Industry Competition Issue Unresolved for Ten Years: China Jushi's "Official Explanation" Fails to Soothe Investor Concerns | Live Performance Meeting

China Financial News Agency, March 20 (Reporter Wang Bin) Although China Jushi (600176.SH) delivered double-digit growth in 2025 performance, reversing the situation of two straight years of net profit declines, the company’s net profit in last year’s Q4 still fell 21.32% year over year and decreased 18.59% quarter over quarter, drawing broad attention and follow-up questions from investors. At the same time, an industry-competition issue hanging over the company for a decade—promised to be resolved but repeatedly delayed—once again became the focus of this earnings call, with the dissatisfaction of minority shareholders clearly evident.

At the company’s 2025 annual earnings briefing held today, when faced with a barrage of questions from investors about the reasons behind the Q4 2025 performance decline, China Jushi’s management repeatedly used the same phrase—“multiple factors working together, including fluctuations in market demand, changes in product mix, changes in raw material and energy prices, and seasonal factors,”—as a unified response, without providing a more concrete breakdown. As for the progress on high-end products that the market cares most about, such as low-dielectric electronic fabric, the company’s response has also consistently stayed at “R&D, certification, and sample submission are being advanced in an orderly manner,” without revealing any substantive breakthroughs or a timeline for mass production.

By contrast, investors expressed even stronger dissatisfaction with the fact that the controlling shareholder, China Building Materials, has still been unable to resolve the industry-competition issue with Sinoma Technology. According to the company’s announcement, the commitment was first made in 2016, with the original plan to resolve it by February 2017. However, since then, it has been delayed three times: the controlling shareholder China Building Materials Co., Ltd. and its actual controller, China Building Materials Group, each applied for a delay in fulfilling the commitment to resolve the industry-competition issue in December 2020, December 2022, and December 2024—three times in total. Each application for a delay extended the deadline by 2 years, and the reasons for each delay were similar: the issue involves multiple listed companies across Shanghai, Shenzhen, and Hong Kong, so the situation is complex and requires sufficient time to study and demonstrate feasible solutions.

On December 10, 2024, the company announced again that it would further extend the commitment fulfillment period to December 10, 2026.

This means a commitment that should have been fulfilled nine years ago has been postponed four times and has stalled until now. At this earnings briefing, multiple questions directly pointed to this matter. One investor asked, “Three cumulative breaches, completely ignoring the directionally guiding opinions from the CSRC to protect the interests of minority investors,” and suggested replacing the independent director “who is not guided by a conscience and breaches for the benefit of the major shareholder.” Another investor noted, “The company has failed to resolve the industry-competition issue with Sinoma Technology for years, repeatedly violates its promises, and yet shows indifference. Is it really going to just let things take their course?” There is also investor concern: “It is rumored that because performance in the fiberglass industry has recovered, the major shareholder’s integration commitment as of the end of this year will have to breach again.”

In response to multiple related questions, China Jushi’s General Manager Yang Guoming and the Secretary to the Board, Ding Chengche, both repeated the same statements: the controlling shareholder and the actual controller continue to promise to resolve the industry-competition issue, and if there are any new developments, they will promptly make an announcement. However, this response has not been able to ease investors’ doubts.

Besides the above focal points, the earnings briefing also covered other key aspects of the company’s operations. Regarding overseas bases, the company said its Egyptian plant will maintain strong profitability in 2025, and the U.S. plant’s results have improved significantly. It also plans to further increase overseas production capacity during the “14th Five-Year Plan” period (2026–2030). As of now, the company’s overseas production bases are all operating normally and steadily. For high-end products, the company emphasized that the increase in their share will provide positive support to overall profitability: demand for high-end products such as wind power and thermoplastic, as well as for 7628 electronic fabric, remains steady, and supply is relatively tight. On capacity, the company said it will deploy additional capacity in a paced manner based on market conditions, and the Huai’an 200,000-ton high-performance fiberglass project will be brought online in phases.

To boost investors’ confidence, China Jushi’s management disclosed at this earnings briefing that the company’s overall production and sales are currently doing well. Energy prices at production bases both in China and abroad are basically stable. It expects that in the future, price trends for ordinary fiberglass products will be mainly stable due to relatively ample supply; while high-end products will increase steadily. “We believe that over the next few years, the fiberglass industry’s growth attributes will strengthen, and high-end development and globalization are the core trends.”

Yang Guoming pointed out that as wind power blades develop toward large megawatt directions above one hundred meters, it will significantly drive demand for high-modulus and high-strength fiberglass, with broad market space. Although the wind power sector’s demand may fluctuate in stages throughout the year, overall support remains strong. The company’s relevant high-performance fiberglass products have already been used in supporting applications, and are expected to continue benefiting from the trend toward larger blade sizes.

It is worth noting that this earnings briefing collected and responded to more than 40 questions, through online solicitation and on-site Q&A, showing that the market is highly concerned about the company’s current performance turning point and historical issues. However, for the detailed attribution of Q4 2025 performance, the specific breakthroughs in high-end products, and the resolution path for the industry-competition issue, the answers provided by the company still have not fully met investors’ expectations. How to rebuild investors’ confidence with more transparent communication and more practical actions is a challenge that China Jushi’s management needs to address.

(China Financial News Agency reporter Wang Bin)