Ac t i o n | 23 Feb 2026 11:49:32 ET │ 16 pages Kingboard Laminates Holdings (1888.HK) Raise TP to HK$28 Post Positive Profit Alert CITI'S TAKE KBL released a positive 2025 net profit alert with growth of >80% yoy to >HK$2.39bn, which beat our forecast of HK$2.14bn. As such, we raise our earnings forecasts by 8%/6%/8% for 2025/26/27E, respectively, and TP to HK$28 (from HK$20.50) at +3SD over mean, which is the peak multiple over historical cycle. Key catalysts for KBL are 1) expectation of further ASP rise ...

Summary of Kingboard Laminates Holdings (1888.HK) Conference Call Company Overview - **Company**: Kingboard Laminates Holdings (KBL) - **Industry**: Printed Circuit Board (PCB) Laminates - **Market Position**: KBL has a ~17% global market share in rigid laminates and over 30% in the PRC [15][16] Key Financial Projections - **Earnings Forecast**: - 2H25 earnings expected to double to HK$1.209 billion year-over-year - Core earnings projected to rise 58% to HK$1.155 billion [1][14] - **Earnings Growth**: - 1H25 earnings growth was 28% and 10% respectively [1] - **Gross Margin**: Expected to expand to over 20% in 2H25, compared to 18.4% in 1H25 [2] Pricing and Market Dynamics - **Average Selling Price (ASP) Inflation**: - KBL has raised ASP by 4 times in 4Q, with increases of 3-5% in October, ~10% in November, and ~10% in December [2] - **Copper Costs Correlation**: - KBL stock has a high correlation (60%+) with copper costs, which are at record highs [10] - **Concerns**: - Recent stock decline (~8%) attributed to concerns over CCL price inflation not keeping pace with copper costs and Nanya Plastic's missed 4Q25 results [1][11] Supply Chain and Certification - **NVDA Supply Chain**: - KBL is in the process of certification for low Dk gen 1 and gen 2 materials for potential entry into NVDA's supply chain, expected to be completed by 1Q26 [3][14] - **Production Capacity**: - Plans to build an additional 1,500 tons of low Dk gen 1/gen 2 by 1Q26 and another 3,000 tons by end-2026 [9] Investment Strategy and Valuation - **Recommendation**: - KBL shares rated as Buy with a target price of HK$20.50, implying a potential return of 64.5% [4][17] - **Valuation Methodology**: - Target price based on a P/E of 19-20x for 2026E, reflecting peak P/E during the upcoming industry upcycle [17] Risks and Considerations - **Risks**: - Customer certification delays, macroeconomic growth in China, and demand recovery for electronic goods could impact performance [18][21] - **Market Conditions**: - The economic slowdown in China has affected discretionary consumption items, which account for over 80% of KBL's total sales [16] Conclusion - Kingboard Laminates Holdings is positioned for significant earnings growth in the upcoming periods, driven by ASP inflation and potential entry into the NVDA supply chain. However, the company faces risks related to macroeconomic conditions and certification timelines. The investment outlook remains positive with a strong buy recommendation based on projected earnings recovery and market positioning.