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 - Several trends in the energy markets are expected to shape the global oil, gas, and energy equities markets into 2026, influenced by geopolitical factors and supply-demand dynamics [1][2] Supply-Demand Dynamics - The oil market is currently experiencing an oversupply, with the International Energy Agency (IEA) projecting a supply exceeding demand by up to 3.84 million barrels per day (bpd) in 2026 [3] - Analysts predict that the oil glut will be short-lived, with expectations of market balancing later in 2026 and into 2027 [4] - Goldman Sachs anticipates that lower oil prices may be necessary to rebalance the market after 2026, barring significant supply disruptions or OPEC production cuts [5] Supply Waves - Supply waves are expected to be the main driver of oil and natural gas prices in the coming years, with a notable surge in LNG exports projected to exceed 50% from 2025 to 2030 [4][5] - Rystad Energy forecasts a year of upstream energy abundance in 2026, although potential downstream bottlenecks may arise [6] Refining Margins - High refinery utilization rates and elevated product crack spreads are anticipated, particularly with very high diesel crack spreads in Europe and the U.S. expected to persist through most of 2026 [7]

Core Insights - Oil prices stabilized after a significant drop, with Brent at approximately $63.08 and WTI at around $58.80, as traders reassessed OPEC's market outlook for 2026 [1][3] - The U.S. funding deal resolution alleviated some macroeconomic concerns, but crude oil remained influenced by supply signals rather than broader market sentiment [1][5] Supply and Demand Dynamics - OPEC's updated projections indicate a shift from a deficit outlook to a neutral supply-demand balance for the upcoming year, influenced by rising non-OPEC output and moderate consumption growth [3][5] - The International Energy Agency (IEA) has outlined a softer demand trajectory, contributing to market concerns about potential surplus risks [3] Market Reactions - Diesel margins strengthened, while crude futures showed a slower recovery, with Murban trading at approximately $65.43 due to steady Asian demand [4] - A softer dollar and lower Treasury yields provided some support to commodities, but did not alter the outlook for crude supplies [6] Current Market Conditions - Traders are maintaining small positions following the recent selloff, awaiting guidance on OPEC+ output levels and demand expectations for early 2026 [6]