Growth expectations delivered, intensive increases in holdings by major shareholderscould the pricing logic for KB LAMINATES (01888) change after overshooting?

Title context: Growth expectations delivered, intensive increases in holdings by major shareholderscould the pricing logic for KB LAMINATES (01888) change after overshooting? Text: Amid a strong boost from AI demand and the combined drive of price increases in traditional copper-clad laminates/PCBs, GMTEight noted that several copper-clad laminate/PCB companies in the capital market have recently disclosed third-quarter reports with core financial data exceeding expectations. It is said that performance is the best touchstone. The industry's prosperity continues to trend upward, and a glimpse of one spot reveals the whole picture; leading companies within it are naturally even more worthy of attention. KB LAMINATES (01888), as a global leading copper-clad panel company, did not directly disclose third-quarter results, but referring to data from comparable peers and the fact that KB LAMINATES' profit in July this year reached HK$1.1 billion, setting a new single-month high since the group's records began, it can be expected that the company's second-half performance is also highly likely to extend the strong performance of the first half. Data shows that in the first half of this year, KB LAMINATES' revenue and net profit reached HK$14.904 billion and HK$2.887 billion, respectively, surging 55% and 209% year-on-year. In addition to strong fundamental support, KB LAMINATES has recently also seen intensive increases in holdings by major shareholders and senior executives; at the same time, it is worth noting that HKEX will add 12 new stock option classes on the 9th of this month, and the underlying shares in the new classes include KB LAMINATES. Against the backdrop of performance delivery, intensive increases in holdings by major shareholders, and further enrichment of investment tools, how KB LAMINATES' share price will move going forward is also an issue worthy of investors' continued attention. Industry prosperity verified againis 26H2 performance promising? For a long time in the past, the PCB industry was regarded as a "supporting link" tied to the consumer electronics cycle, with prosperity rises and falls mostly following the replacement rhythm of end devices such as mobile phones and PCs. However, in the past two years, as AI-related demand has continued to heat up, scenarios such as computing infrastructure, AI servers, and high-speed switches have accelerated volume growth, driving the PCB industry to upgrade toward high-end directions such as high-frequency high-speed, high-layer-count, and high-order HDI, and the industry's positioning has thereby changed. Reflected in the data, according to brokerage statistics, A-share listed PCB companies achieved revenue of RMB332.46 billion in the first three quarters of 2026, up 45% year-on-year; net profit attributable to parent companies was RMB45.832 billion, up 108% year-on-year. Looking upstream along the PCB chain, copper-clad laminate is one of the core materials used in the manufacture of printed circuit boards. It is made by impregnating reinforcing materials such as wood pulp paper or glass fiber cloth with resin liquid and then hot-pressing them with copper foil. It mainly serves PCB functions of interconnection and conduction, insulation, and support, and decisively affects transmission speed, energy loss, and characteristic impedance in PCB products. In other words, the high-frequency high-speed upgrade of PCBs first requires copper-clad laminates to complete synchronous iteration in resin systems, glass fiber cloth specifications, and copper foil performance. Therefore, the prosperity and profit elasticity of the upstream materials segment may even be reflected in financial statements earlier than those of downstream board makers. KB LAMINATES is positioned at a key point in this transmission chain. According to the company's interim report, in the first half of the year KB LAMINATES' copper-clad laminate business achieved revenue of HK$14.775 billion, up 56% year-on-year, with shipments up 14% year-on-year and average monthly shipments exceeding 10 million sheets; the electronic glass fiber yarn and cloth business recorded a profit of approximately HK$1 billion, up approximately 280% year-on-year. After entering the second half, growth momentum has still not paused, with single-month profit in July of approximately HK$1.1 billion, setting a record single-month high. Supply constraints at the industry level are an important factor behind KB LAMINATES' repeated step-ups in performance. It is understood that in the third quarter, the shortage of electronic glass fiber cloth supply became more severe, and prices of copper-clad laminates and their upstream materials, including electronic glass fiber yarn, electronic glass fiber cloth, and copper foil, continued to soar. At the same