Kingboard Laminates rebounds as e-glass fabric prices continue to rise

Overview

This report focuses on Kingboard Laminates Holdings’ (1888.HK) share rebound, earnings sensitivity and valuation rationale against the backdrop of tight e-glass fabric and AI-related copper foil supply-demand. It notes that the company’s core e-glass fabric series continued to rise into the Easter holiday period versus end-March, leading the market to re-rate its AI PCB upstream materials exposure.

Core views

The core views are: first, KBL’s e-glass fabric ASPs have increased markedly year to date, with notable hikes in the 1080, 2116 and 7628 series; second, high-end glass fiber fabric and AI-related copper foil remain tight, and through capacity expansion and product upgrades the company is expected to win more AI supply-chain customers; third, e-glass fabric already contributed substantial profit in 2025, and if prices and demand persist, there is room for gross margin expansion and earnings upgrades in 2026-2027E; fourth, the HK$30 target reflects valuation multiples above historical averages to capture the sector upcycle.

Analysis framework

The report uses an event-driven and fundamental framework: first explaining the post-placing price dip and subsequent rebound trigger, then tracking ASP movements across e-glass fabric series, AI-related materials supply-demand gaps, capacity build plans and potential customer expansion, and finally deriving the target price using a P/E valuation framework.

Methodology notes

• Valuation methodologyP/E valuation method

  Derive a HK$30 target price from about 25x 2026E P/E

  Citi believes about 25x 2026E P/E sits about +2 SD above the historical average, reflecting the imminent sector upcycle and expected gross margin expansion in 2026-2027E. The target price corresponds to roughly 4-5x 2026E book value.

• Industry supply-demand analysisUpstream materials shortage framework

  Shortage of e-glass fabric and AI-related copper foil

  Using evidence such as higher glass fiber fabric ASPs, suppliers shifting toward low-Dk AI-related products, and HVLP copper foil processing fees materially above standard copper foil, the report judges KBL to benefit from AI PCB upstream materials tightness.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Kingboard Laminates Holdings (1888.HK)

  Core covered name

  Strengths

  Benefits from sustained e-glass fabric ASP increases, AI-related copper foil shortages, capacity expansion, and potential expansion of AI supply-chain customers; e-glass fabric profits were already up more than 70% year-on-year in 2025.

  Weaknesses

  Valuation already reflects a high premium for the sector upcycle, with the target price corresponding to about 25x 2026E P/E and about 4-5x 2026E book value.

  Comparison

  Grace Fabric (603256.SS) and CPIC (301526.SS), both with AI-fabric exposure, rose about 10% and 16% respectively on the same day, showing synchronized re-rating of similar material names.

  Risks

  AI-related glass fiber fabric and copper foil demand may not meet expectations, prices may weaken, capacity ramp-up or customer onboarding may lag, and macro and end-demand in electronics may slow.

• Grace Fabric (603256.SS)

  Comparable AI-fabric exposure company

  Strengths

  The report notes it has AI-fabric exposure and rose about 10% on the report date.

  Weaknesses

  The excerpt does not provide detailed fundamentals or earnings forecasts.

  Comparison

  Similarly affected by glass fiber fabric and AI materials sentiment as KBL.

  Risks

  Comparable upstream materials demand or price volatility risk.

• Chongqing Polycomp International Corp (301526.SZ / 301526.SS)

  Comparable glass fiber materials company

  Strengths

  The report notes AI-fabric-related exposure and a roughly 16% rise on the report date.

  Weaknesses

  The excerpt does not provide detailed fundamentals or earnings forecasts.

  Comparison

  Along with KBL and Grace Fabric, it reflects market focus on the glass fiber fabric price transmission chain.

  Risks

  Material price pullback and AI-related demand falling short of expectations.

Key data

• YTD increase in 7628 series ASP+40% to Rmb6.4/mThe report says KBL’s 7628 series ASP is up 40% year-to-date.
• YTD increase in 2116 series ASP+57% to Rmb7.6/mThe report says KBL’s 2116 series ASP is up 57% year-to-date.
• YTD increase in 1080 series ASP+58% to Rmb7.9/mThe report also notes that the 1080 series rose about 80% year-on-year to Rmb7.9/m by early April.
• 2025 e-glass fabric profit contributionMore than HK$600m, up over 70% year-on-yearAccounts for about 19% of KBL’s prior-year pre-tax profit.
• 2026E capital expenditureMore than HK$3bnHigher than HK$1bn+ in 2025, mainly for new glass fiber fabric and AI-related copper foil capacity.
• High-end glass fiber fabric capacity target6k tons of yarn by end-2026A significant increase from 500 tons in 2025, covering high-end materials such as low-Dk, low-CTE and Q-glass.
• AI-related copper foil planned capacity21k tons/yearPrimarily for HVLP Grade 4 and low-signal-loss RTF, expected to come online by mid-2027.
• New e-glass fabric capacity70k tons of yarn/year, or 960 million meters/yearExpected to start in the second half of 2026.
• Target priceHK$30Based on about 25x 2026E P/E.

Impact & implications

If e-glass fabric and AI-related copper foil shortages persist, KBL may benefit simultaneously from ASP upside, product mix upgrades, and customer expansion. The report says the company has already supplied AI-fabric to EMC and Panasonic and may obtain additional customers such as Doosan, Shengyi and TUC as capacity ramps. For investment implications, higher material prices and entry into the AI supply chain could support earnings upgrades and valuation premium, but the stock has already bounced and appears more attractive to buy on a pullback.

Risks

• Demand for AI-related products for upstream materials such as glass fiber fabric and copper foil may be higher or lower than expected, which could push the share price above or below the target.
• China’s macro growth may be stronger or weaker than expected.
• China’s stimulus policy may be stronger or weaker than expected.
• Recovery or weakness in end-demand for electronics products.
• The pace of capacity release for high-end glass fiber fabric, AI-related copper foil and e-glass fabric may be slower than expected.
• Uncertainty remains around entry into NVDA and ASIC supply chains and around onboarding new customers.

What to watch

• Whether ASPs for the e-glass fabric 1080, 2116 and 7628 series continue to rise.
• The expansion progress in 2026 for high-end glass fiber fabric, e-glass fabric and AI-related copper foil.
• Whether KBL can enter the NVDA and ASIC-related supply chains.
• Customer expansion progress at firms such as Doosan, Shengyi and TUC beyond EMC and Panasonic.
• Any follow-up updates likely to be released after the April 28 AI CCL / PCB factory visit.
• Whether the processing fee gap between standard copper foil and HVLP-grade copper foil is sustained.