Morgan Stanley: China Jushi — Asia-Pacific Non-Executive Director Meeting: Key Takeaways

Morgan Stanley relays key takeaways from a non-executive director meeting with China Jushi. Management sees bottlenecks in both electronic-yarn and weaving capacity and in process capability. Jushi expects no new yarn capacity before early 2028 and only limited electronic-yarn additions in 2027. Electronic cloth supply remains tight across grades, with inventory at about three days versus roughly one month normally; the company is raising prices monthly and expects tightness to persist into 1Q2028. The early firing of the Huai'an line was intended to temper price increases but has had minimal effect. Because fiberglass cloth is a small share of end-product costs, the report sees further pricing headroom; despite soft consumer electronics, CCL/PCB expansion, AI infrastructure and broader digitalization/electrification keep lifting total demand.

On weaving, Jushi operates about 5,000 looms, expects no new deliveries in 2026 and roughly 890 additions by end-2027; Toyota loom deliveries stay constrained through 2027, while domestic equipment is generally unsuitable for electronic-grade cloth - thin cloth yields about 50% of 7628-grade output and specialty cloth about 50% of thin, consuming extra capacity. Consensus-methodology EPS is Rmb1.85/2.95/3.33 for 2026e-2028e (Refinitiv: Rmb1.67/2.39/3.02), with revenue rising from Rmb18.881bn in 2025 to Rmb36.315bn in 2028e. Low-Dk G1 may begin sales by end-2026; it, Low-CTE and Q-glass remain in downstream qualification. Greater China materials is rated Attractive.