Finance Association, March 20 (Reporter Chen Kang) -- Glass fiber giant China Jushi (600176.SH)'s revenue and net profit in 2023 fell 26.33% and 53.94% year on year, respectively, and gross sales margin fell 7.6 percentage points year on year. Yang Guoming, general manager of the company that has just taken office, said at the performance conference held this afternoon that the decline in 2023 performance was mainly affected by the decline in product sales prices due to weakening demand, but he also denied the “overcapacity” proposed by investors, saying “judging from now on, the new production capacity of the industry is basically manageable.”

In an investor survey in January of this year, the company proposed “we will fully support full production and sales in 2024.” Yang Guoming said at the performance conference that although the absolute value of industry inventory is still relatively high, the number of inventory days is at a relatively reasonable level. In 2024, the company will achieve its annual business goals through measures such as new product development, product restructuring, and active exploration of domestic and foreign markets.

In terms of the company's production capacity, Yang Guoming responded, “Currently, the domestic production base has a total production capacity of 2.35 million tons (including 960 million meters of electronic cloth production capacity), the Egyptian base has a production capacity of 340,000 tons, and the US base has a production capacity of 96,000 tons. Production lines at Jiujiang and Huai'an bases are scheduled to be put into operation in 2024. The capacity utilization rate is expected to remain at 100%.”

According to the company's latest strategic investment plan, the Tongxiang production base supporting dormitory construction project was terminated, and it is unlikely that the company will expand its glass fiber production base on a large scale in Tongxiang in the future.

China Jushi's product revenue mainly comes from sales of glass fiber yarn and products. In 2023, the company's operating income of glass fiber yarn and products decreased by 14.49%, operating costs increased by 5.94%, and gross margin decreased by 13.97 percentage points.

The company intends to develop “four new” markets in the fields of new energy, new batteries, new energy vehicles, and new materials. Yang Guoming said at the performance conference, “The main applications of thick yarn focus on infrastructure and construction materials, transportation, electronics, industrial equipment, energy and environmental protection. Future emerging application fields include automotive lightweighting, wind power, and photovoltaics. In recent years, the company's expansion in new fields has continued to increase, and its market share has also continued to increase. The penetration rate of the company's electronic cloth products in the fields of advanced communications, computers, consumer electronics, and automotive electronics is also increasing.”

In addition, he also mentioned that Europe is the main market for glass fiber applications in the world, and the company will continue to expand the international market.

It is worth noting that China Jushi continues to sell rhodium powder and other related assets. On the evening of March 20, the company announced that as of 12 months before this announcement, the company and its subsidiaries had completed a total transaction amount of 1,036 million yuan of rhodium powder or platinum rhodium alloy for glass fiber pool kiln drawing production lines, achieving a profit of 747 million yuan.

Some investors asked at the results meeting, “How many kilograms of rhodium powder and platinum-rhodium alloy does the company still hold? What is the current market value in terms of price?” The company responded: “We will continue to sell idle rhodium powder, and the exact quantity sold will depend on the price situation of the precious metal.”