Key Takeaways:
KB LAMINATES (01888.HK) surged 18% to a record HKD77.35 on Monday after Citi raised its price target to HKD100, citing better-than-expected profitability in AI glass fiber fabric and a tightening supply of weaving machines.
"The profitability of AI glass fiber fabric exceeded expectations, and its contribution to KB LAMINATES' total gross profit is projected to surge from 6.9% in 2026 to 17.4% in 2028," Citi said in a research report following a site visit to GRACE FABRIC TECH (603256.SH), a leading Chinese AI glass fiber fabric producer.
Citi lifted its 2026-2028 earnings forecasts by 7%, 12% and 16%, respectively, and raised the target price from HKD80 to HKD100, implying a 29% upside from Monday's close. The broker maintained its Buy rating. The stock traded 36.4 million shares worth HKD2.68 billion, with short selling accounting for 19.6% of turnover. KINGBOARD HLDG (00148.HK), the parent company, rose 11.8% to HKD99.85.
The upgrade positions KB LAMINATES as a direct beneficiary of China's AI infrastructure buildout. Citi expects 1H26 revenue to soar 80% year over year to HKD17.3 billion and net profit to jump 297% to HKD3.71 billion, with net profit margin doubling to 21.4%. The company is expected to report 1H26 results in mid-August, with a potential profit alert as early as mid-July. Limited supply of weaving machines is expected to push electronic-grade e-glass fabric average selling prices higher in the second half of 2026, providing further tailwinds.
This article is for informational purposes only and does not constitute investment advice.
