks loan business as not applicable. A deposit limit and unused credit capacity are different measures; unused capacity is not an outstanding borrowing or cash already received. The English counterparty name is a rendering of the Chinese filing name.

Finance-company closing deposits / 2025 / annual report disclosed treasury and governance scope

RMB 780,215,611.6

Finance-company opening deposits / 2024 / annual report disclosed treasury and governance scope

RMB 646,654,233.27

Gross deposits made during year / 2025 / annual report disclosed treasury and governance scope

RMB 16,362,377,045.42

Gross withdrawals during year / 2025 / annual report disclosed treasury and governance scope

RMB 16,228,815,667.09

Maximum daily deposit limit / 2025 / annual report disclosed treasury and governance scope

RMB 800,000,000

Finance-company credit capacity / 2025 / annual report disclosed treasury and governance scope

RMB 800,000,000

Finance-company credit utilisation / 2025 / annual report disclosed treasury and governance scope

RMB 0

The related finance-company table gives a deposit interest-rate range of 0.55% to 1.90%. The related-transaction note reports interest income from this finance company of RMB 9,015,912.14 in FY2025, against RMB 1,785,593.02 in FY2024. The rate range does not identify one rate applied to every deposit, and the annual income is not a year-end deposit balance. Daily balances, tenors and the applicable rate for each placement are not supplied here, so the year-end balance and this range do not establish an independently calculated annual yield or return on the company’s operating business.

Finance-company annual interest income / 2025 / annual report disclosed treasury and governance scope

RMB 9,015,912.14

Finance-company prior-year interest income / 2024 / annual report disclosed treasury and governance scope

RMB 1,785,593.02

Disclosed deposit rate lower bound / 2025 / annual report disclosed treasury and governance scope

0.55%

Disclosed deposit rate upper bound / 2025 / annual report disclosed treasury and governance scope

1.9%

The company reports no material litigation or arbitration during FY2025 and marks non-operating occupation of funds by controlling shareholders or related parties, unlawful guarantees and bankruptcy reorganisation as not applicable. These statements retain the filing’s specified scope. They do not exclude smaller disputes, ordinary related-party dealings or the separately disclosed guarantees for consolidated subsidiaries.

The sustainability report says seven internal-control supervision exercises and a full-level self-assessment identified 118 internal-control deficiencies in 2025. The passage does not classify their severity or quantify resulting loss. This broader operational self-assessment is not equivalent to the annual report’s separately stated financial internal-control audit opinion, and this page does not recast all 118 findings as material financial-reporting weaknesses. The company also identifies export-control and economic-sanctions risks as issues requiring attention; the supplementary passage does not specify a regime, affected product, realised order loss or quantified exposure. The annual trade-risk account therefore remains the more detailed source for its stated historical measures.