Citi: China Jushi’s electronic-fabric price hikes continue; volume growth in 2027 remains constrained by supply-side factors

How long can tight supply and demand for electronic fabric sustain price increases?

Management estimates that in 2027, industry electronic-fabric supply will grow by around 5%–6%, while current annual output is slightly above 4 billion meters. The previously observed gap between orders and supply of 30%–40% may have included duplicate orders; management believes the actual shortfall remains around 20%, with thin fabric particularly tight. AI servers, automotive electronics and industrial automation support demand; industry and company inventories are low, and output has been allocated to customers.
In November, China Jushi raised prices for standard electronic fabric by 1.5 yuan per meter and for thin fabric by around 2 yuan per meter; 7628 fabric was close to 15 yuan per meter, while thin fabric was around 20 yuan per meter. Management believes that if tight supply continues, price increases may still be possible in the first quarter of 2027, but December prices have not yet been determined, and further increases are also subject to downstream copper-clad laminate price pass-through.

Management expects the company’s electronic-fabric sales volume to rise from more than 1.1 billion meters in 2026 to around 1.3 billion meters in 2027, and further to around 1.6 billion–1.7 billion meters in 2028. Citi notes that the increase in 2027 will mainly come from the full-year contribution of the 100 thousand-ton electronic-yarn line in Huai’an after it reaches full capacity in July 2026. Another electronic-fabric capacity of around 320 million meters is scheduled to start up at the end of 2027, with meaningful output expected only in 2028.
Further fabric expansion also depends on whether looms and electronic yarn can keep pace. The company expects to take delivery of around 900–1000 additional looms in 2027, but management cautions that electronic yarn could become scarce as industry looms gradually come online. The company plans to retain surplus electronic yarn for its own use and gradually consume it as loom capacity ramps up over 2027–2028.

First-generation Low-Dk products and T-cloth are expected to begin contributing revenue in the first quarter of 2027, but the company’s initial estimate for full-year specialty electronic-fabric sales is only several million meters. Some products have production capacity of around 300 thousand meters per month, but actual shipments still depend on customer qualification and orders. In the near term, they therefore look more like the starting point for a product-mix upgrade than a major source of volume growth.
Thin fabric accounted for slightly more than 20% of the company’s output in 2026, and management expects its share to rise by only a few percentage points in 2027. Second-generation Low-Dk is still at the sample-testing stage, and demand for Q-cloth has not yet ramped up noticeably.

Citi expects earnings growth in 2027 to be driven mainly by higher sales volumes and prices for standard electronic fabric, while specialty electronic fabric offers scope for a medium- to long-term improvement in the product mix. Citi maintains its Buy rating and a target price of 71 yuan, valuing the company at 17.3 times forecast 2027 P/E, in line with its historical average.
This earnings outlook depends both on tight supply and demand supporting prices and on downstream customers being able to absorb price increases. Citi’s main downside risks include weaker-than-expected fiberglass demand, rising energy and power costs, and industry capacity additions exceeding expectations. Better supply discipline and stronger-than-expected demand would help support margins.