Summary of Conference Call on CCL Supply Chain and Related Companies Industry Overview - The conference call focused on the Copper-Clad Laminate (CCL) industry, particularly in relation to AI infrastructure and electric vehicles (NEV) applications. [1][2] Key Companies Discussed - **Grace Fabric (603256.SS)**: Largest manufacturer of ultra-thin glass fabric in China, serving as an upstream material for M6-M9 CCL used in high-speed PCBs. [1] - **Shengyi Technology (SYTECH)**: Notable for its strong performance in AI-related CCL manufacturing, with a projected earnings growth of 52.8% year-over-year for 1H25. [2] - **Kingboard Laminates Holdings (KBL)**: Expected to see slower growth compared to SYTECH, with a forecasted revenue growth of 16% for 1H25. [3] Core Insights - **AI and NEV Driving Growth**: The CCL industry is expected to experience a growth cycle driven by AI infrastructure and NEV applications, with AI-related CCL projected to account for over 10% of total capacity in 2025, up from low single digits in 2024. [2] - **Performance Dispersion**: There is an anticipated dispersion in performance across the CCL cycle, with AI-infra CCL expected to show the strongest momentum, followed by NEV applications. Other sectors like home appliances and smartphones are expected to recover modestly due to macroeconomic softness. [1][2] - **Grace Fabric's Competitive Edge**: Grace Fabric claims to be the only Chinese manufacturer capable of producing low Dk-2 fabric, which is currently in short supply. This positions them favorably against global competitors like Nittobo. [5] - **Revenue Projections**: Grace Fabric anticipates record-high revenue of RMB 1.2 billion in 2025, with a net margin of over 20%. [6] Financial Highlights - **SYTECH's Financial Performance**: SYTECH reported a significant increase in earnings due to higher average selling prices (ASP) and gross margin expansion, primarily from AI-CCL contributions. [2] - **KBL's Financial Outlook**: KBL's revenue is projected to reach HK$10 billion for 1H25, with core earnings expected to grow by 19% year-over-year. However, KBL's growth is limited due to minimal exposure to AI. [3] - **Market Preferences**: Analysts prefer SYTECH over KBL and KBH based on higher AI exposure and growth potential. [3] Additional Insights - **Technological Barriers**: The shift towards AI applications has raised technological barriers in the CCL industry, creating a competitive moat for companies that can adapt to these new requirements. [7] - **Customer Base**: Grace Fabric's top customers include major players in the CCL market, such as Unimicron and EMC, indicating a strong market position. [5] Risks and Considerations - **Market Risks**: Potential risks include slower-than-expected recovery in consumer electronics, lower GDP growth in China, and fluctuations in oil prices that could impact demand. [19][24] - **KBL's Stock Pressure**: KBL may face stock pressure due to reduced shareholding by KBH aimed at lowering net gearing. [3] This summary encapsulates the key points discussed during the conference call, highlighting the dynamics within the CCL industry and the performance outlook for the involved companies.

Investment Rating - The report does not explicitly provide an investment rating for the industry or specific companies within it Core Insights - NEV-PV battery installations increased by 11.2% week-over-week to 11.9 GWh, with a month-to-date increase of 14.5% and a year-to-date increase of 37.3% year-over-year [1] - CATL outperformed in market share, gaining 0.5 percentage points month-to-date, while BYD lost 4 percentage points in the same period [1][3] - Lithium-carbonate prices decreased by 2.7% week-over-week to Rmb 60,400 per ton, reflecting a 9.4% decline month-over-month [1] Summary by Sections Battery Installations - NEV-PV battery installations for the week of May 26 to June 1 reached 11.9 GWh, marking a 29.9% increase month-over-month and a 37.3% increase year-over-year [1][3] - Year-to-date installations for BEV and PHEV increased by 47.3% and 30.6% respectively [1] Market Share Dynamics - CATL's market share rose to 49.1%, while BYD's share fell to 33.6% [3] - CATL's installation growth was 15.8% year-to-date, compared to BYD's 2.5% [3] Cost Trends - LFP cell costs decreased to Rmb 245.2 per kWh, down 1.3% month-over-month and 9.3% year-over-year [2][8] - NCM cell costs fell to Rmb 351.9 per kWh, reflecting a 0.8% month-over-month and 10% year-over-year decline [2][8] - The gross profit margin for LFP cells improved to 15.9%, while NCM cells reached 17.2% [2][8]