Morgan Stanley released a research report indicating that based on feedback from KB Laminates (01888) at China's BEST conference, capacity expansion for both printed circuit board (PCB) fiberglass cloth and copper foil is constrained by equipment supply limitations. The company anticipates that the fiberglass cloth shortage will persist through 2027, presenting strong pricing power potential; the bank has assigned KB Laminates an "Overweight" rating with a target price of HK$75.

The bank noted that KB Laminates expects to add 450 to 500 Toyota looms in 2026, followed by approximately 1,100 additional units in 2027 (roughly 100 per month). High-end HVLP copper foil surface treatment equipment is primarily sourced from Mitsufune, with current delivery times ranging from 9 to 12 months; for lower-grade copper foil products, the company may consider sourcing equipment from local suppliers.

In September, price increases for thin E-glass (1080) were greater than those for thick E-glass (7628), whereas in August, the magnitude of price hikes was broadly similar between the two. The bank indicated that KB Laminates expects to add four new specialty fiberglass cloth production lines (LDK1/2/CTE) starting mid-2026, with two additional new lines by year-end; specialty fiberglass cloth has already passed certification from six new CCL customers. HVLP1/2/3 copper foil has passed customer certification, and the company is currently testing HVLP4. In terms of gross margins, LDK1 is approximately 40%, LDK2 around 50%, and low-CTE exceeds 50%.