Despite the seeming "commodity-ness" of this industry, Jada may actually have some competitive advantages. They acquired access to a jade mine for 50 years in return for selling its wood-carving business (which is no longer part of the company). As such, the company appears to be able to acquire jade on favourable terms (e.g. Jada is allowed to set the extraction rate, prices cannot rise by more than 10% from contract to contract, etc.).
But this investment is not without risk. Being reliant on one source of supply increases risk, as natural disasters or other unexpected incidents could result in supply disruptions. Furthermore, the company is also reliant on only a few customers, and even in Jada's short history, some of these have already defaulted on previous agreements, causing losses.
Jada's short history brings up another point. Usually, value investors prefer businesses that have been around a while. This helps investors evaluate the company over a period where many of the company's risks could come to light. Unfortunately, in this case the company has only been in this business for two years. Whether management is doing an adequate job at protecting and/or growing shareholder wealth is an open question for now.
Value investors like stocks with strong upside potential and low downside risk. While the upside potential is high here due to the low price to earnings at which this stock trades, the downside risks are also high due to the concentration of suppliers and customers and the lack of operating track record. This stock idea has potential, but investors should tread carefully and understand the risks.