Everbright Securities: Kingboard Laminates (01888) Full-Year Performance Shows Significant Year-over-Year Growth, Profit Elasticity Logic Continues to Strengthen

Everbright Securities released a research report stating that in 2025, Jintao’s laminated board (01888) will achieve revenue of HKD 20.4 billion, up 10.0% year-on-year; gross profit of HKD 3.991 billion, up 21.7%, with a gross profit margin of 19.6%, an increase of 1.9 percentage points year-on-year; net profit of HKD 2.442 billion, up 83.6%, with a net profit margin of 12.0%, an increase of 4.8 percentage points year-on-year.

Given the company’s profit elasticity improvement during the cost increase cycle, copper-clad laminate products are expected to continue raising prices to boost profits, and high-end electronic fabrics may open growth opportunities. Everbright Securities has raised its forecast for attributable net profit in 2026-27 by 28%/26% to HKD 5.07 billion / HKD 6.08 billion, and added a forecast for attributable net profit in 2028 of HKD 6.71 billion. Based on the closing prices on March 16, this corresponds to PE ratios of 14x/11x/10x, maintaining a “Buy” rating.

Everbright Securities pointed out that in 2025, the company’s revenue from copper-clad panels/property/investment will be HKD 20.225 billion / HKD 78 million / HKD 97 million, respectively, representing a 10.5%/ -38.7%/ -11.4% year-on-year change. Benefiting from strong demand for copper-clad panels and upstream raw materials (electronic glass fiber yarn, glass fiber cloth, and copper foil), the company’s products in 2025 achieved both volume and price increases compared to 2024, with profits from electronic glass fiber yarn and glass fiber cloth exceeding HKD 600 million, up 70% year-on-year. Additionally, the company’s 2025 performance announcement states, “Currently, many copper-clad panel companies are affected by the lack of electronic fabric, causing electronic fabric prices to continue rising.” Everbright Securities expects profits for electronic glass fiber yarn and cloth to significantly increase in 2026.

Recently, leading domestic and international companies in the copper-clad laminate (CCL) industry have announced price hikes: Resonac and Mitsubishi Gas Chemical both announced increases in the prices of CCL and related products. On March 10, Jintao Group issued a price increase notice, effective immediately, raising prices for all thicknesses and specifications of substrates, PP (semi-cured sheets), and copper foil processing fees by 10%. Everbright Securities pointed out that since 2025, CCL manufacturers represented by Jintao Laminates have undergone multiple rounds of price increases, mainly due to soaring prices and tight supply of chemicals like epoxy resin and TBBA, continuous rises in electronic fabric prices, and high copper prices, leading to increased raw material and processing costs for copper-clad laminates.

Additionally, Jintao Laminates has strong supply chain stability and cost control capabilities, and the “profit elasticity release” logic is gradually being realized. The company has built a complete vertically integrated industry chain, producing core raw materials such as glass fiber yarn, glass fiber cloth, and copper foil in-house. Coupled with the bargaining power brought by dispersed downstream customers, this gives the company strong supply chain stability and cost control ability.

According to the company’s 2025 performance announcement, the group will add three new kilns with an annual capacity of 500 tons each in the first half of 2026 to produce second-generation low-dielectric constant and low-expansion glass fiber yarn. In the second half of 2026, the annual capacity of 70,000 tons of electronic glass fiber yarn and 96 million meters of electronic glass fiber cloth in Shaoguan, Guangdong, is expected to come into production. Everbright Securities believes that the company’s supply chain advantages support continuous and smooth price increases, which are expected to further boost profit margins.