KINGBOARD group stocks continued their upward trajectory, with KINGBOARD HLDG (00148) and KB LAMINATES (01888) both hitting new all-time highs. At the time of writing, KINGBOARD HLDG rose 4.18% to HK$50.65, while KB LAMINATES increased 3.54% to HK$42.68. Citigroup has raised its profit forecasts for KINGBOARD HLDG for 2026 to 2028 by 50% to 61%, and increased the target price from HK$48 to HK$65. This adjustment is due to shortages in glass fiber, copper foil, and copper-clad laminates (CCL) driven by the AI infrastructure investment boom, prompting the bank to also upgrade its earnings projections for KB LAMINATES. The bank anticipates that KINGBOARD HLDG's profit structure will increasingly tilt towards the laminates business, forecasting its share of the group's net profit to surge from 38% in 2025 to 87% by 2028. Additionally, the bank views KINGBOARD HLDG's current valuation as unreasonable, suggesting that for investors who missed KB LAMINATES' strong rally in April, KINGBOARD HLDG presents a favorable catch-up opportunity. Since April, rising downstream demand and increasing raw material costs have led CCL manufacturers, including KB LAMINATES, to initiate a new round of price hikes. Reports also indicate that supply constraints persist for key upstream materials in the PCB sector, with delivery times for mid-to-high-end CCL extending from the usual two weeks to as long as six weeks, while some overseas suppliers have raised prices for core materials by approximately 30%. Shanxi Securities believes that considering the sustained nature of the current AI-driven super cycle, the industry is expected to remain in a high-growth phase for the next three to five years, thereby creating continued strong demand for high-end CCL. The tight supply-demand balance for CCL is projected to last until 2027 or beyond.
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