Citigroup has issued a research report stating that KB LAMINATES (SEHK: 01888) plans to increase the average selling price for its copper-clad laminates (CCL) and prepreg by 15% starting June 16. This increase surpasses the 10% price inflation seen for CCL from January to May this year.

The move is primarily in response to a more substantial price hike for electronic glass fabric in June, which rose by RMB 0.70 to 0.95 per meter. Citigroup has raised its target price for KB LAMINATES by 20% to HK$120, up from HK$100, to reflect the positive impact of these price increases.

The target price-to-earnings ratio has been adjusted from 25 times to 29 times the expected 2027 P/E, with a "Buy" rating maintained. The bank noted that the shortage of electronic glass fabric is more pronounced than anticipated, likely due to higher-than-expected demand from artificial intelligence (AI).

Demand growth outside of AI remains weak, which is viewed as a positive factor for KB LAMINATES. Following the upward revision of its CCL average selling price assumptions, Citigroup has increased its profit forecasts for KB LAMINATES for the years 2026 through 2028 by approximately 3% annually.

The bank also anticipates that KB LAMINATES will issue a strong positive profit alert for the first half of 2026 in mid-July. It expects first-half revenue and net profit to surge by 82% and 303% year-on-year, respectively, reaching HK$17.5 billion and HK$3.76 billion.

Furthermore, the company aims for its CCL products to enter the supply chain of NVIDIA (NVDA.US) starting from 2027.