Core Viewpoint - Citi has issued a report highlighting the divergent impact of rising copper prices on corporate earnings, initiating an "Overweight" rating for Kingboard Laminates (01888) and a "Neutral" rating for Delta Electronics (00179) [1] Group 1: Kingboard Laminates - Kingboard Laminates, the world's largest copper-clad laminate manufacturer with a market share of approximately 16%, is expected to pass on rising costs to downstream customers, leading to accelerated profit growth [1] - The core profit growth rate for Kingboard Laminates is projected to increase significantly from a year-on-year growth of 10% in the first half of 2025 to about 58% in the second half, with further growth of 57% anticipated in 2026 [1] - The report notes that the high concentration in the copper-clad laminate industry allows leading companies to leverage their technological and cost advantages to transfer raw material price pressures to their printed circuit board customers [1] Group 2: Delta Electronics - Delta Electronics faces significant cost challenges, with copper accounting for over 25% of its sales costs; despite switching to a "cost-plus" pricing model, the company has limited pricing power in the automotive sector, which constitutes 84% of its sales [2] - If copper prices rise by 10% and Delta Electronics bears half of the cost pressure, its earnings could be impacted by up to 11% [2] - The forecast for the second half of the 2026 fiscal year indicates a year-on-year decline of 7.1% in core earnings for Delta Electronics, contrasting with a growth of 2.8% in the first half [2]
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