China Jushi's E-fabric Price Increases Continue, Product Mix Upgrade Accelerates

Overview

This report summarizes Citi's latest views following its discussions with China Jushi's management at the 2026 Citi Pan-Asia Conference. Management expects overall stable volume and pricing for rovings in 2026, while e-fabric will continue to see price increases supported by tight supply and resilient downstream demand. The report's core focus shifts from traditional rovings to the premiumization of e-fabric and the rising share of thin/ultra-thin fabric.

Core views

Citi maintains a Buy rating on China Jushi. The roving business is expected to maintain a stable pricing strategy, with 2026 shipment guidance of about 3.4mn tons and net profit per ton of about Rmb900-1,000. For e-fabric, 7628 fabric is priced at about Rmb6.7-6.8/m, with cost below Rmb3/m and unit net profit of about Rmb3+; thin/ultra-thin fabric is priced close to Rmb9/m, with unit net profit of about Rmb5-6. As the Huai'an production lines ramp up, the company's thin/ultra-thin fabric mix is expected to rise from about 15% to above 25%, thereby improving earnings quality.

Analysis framework

The report combines management meeting takeaways, capacity ramp-up progress, price and unit profitability estimates, product mix changes, and an assessment of tariff/anti-dumping impacts to judge China Jushi's future earnings elasticity and valuation re-rating potential.

Methodology notes

• Valuation methodsP/E valuation method

  Deriving the target price based on 2026E net profit and 26.1x PE

  Citi sets the target price at Rmb43.4/share, using a PE multiple about one standard deviation above the historical average, on the view that higher 2026E earnings, continued e-fabric price hikes, and volume growth in specialty e-fabric could drive valuation re-rating.

• Fundamental AnalysisProduct mix upgrade analysis

  Higher share of high-profit thin/ultra-thin fabric

  The report compares the prices and unit net profits of 7628 fabric versus thin/ultra-thin fabric, and believes that migration toward premium PCB and peers' capacity shift toward specialty e-fabric will widen the supply gap for thin fabric, driving China Jushi's product mix upgrade.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• China Jushi 600176.SS

  Direct coverage target

  Strengths

  Tight e-fabric supply and consecutive price hikes; higher profitability for thin/ultra-thin fabric; Huai'an production lines increase the share of premium products; EU anti-dumping outcome came in below market expectations.

  Weaknesses

  Rovings are still affected by industry supply-demand and pricing discipline; the pace of new capacity release may create phased supply pressure; overseas trade policy remains uncertain.

  Comparison

  Compared with traditional 7628 fabric, thin/ultra-thin fabric has higher net profit per meter; compared with the market's expectation of above 20% for EU anti-dumping, the actual 11% final ruling is more favorable.

  Risks

  Fiberglass demand falls short of expectations, energy/electricity costs rise, new industry capacity exceeds expectations, or e-fabric price hikes and product upgrades fall short of expectations.

Key data

• Monthly e-fabric price increaseRmb0.3-0.5/米Prices continued to rise in April-May amid tight supply.
• 7628 e-fabric priceRmb6.7-6.8/米Cost is below Rmb3/m, with unit net profit of about Rmb3+.
• Thin/ultra-thin fabric price接近Rmb9/米Unit net profit is about Rmb5-6.
• Company target for thin/ultra-thin fabric mix25%以上The company-level mix is expected to rise after both new Huai'an lines are fully operational.
• 2026 roving production guidance约340万吨About 3.1mn tons in 2025; ramp-up of new capacity is skewed toward 2H.
• Net profit per ton of rovingsRmb900-1,000/吨Management expects stable volume and pricing for rovings.
• Exports as a share of revenue35-40%China direct exports and overseas-base supply each account for roughly half.
• EU final anti-dumping ruling11%Below the market expectation of above 20%; combined total tax rate is about 24% after the original anti-subsidy duty.
• 2026-2027 capex guidanceRmb4-5bnFor expansion in rovings, e-fabric, electronic yarn, overseas bases, etc.

Impact & implications

Rising e-fabric prices and a higher share of high-margin thin/ultra-thin fabric are expected to shift China Jushi's earnings drivers from stable roving-cycle dynamics toward structural upgrading in electronic materials. If the premiumization trend in PCB continues and peers' supply shifts toward specialty fabric, widening the thin-fabric gap, the company may achieve higher unit profitability and valuation re-rating. The lower-than-expected EU anti-dumping ruling also reduces export-side uncertainty.

Risks

• Demand for fiberglass products is weaker than expected.
• Energy or electricity costs rise.
• New industry capacity comes in above expectations, weakening prices and margins.
• The pace of downstream PCB premiumization for e-fabric is slower than expected.
• Changes in EU and other overseas trade policies create export uncertainty.

What to watch

• Whether monthly e-fabric price hikes can continue, and changes in the price spread between 7628 fabric and thin/ultra-thin fabric.
• The progress of Huai'an e-fabric Phase-2, which is expected to start production in Aug-Sep 2026.
• Whether the company's thin/ultra-thin fabric mix can rise to above 25%.
• Customer qualification and sampling progress for specialty e-fabrics such as low-CTE products.
• 2026 roving shipments, price stability, and inventory changes.
• The actual effectiveness of passing EU anti-dumping costs on to customers.
• The implementation details of the equity incentive plan and the 15th Five-Year Plan.