Citibank: Raised target price for KB LAMINATES (01888) to HK$120, copper foil prices in June increased more than expected.

Citibank released a research report stating that KB LAMINATES (01888) plans to increase the average selling price of copper-clad laminate (CCL) and prepreg by 15% starting from June 16, higher than the 10% inflation rate for CCL from January to May this year. This move is mainly in response to the larger price increase of electronic glass cloth in June, ranging from 0.70 to 0.95 RMB per meter. Citibank has raised the target price of KB LAMINATES by 20% to 120 Hong Kong dollars (originally 100 Hong Kong dollars) to reflect the positive impact of the price increase, raising the target price-to-earnings ratio from the previous 25 times to 29 times the expected earnings ratio for 2027, and maintaining a "buy" rating. The bank pointed out that the shortage of electronic glass cloth is more significant than expected, possibly due to higher-than-expected demand for artificial intelligence (AI), while demand growth outside of artificial intelligence remains weak, which has had a positive impact on KB LAMINATES. After adjusting the average selling price of CCL, Citibank raised its profit forecasts for KB LAMINATES for the years 2026 to 2028 by approximately 3% per year. The bank also expects KB LAMINATES to announce strong earnings for the first half of 2026 in mid-July, with expected year-on-year revenue and net profit growth of 82% and 303%, reaching 17.5 billion Hong Kong dollars and 3.76 billion Hong Kong dollars, respectively. In addition, the company aims to enter NVIDIA Corporation's (NVDA.US) supply chain starting from 2027.