Shares of China Jushi hit the daily trading limit and dropped sharply after announcing a plan to invest approximately CNY2.4 billion (around USD355 million) to scale up its electronic cloth manufacturing for printed circuit boards. The company’s stock closed down 10%, falling to CNY47.71 (about USD7.05) today. The stock skyrocketed over 357% through June 26 this year, reaching a record high of CNY77.20 amid soaring demand, but has since retreated more than 38%.
The company plans to expand its electronic cloth capacity by 250 million meters at its Tongxiang facility, utilizing excess electronic yarn from existing production lines. The project is projected to generate a pre-tax return of 13.3% upon completion in approximately 18 months. The expansion aims to address increasing demand from PCB manufacturers driven by the rapid growth of artificial intelligence computing, supporting the company’s transformation and strengthening its position within the industry.
This marks the second major capacity increase announced within two months. In May, the company revealed a CNY4.4 billion plan to build a new production line at the same site, capable of producing 50,000 tons of electronic yarn and 320 million meters of electronic cloth annually over a 18-month construction period.
Electronic cloth serves as a key raw material for PCBs. The company is the leading supplier in China, with approximately 1.1 billion meters sold last year, capturing a market share estimated between 35% and 40%. Its first electronic cloth factory at Huai’an, completed in March, boasts an annual capacity of 390 million meters of electronic cloth and 100,000 tons of electronic yarn, making it the largest such plant globally.
In mid-June, the firm issued a semiannual forecast, projecting a net profit increase of 65% to 85%, reaching between CNY2.8 billion and CNY3.1 billion for the six months ending June 30 compared to the previous year.