KB LAMINATES (01888) rose more than 8% in Hong Kong trading. At the time of writing, the stock was up 8.59%, reaching HK$15.9, with a turnover of HK$311 million.

The increase follows a report from Citigroup which stated that commodity prices have risen significantly and appear to be consolidating at higher levels. The bank analyzed the impact of this trend on various sectors in mainland China. Positively, the basic materials industry is a primary beneficiary, particularly suppliers of aluminum, copper, and lithium.

Citigroup believes that rising copper prices will also lead to an expansion in the gross profit margins for copper-clad laminate (CCL) producers like KB LAMINATES. The bank had previously indicated that KB LAMINATES' core profit growth is expected to accelerate significantly during the copper price upcycle. Its growth rate is projected to jump from 10% year-on-year in the first half of 2025 to approximately 58% in the second half, followed by a further 57% growth in 2026. This forecast does not yet include the potential contribution from the company's AI glass fiber business.

Citigroup also noted that due to the high concentration within the CCL industry, leading companies, with their technological and cost advantages, are capable of passing on increased raw material costs to their downstream printed circuit board customers.