Summary of China Jushi 2026 Business Outlook Call Company Overview - **Company**: China Jushi (600176.SS) - **Date of Call**: January 12, 2026 - **Participants**: Mr. Ding Chengche (Board Secretary), Ms. Xu Mengdan (IR Director) Key Industry Insights - **Cyclical Outlook**: Management anticipates 2024 as the cycle trough, 2025 as a recovery year, and 2026 as a favorable year with resilient demand and moderated supply growth [3][15] - **Supply-Demand Dynamics**: Expected supply growth of approximately 500,000 tons in 2026 compared to around 1 million tons in 2025. Demand growth in 2026 is estimated at around 6%, with potential upside to 8-9% [3][15] Financial Performance - **Fiberglass Profitability**: Profitability has stabilized at a higher level, with net profit per ton consistently exceeding RMB 800, currently around RMB 900-1000. Most peer producers are near breakeven [4][12] - **E-fabric Demand**: A broad-based recovery in E-fabric demand has been observed, with profitability exceeding RMB 1/sqm. Management expects to maintain this level in 2026 [5][13] Strategic Initiatives - **Capex Discipline**: Capital expenditures remain stable at RMB 3-5 billion, with maintenance capex capped at approximately RMB 1 billion [11] - **Low DK Fabrics**: Progress is being made in low DK products, with ongoing customer validation. Challenges remain in yield rates and process stability [8] Market Outlook - **Overseas Demand**: After a weak 2025 due to geopolitical factors, overseas demand is expected to recover in 2026, with exports guided at approximately 1.1 million tons and total shipments at around 3.3 million tons [9][10] - **US Plant Performance**: The US plant was loss-making in 2024 but significantly improved in 2025, with expected profitability in 2026 under current tariff conditions [10] Pricing Strategy - **Glassfiber Pricing**: Annual contract pricing is under negotiation, with moderate price increases expected. Jushi is avoiding aggressive price hikes to prevent triggering excess capacity [4][12] Risks and Opportunities - **Downside Risks**: Include weaker-than-expected demand for glass fiber products, rising energy costs, and greater-than-expected capacity additions [15] - **Upside Risks**: Include better-than-expected demand and supply-side discipline that could help protect margins [15] Valuation - **Target Price**: The target price for Jushi is set at RMB 19.8/share, based on a price-to-earnings ratio of 19.8x on 2026 estimated net income [14] Conclusion - The call reinforces a more constructive medium-term outlook for China Jushi, with a recommendation to maintain a "Buy" rating based on the anticipated recovery and growth in demand for fiberglass and E-fabric products [1][6]

Core Insights - Nucor reported Q3 earnings that significantly exceeded expectations, with adjusted EPS of $2.63 compared to the consensus estimate of $2.16, marking a 21.8% beat [3][4][13] - Revenue reached $8.52 billion, surpassing the expected $8.15 billion, resulting in a $370 million beat on the top line [4][13] - The company experienced a remarkable 143% year-over-year growth in net income, totaling $607 million [5][11][13] Financial Performance - Adjusted EPS: $2.63, up 21.8% from expectations [4][13] - Revenue: $8.52 billion, reflecting a 4.5% increase year-over-year from $7.44 billion in Q3 2024 [4][13] - Net Income: $607 million, a 143% increase year-over-year [5][13] - Cash and Investments: $2.75 billion, down 35% year-over-year from $4.26 billion [9][13] - Total Assets: $34.78 billion; Shareholders' Equity: $20.97 billion [8][13] Strategic Positioning - Nucor's strong balance sheet supports ongoing dividends and share buybacks, having returned nearly $1 billion to shareholders year-to-date [7] - The company declared its 210th consecutive quarterly dividend of $0.55 per share, payable on November 10 [7] - Management is focusing on expanding core steelmaking capabilities while venturing into downstream, steel-adjacent businesses [8][14] Industry Context - The steel mills segment faced challenges with declining earnings due to lower volumes and margin compression, reflecting broader industry dynamics [8][12] - Management anticipates Q4 earnings to be lower than Q3 due to expected decreases in volumes and selling prices in the steel mills segment [12][15] - The commentary indicates a stabilization in the industry, but not an immediate acceleration in demand [14]

Group 1 - Summit Midstream (NYSE: SMC) has undergone a complete reorganization, but the market remains skeptical and requires proof of this change for a positive response [2] - The oil and gas industry is characterized as a boom-bust, cyclical sector, necessitating patience and experience for successful investment [2] Group 2 - The analysis provided in the Oil & Gas Value Research service focuses on identifying undervalued companies within the oil and gas sector, examining their balance sheets, competitive positions, and development prospects [1]

Financial Data and Key Metrics Changes - The first quarter results were in line with earlier expectations, but activity levels softened further in key segments and geographies [9] - Adjusted free cash flow for the quarter was $66 million, with a free cash flow conversion rate of 26.1% compared to 24.4% in Q1 2024 [10][23] - Adjusted EBITDA margins for Q1 were 21.2%, impacted by lower revenues and project startup costs [11] Business Line Data and Key Metrics Changes - North America saw a sequential decline of 4%, while Europe softened due to operator cutbacks in the UK [10] - The Middle East and Asia regions experienced year-on-year growth, demonstrating resilience [10] - The company successfully delivered advanced services in the UK North Sea and deepwater Brazil, showcasing technology adoption [12] Market Data and Key Metrics Changes - Activity in Mexico is expected to decline around 60% year-on-year, worse than the previously anticipated 30% to 50% [10] - The overall international market has softened, with significant drops in Mexico and continued reductions in U.S. land activity levels [14] - The company anticipates a broad-based slowdown in the second half of the year due to global trade reductions and increased supply [18] Company Strategy and Development Direction - The company is focused on maintaining margins and not chasing market share without value [29] - A significant reduction in gross debt by approximately $1 billion has strengthened the balance sheet [30] - The company is adapting its cost structure and has reduced headcount by over 1,000, with annualized personnel expenses down by over $100 million [16][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's future but acknowledged the changed market conditions and uncertainty [29] - The outlook for 2025 includes expected revenue declines of high single to mid double digits in North America and low double to mid double digits internationally [20] - Management remains hopeful for a milder spending reduction compared to previous cycles due to industry discipline [16] Other Important Information - The company has divested its Argentina pressure pumping and wireline businesses to focus on the Vaca Muerta region [19] - The proceeds from divestitures will be used to enhance the portfolio and return cash to shareholders [19] - The company plans to maintain its quarterly dividend of $0.25 per share and continue its share repurchase program [11][30] Q&A Session Summary Question: Insights on international markets and MENA trends - Management noted that international markets, particularly MENA, tend to be more stable, with ongoing robust spending patterns in regions like Kuwait and the UAE [37][40] Question: Duration and severity of the downturn - Management indicated that the current downturn is expected to be milder and not universal, with different causes in different regions [43][44] Question: Impact of divestitures on guidance - The divestitures are expected to impact revenue by approximately 100 to 300 basis points, with adjustments made for North America and other regions [55][56] Question: Use of proceeds from divestitures - Proceeds will enhance overall liquidity, support dividends, and allow for opportunistic debt reduction and potential acquisitions [61][62] Question: Potential tariff impacts - Management stated that quantifying tariff impacts is difficult at this stage, but they expect a degree of uncertainty leading to reduced activity levels [106][107] Question: Digital spending outlook - Management believes that digital products focused on production optimization will remain a significant opportunity, despite potential reductions in discretionary spending [110]