Shares of CNBM (03323) are up nearly 3%. At the time of writing, the stock has gained 2.33% to HK$5.27, with a turnover of HK$1.15 billion.
According to industry data, the price of 7628 electronic fabric rose in June to between RMB 7.3 and RMB 7.5 per meter, marking an increase of over 70% since the beginning of the year. Notably, this represents the fifth round of price increases for electronic fabric this year.
Analysts at Orient Securities believe the supply-demand dynamics for electronic fabric remain tight, with medium and high-end products such as D and E series fine yarns and fabrics being in short supply. The ongoing adjustment in product mix has further reduced the availability of traditional electronic yarn and fabric, continuously optimizing the supply-demand landscape. There is an expectation for further price increases for electronic fabric in the future, highlighting the potential earnings elasticity from these price hikes.
It is reported that CNBM's subsidiary, China Jushi, is the world's largest producer of electronic fabric (electronic-grade glass fiber fabric), currently holding approximately 23% of the global electronic glass fiber market with an annual production capacity of around 1.3 billion meters of electronic fabric.
CMB International Securities previously noted that demand for AI-related electronic fabric is growing rapidly, while the release of high-end supply is constrained, leading to a persistent structural supply gap. On the demand side, the upgrade in demand for electronic yarn/fabric is primarily driven by the dual forces of AI computing power and high-frequency communication. On the supply side, a key bottleneck for high-end electronic fabric is the lengthy delivery cycle of 18 to 24 months for advanced weaving machines, which is difficult to overcome in the short term, meaning the shortage of high-end electronic fabric is expected to continue.
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