China Jushi 2025 Annual Report Analysis: Non-GAAP Net Profit Increased 94.70% Operating Cash Flow Doubled

Operating Revenue: Driven by Volume and Price Growth, Up 19.08%

In 2025, China Jushi achieved operating revenue of 18.881 billion yuan, a year-on-year increase of 19.08%, mainly due to growth in fiberglass and its products sales volume and prices. Among them, revenue from fiberglass and its products was 18.345 billion yuan, accounting for 99.01% of main business income, up 18.51% year-on-year; wind power generation revenue was 184 million yuan, up 194.61%.

Regionally, domestic revenue was 12.394 billion yuan, up 28.89% year-on-year, accounting for 66.89% of main business income, with the domestic market becoming the core growth driver; overseas revenue was 6.135 billion yuan, up 3.52%, maintaining stability. In terms of sales channels, direct sales revenue was 14.189 billion yuan, up 30.24%, accounting for 76.58%; distributor sales revenue was 4.340 billion yuan, down 6.62%. Product structure adjustments and price increases have driven the proportion of direct sales higher.

Net Profit: Significant Improvement in Profitability

In 2025, net profit attributable to shareholders of the listed company was 3.285 billion yuan, up 34.38% year-on-year; non-recurring net profit was 3.482 billion yuan, a substantial increase of 94.70%, indicating a major improvement in profit quality. The growth rate of non-recurring net profit significantly exceeded that of net profit, mainly because non-recurring gains and losses in 2025 were -196 million yuan, compared to 657 million yuan in 2024, with the impact of asset disposals and other non-recurring items on profit notably reduced.

Earnings Per Share: Synchronized Growth in Profitability Indicators

Basic earnings per share were 0.8213 yuan/share, up 34.49%; non-recurring earnings per share were 0.8704 yuan/share, up 94.85%, consistent with the growth trend of net profit and non-recurring net profit, reflecting a simultaneous increase in the company’s earnings per share.

Expenses: Management Expenses Significantly Increased as Main Variable

Selling Expenses: Steady Growth

Selling expenses increased by 6.23% year-on-year, mainly due to higher transportation and depreciation costs, roughly matching the company’s revenue growth. The expense ratio was 1.12%, down 0.12 percentage points, indicating improved expense control efficiency.

Management Expenses: Doubling Due to Base Effect

Management expenses surged by 116.10% year-on-year, mainly because of the reversal of last year’s excess profit sharing plan, which resulted in a low base. The management expense ratio was 3.93%, up 1.63 percentage points, representing the main increase in expenses.

Financial Expenses: Impact of Exchange and Interest Rate Fluctuations

Financial expenses increased by 45.07%, mainly due to increased foreign exchange losses and decreased interest income, reflecting the company’s exposure to exchange rate risks and changes in funding returns.

R&D Expenses: Continued Investment

R&D expenses grew by 10.25% year-on-year. The company focused on technological innovation in fiberglass and composite materials. In 2025, it obtained 75 authorized invention patents, applied for 21 international invention patents, and participated in formulating 16 national, industry, and group standards, supporting product upgrades and technological leadership.

R&D Personnel: Stable Team Structure

The company’s R&D team consists of 1,386 members, accounting for 9.66% of total staff. The team is mainly composed of young and middle-aged personnel, with 72.60% aged 30-50. The educational structure is primarily bachelor’s degree or above, at 62.78%, providing stable talent support for continuous innovation.

Cash Flow: Operating Cash Flow Doubled; Investment and Financing Cash Flows Negative

Operating Cash Flow: Doubling

Net cash flow from operating activities reached 4.201 billion yuan, a 106.69% increase year-on-year, mainly due to increased cash receipts from sales and maturity of commercial notes, reflecting a significant improvement in core business cash collection and enhanced profitability quality.

Investing Cash Flow: Narrowed Outflow

Net cash flow from investing activities was -839 million yuan, narrowing from -977 million yuan in 2024, mainly due to increased cash received from investment income, indicating improved returns from external investments.

Financing Cash Flow: Larger Outflow

Net cash flow from financing activities was -3 billion yuan, expanding from -1.059 billion yuan in 2024, mainly due to reduced new debt, with a contraction in debt financing and possibly increased cash outflows from dividends and debt repayment.

Potential Risks

2. Policy Risks: Some subsidiaries benefit from high-tech enterprise income tax preferences, western development tax incentives, and multiple government subsidies. Changes in tax policies or reduction of subsidies could impact performance. In November 2024, fiberglass and product export tax rebates were reduced from 13% to 9%, affecting performance, with ongoing risks from future policy adjustments.

3. Financial Risks: The company’s export transactions are mainly settled in USD, so exchange rate fluctuations impact gains/losses and export prices. Large loan scales and interest rate fluctuations affect financial expenses. High proportions of receivables and inventories in current assets pose liquidity risks.

4. Trade Friction Risks: Export of fiberglass products to the US, EU, Turkey, India faces tariffs and anti-dumping duties. Further escalation of international trade tensions could adversely affect overseas sales.

5. Raw Material, Energy Price and Supply Risks: The company consumes large amounts of electricity, natural gas, minerals, and chemicals. Changes in supply and prices of raw materials could impact production and costs.

Senior Management Pre-tax Compensation: Stable Core Leadership

Chairman Liu Yan received no pre-tax compensation during the reporting period, likely from related parties. General Manager Yang Guoming’s pre-tax pay was 304,630 yuan; Vice GMs Cao Guorong, Ding Chengche, and Shen Lin received 2,918,300 yuan, 2,834,300 yuan, and 2,699,500 yuan respectively. The core management’s compensation is reasonable and aligned with company performance growth.

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