China Jushi "Resuming coverage at Buy; electronic fabric drives upside" (Buy)

研报英文原文证据摘录

China Jushi "Resuming coverage at Buy; electronic fabric drives upside" (Buy)

China Jushi UBS-S Research

UBS -S Research THESIS MAPThesisa guideMap to our thinking and what´s where in this report

Pivotal Questions Q: Can electronic-fabric pricing sustain its upcycle and drive meaningful earnings upside?

Yes. Supply remains structurally constrained by loom equipment bottlenecks, long equipment lead

times, limited availability of qualified domestic alternatives, and conversion of ordinary-fabric

capacity to higher-margin thin fabric for AI servers. Against this backdrop, continued repricing should

support a sharp profit inflection, while Jushi’s scale, product mix and exposure to high-end electronic

fabric give it meaningful earnings leverage through the cycle.

Q: Will Jushi maintain stable profitability in its glass fibre business?

Yes. Net capacity additions remain modest, as planned gross additions are partly offset by cold-repair

capacity, while elevated platinum prices have raised expansion costs and should help deter marginal

new supply. As the domestic market leader with around 30% share and industry-leading costs, Jushi

has a solid profit bottom even if roving prices remain below historical averages.

UBS-S VIEW We resume coverage of China Jushi with a Buy rating and Rmb43.00 12-month price target, implying

~25% upside and a 20x 2027E PE. Our positive view is driven by a sharp earnings inflection from the

electronic fabric upcycle, while the traditional glass fibre roving business provides a stable profit base,

supported by improving industry supply discipline.

EVIDENCE 1) 7628 e-fabric price nearly doubled from the late-2024 trough of around Rmb3.5/m to current

Rmb6.6/m; 2) Toyota loom delivery times stand at 12–18 months; domestic looms cannot meet