Core Viewpoint - Evergrande Securities predicts that the net profit attributable to the parent company of Kingboard Laminates (01888) will reach HKD 2.17 billion, HKD 3.95 billion, and HKD 4.84 billion from 2025 to 2027, representing year-on-year growth of 64%, 82%, and 22% respectively. The company's stock price of HKD 18.78 corresponds to a PE ratio of 27x, 15x, and 12x for 2025-2027, which is lower than the average PE valuation of comparable companies. The company is a leading manufacturer of copper-clad laminates with a vertically integrated supply chain, excelling in cost control and supply chain stability. The report highlights the company's potential for valuation improvement and rarity as an investment target, initiating coverage with a "Buy" rating [1]. Group 1: Company Overview - Kingboard Laminates is a global leader in the copper-clad laminate manufacturing industry with a vertically integrated supply chain. The company was established in Shenzhen in 1988 and began producing paper-based copper-clad laminates in 1989. After its independent listing on the Hong Kong Stock Exchange in 2006, it has maintained a market share of over 20 years, ranking first in the global copper-clad laminate industry [1]. - The company has over 60 factories globally, primarily located in South China and East China, and is expanding into Southeast Asia. It focuses on producing various types of copper-clad laminates, copper foil, resin, and fiberglass yarn [1]. Group 2: Market Demand and Growth - The demand for copper-clad laminates is driven by the robust growth of the PCB industry, which is expected to reach a total value of USD 94.66 billion by 2029, with a compound annual growth rate (CAGR) of 5.2% from 2024 to 2029. The rapid development of AI servers is anticipated to significantly increase the demand for high-end PCB products, thereby boosting the need for high-frequency and high-speed copper-clad laminates [2]. - In 2024, Kingboard Laminates is projected to hold a 14.4% market share in the global copper-clad laminate market, ranking first among competitors. The company offers economical products like paper-based copper-clad laminates to meet the low-cost demands of consumer electronics, while its FR-4 series epoxy glass fiber laminates serve as the core revenue and profit source in mainstream markets [3]. Group 3: Pricing Power and Cost Management - The company possesses strong bargaining power and cost transmission capabilities, with less than 30% of sales coming from its top five customers. Approximately 78% of its revenue is derived from non-related third-party markets, enhancing its pricing power. The current tight supply in the copper-clad laminate industry, combined with rising copper prices, is expected to drive both prices and profitability upward [4]. Group 4: Strategic Expansion - Kingboard Laminates is strategically expanding its upstream raw material production, including a new factory in Guangdong for low-dielectric fiberglass yarn, which is expected to alleviate capacity bottlenecks. The company has also fully launched a new copper foil production capacity of 1,500 tons per month in Guangdong, responding to the increasing demand from data centers and cloud computing. This vertical integration helps mitigate risks associated with raw material price fluctuations and opens up growth opportunities in high-value low-dielectric fiberglass yarn [5].

Core Viewpoint - The company reported a revenue of 940 million yuan for 2024, marking a year-on-year increase of 25.93%, and a net profit attributable to shareholders of 82.64 million yuan, up 3.44% year-on-year. A cash dividend of 3 yuan per 10 shares is proposed for distribution to all shareholders [1][2]. Revenue Breakdown - The pressure sensor segment drove growth, achieving a revenue of 468 million yuan, a 32.17% increase, making it the largest revenue source at 49.8% of total revenue. The company has become a leading domestic player in the import substitution of automotive-grade pressure sensors [1]. - Revenue from thermistors and temperature sensors reached 369 million yuan, with a 2.7% increase, particularly in the automotive sector [1]. - Oxygen sensors and others generated revenue of 17.76 million yuan, with the company becoming the first in China to secure a position in the automotive pre-installation market for oxygen sensors, marking a significant milestone [1]. Profitability and Cash Flow - The company's overall gross margin was 32.24%, up 0.42 percentage points year-on-year. However, the increase in management and R&D expense ratios, along with asset impairment losses of 11.58 million yuan and credit impairment losses of 15.21 million yuan, contributed to profit growth lagging behind revenue growth [1]. - The net cash flow from operating activities was 90.23 million yuan, indicating strong profit quality [2]. Technological Advancements - The company leverages mature technology platforms in sensitive ceramic and MEMS technologies, and is actively developing integrated circuit design and R&D, forming a strong competitive edge in the vertical industry chain of materials, IC chips, and sensor modules [2]. - The development of humanoid robots presents new growth opportunities for force sensors, with ongoing collaboration on MEMS-based force sensors for robotic applications [2]. Future Projections - Revenue projections for 2025 to 2027 are estimated at 1.176 billion yuan, 1.439 billion yuan, and 1.688 billion yuan, respectively, with net profits expected to be 114 million yuan, 152 million yuan, and 183 million yuan, leading to corresponding EPS of 1.16 yuan, 1.54 yuan, and 1.86 yuan [2].