Key Takeaways:
KB Laminates (01888.HK) shares surged 9.47% to HKD61.25 on Tuesday, hitting a record high of HKD63.35, after Citi raised its price target to HKD80 from HKD76 and maintained a Buy rating, citing expectations of a strong first-half profit alert in mid-July.
"The company typically issues a positive profit alert about one month before results announcements when earnings record more than 30% year-over-year growth," a Citi research report said. The broker expects KB Laminates to report 1H26 net profit of HKD3.48 billion, a 273% surge from a year earlier, exceeding the full-year 2025 net profit of HKD2.49 billion.
Revenue is forecast to rise 74% year-over-year to HKD16.6 billion, with net profit margin more than doubling to 20.9% from 9.7% in 1H25, according to Citi. The strong operating leverage is driven by a 60% to 95% year-to-date increase in the average selling price of electronic glass fiber cloth, while FR4 copper-clad laminate ASP jumped more than 60% from RMB110 per sheet in 2025 to between RMB180 and RMB190 currently.
Citi raised its earnings forecasts for 2026 through 2028 by 6% to 18%, citing stronger-than-expected inflation in upstream electronic glass fiber cloth prices that is expected to drive another copper-clad laminate price hike by end-June. The broker projects gross margin to enter an upcycle, reaching 33.7% in 2026, 35.6% in 2027 and 37.3% in 2028, exceeding the historical peak of about 34% in 2021.
The stock opened 4.74% higher on Tuesday and traded 37.738 million shares worth HKD2.319 billion. Short selling accounted for HKD546.45 million, or 11.34% of turnover, as of Monday's close.
The earnings momentum signals that KB Laminates is capturing the full benefit of the copper-clad laminate pricing cycle, with 1H26 profit alone set to surpass the entire prior year. Investors will watch for the official profit alert in mid-July and the subsequent interim results for updated margin guidance across product segments.
This article is for informational purposes only and does not constitute investment advice.