time, as the wave of AI industrialization advances in depth, the tight supply-demand pattern in the copper-clad laminate industry is becoming increasingly difficult to ease. This is indeed the case. Just last month, KB LAMINATES issued its latest round of price increase notices. The document showed: "Due to strong market demand for thin cloth, supply of upstream glass cloth and glass yarn is tight, and prices have risen sharply. Therefore, effective immediately upon order acceptance, our company will raise the selling prices of laminates and PP (prepreg) using 2116 (inclusive) and thinner thin cloth as production raw materials by 15%." It is reported that this is already the eighth price increase notice issued by KB LAMINATES during the year. At the current stage, risk-aversion sentiment dominatescould the stock price overshoot hide new opportunities? However, the heat of eight consecutive price increases on the industrial side has not formed a synchronous resonance in the secondary market. After accumulating huge gains earlier, risk-aversion sentiment began to dominate the market, and KB LAMINATES' share price rhythm has shown a significant divergence from its strong fundamentals. Looking at the candlestick chart, KB LAMINATES reached a high of HK$107.2 during the year, with maximum gains once exceeding 700%, then quickly fell back to around HK$26, and is currently trading around HK$33, with a significant retracement from the intra-year high. In my view, what previously drove KB LAMINATES' valuation was the superposition of three logics: AI computing demand, the recovery of the copper-clad laminate cycle, and Hong Kong stock market re-rating of leading Chinese manufacturing companies. Therefore, the share price increase at that time far exceeded the performance increase. With the short-term share price overshooting, under the dominance of risk-aversion psychology, the valuation froth in KB LAMINATES has been substantially squeezed out, and the company's pricing logic in the next stage may also change. First, look at the micro-level movements on the funding side. I noted that since late August, KB LAMINATES has seen intensive increases in holdings by major shareholders and senior executives. Core shareholders including Hallgain Management Limited, KINGBOARD HLDG (Kingboard Holdings Limited), and Jamplan (BVI) Limited have acted multiple times, with single increases often amounting to hundreds of thousands of shares; during the same period, senior executives including Chairman Cheung Kwok Wa and Executive Director Cheung Kwok Ping also increased their holdings. In the capital market, industrial capital often has deeper insight into a company's true operating fundamentals. Intensive buying by major shareholders and senior executives during a valuation pullback not only conveys to the market recognition of the company's long-term intrinsic value, but also objectively provides a certain "value anchor" for the current share price, which may imply that the earlier one-sided sharp decline driven by emotional selling is nearing its end. In addition, further enrichment of trading tools may also provide the market with new response measures. It is reported that HKEX will add 12 weekly and monthly stock option classes on the 9th of this month, and KB LAMINATES (KBL) is among them. According to the introduction, the new stock options launched this time will simultaneously provide weekly and monthly expiry contracts from the first trading day, further expanding investor choices and allowing market participants to select the most suitable expiry contracts according to their trading and risk management needs. In recent years, stock options have become one of the fastest-growing derivative products at HKEX. In the first nine months of 2026, average daily volume reached 899,056 contracts, up 1.4% year-on-year and setting a record high for the period. Together with this addition, HKEX weekly stock options will cover 66 listed companies and ETFs. For KB LAMINATES, which is in a high-volatility state, the launch of KBL options means the market has more diversified hedging and strategy expression tools. Overall, KB LAMINATES is currently in a mismatch period between high fundamental prosperity and a deep share price correction. The current share price overshoot has to some extent eliminated the market's previously overly optimistic premium, while intensive increases in holdings by industrial capital have indirectly delineated a reference line for the margin of safety. Coupled with the enrichment of supporting tools such as KBL options, the market's pricing of KB LAMINATES is expected to become more multidimensional and efficient. Looking ahead, against the multiple backgrounds of performance delivery, valuation falling back toward a reasonable range, and further improvement of investment tools, whether KB LAMINATES' share price trend will usher in a new inflection point will remain under GMTEight's continued attention.