KB LAMINATES (01888) fell more than 5%, declining 4.87% to HK$43.02 by the time of writing, with a turnover of HK$380 million.
On the evening of May 13, China Jushi Co.,Ltd. (600176.SH) announced that its wholly-owned subsidiary, Jushi Group Huaian Co., Ltd., plans to initiate a project to build production lines for 50,000 tons of electronic yarn and 320 million meters of electronic fabric annually. The total planned investment for the project is approximately 4.431 billion yuan. The move aims to further enhance profitability and international competitiveness while promoting the high-quality development of the company's glass fiber business.
Analysts at Citi noted that given KB LAMINATES' share price has surged 256% year-to-date, news of China Jushi's capacity expansion could negatively impact short-term market sentiment towards KB LAMINATES. However, the bank believes any potential share price pullback would present a favorable buying opportunity, as supply bottlenecks in the electronic fabric industry remain constrained by the slow growth in the number of weaving looms.
Citi also forecasts that KB LAMINATES' own monthly electronic fabric production capacity will increase by approximately 14% to 65 million meters by the end of 2026. Considering the limitations on loom supply, industry capacity growth is expected to remain limited over the next two years.
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