China Jushi: Expanding electronic-grade glass fabric capacity to over 2 billion meters, with profitability hinging on premium products and supply bottlenecks
Original source：Citi ResearchFirst published on Unhidea：Original source date：
Key takeaway
Citi believes the upside potential for China Jushi’s electronic-grade glass fabric earnings comes mainly from better prices and product mix, while the longer weaving time required for high-end products makes it difficult to translate nominal capacity expansion into an equivalent increase in effective supply.
Why does management expect this electronic-grade glass fabric upcycle to last longer?
China Jushi’s management expects price increases and the duration of the current electronic-grade glass fabric upcycle to exceed those of historical cycles lasting 4–5 years, driven by accelerating AI demand and the widening range of printed circuit board (PCB) applications.
Forecasts cited by management show compound annual growth rates of 148% and 161%, respectively, for the global AI server PCB and copper-clad laminate (CCL) markets over 2026–2028. These are growth rates for downstream markets; Jushi’s ability to benefit also depends on the electronic-grade glass fabric specifications required and the pace of deliveries.
Demand also extends to standard electronic-grade glass fabric: mixed-material designs for AI servers, automotive electronics and energy storage provide incremental demand, although consumer electronics demand remains weak. Downstream customer Shengyi Technology’s capacity investment plan of nearly 20 billion yuan supports increased purchases of electronic-grade glass fabric as it expands capacity and upgrades specifications.
Why could supply remain tight even as capacity increases?
High-end electronic-grade glass fabric is constrained by both looms and weaving time. Production depends heavily on Japanese looms, whose supply is limited and whose order backlogs are long; complex fabrics for AI applications require more weaving time than standard products. Management says output efficiency could be reduced by a factor of 2–3, thereby absorbing existing capacity.
The shift from standard fabric to thinner specifications also adds to weaving constraints. Upstream electronic-grade glass yarn is constrained by rising precious-metal costs, technical barriers and the diversion of some capacity to specialty yarn; some new supply may be delayed until the fourth quarter of 2027.
Citi therefore identifies specification upgrades and tight effective supply as the drivers of earnings. However, industry capacity additions above expectations would weaken that support, making the pace at which expanded capacity comes online a key variable.
How far has Jushi progressed in its move upmarket?
In the first three quarters of 2026, Jushi sold 856 million meters of electronic-grade glass fabric, up 9.9% year on year; annual capacity for 1080 and thinner specifications had exceeded 120 million meters. The company has increased both sales volume and the supply of thin products.
New products are at different stages: ultrathin 106 fabric is being supplied commercially to strategic customers, 1037 fabric has passed key-customer certification, and production process development for 1027 fabric has been completed; low-dielectric-constant products remain at the trial production and customer certification stage.
By 2030, the company targets electronic-grade glass fabric capacity of over 2 billion meters and a high-end product share of over 35%, with at least two-thirds of new electronic-grade glass fabric capacity allocated to thinner and higher-end specifications. Citi believes this shift in mix could raise average selling prices, but will also constrain growth in effective output.
What improvements are already reflected in the 71 yuan target price?
Citi maintains its Buy rating and a target price of 71 yuan per share, based on a 2027 forward price-to-earnings multiple of 17.3 times, in line with the historical average. Its 2027 earnings forecast already includes significant gains from higher electronic-grade glass fabric prices and an improved product mix; the target price does not rely solely on a higher valuation multiple.
Citi believes Jushi’s global cost advantage and integrated electronic-grade glass yarn and fabric platform support its ability to benefit from this upcycle; the structural opportunity to expand specialty electronic-grade glass fabric has not yet been fully reflected in its valuation. Conversely, weaker-than-expected demand, rising energy and electricity costs, or greater-than-expected capacity expansion would all narrow the scope for earnings improvement.
