Summary of China Jushi (600176.SS) Conference Call Company Overview - **Company Name**: China Jushi - **Industry**: Glass fiber production and sales - **Headquarters**: Zhejiang, China - **Production Bases**: Zhejiang, Jiangxi, Sichuan, with additional facilities in Egypt, the US, and India - **Global Position**: Leading player in the glass fiber industry with a production capacity of 1.7 million tons as of 2018 [14][15] Key Financial Insights - **Target Price**: Raised to Rmb26.1 per share, reflecting a 39% expected return from the current price of Rmb18.78 [3][16] - **Market Capitalization**: Rmb75.179 billion (approximately US$10.788 billion) [3] - **Earnings Forecasts**: - 2025E: Net profit of Rmb3.472 billion, EPS of Rmb0.868 - 2026E: Net profit of Rmb5.287 billion, EPS of Rmb1.321 - 2027E: Net profit of Rmb5.992 billion, EPS of Rmb1.498 [5][8] - **Earnings Revisions**: - 2025/26/27 earnings forecasts revised up by 9.7%/35.8%/31.1% due to higher volume and gross margin expectations [2][8] Price and Profitability Trends - **E-fabric Price Increase**: E-fabric prices increased by approximately Rmb0.2 per square meter, with E-glass yarn prices rising by Rmb100-200 per ton month-over-month [1][2] - **Profit Margins**: - E-fabric unit net profit expected to rise to Rmb1.3-1.4 at current average selling prices (ASPs) of Rmb4.5 including tax [1] - Gross margin projected to improve significantly, reaching 36.9% in 2026E and 38.7% in 2027E [7] Market Dynamics and Catalysts - **Supply Constraints**: The supply of E-fabric remains tight, suggesting potential for further price increases in Q1 [1][11] - **Management Guidance**: Anticipated updates on low-DK fabric business progress expected around the annual results presentation [1][11] - **Upside Catalyst**: A 90-day upside catalyst watch has been initiated, anticipating further price hikes and management announcements [10][11] Risks and Considerations - **Downside Risks**: - Weaker-than-expected demand for glass fiber products - Rising energy and power costs - Greater-than-expected capacity additions [17] - **Upside Risks**: - Better-than-expected demand - Supply-side discipline that could protect margins [17] Conclusion - **Investment Recommendation**: The company is rated as a "Buy" due to improved earnings visibility, expected price increases, and a favorable market position within the glass fiber industry [1][15]