Citigroup has issued a research report stating that KB LAMINATES (ASX: 01888) plans to increase the average selling price for its copper-clad laminates (CCL) and prepreg by 15% starting June 16. This price hike is larger than the 10% inflation rate for CCL observed from January to May this year. The move is primarily in response to a more substantial increase in the price of electronic glass fabric, which has risen by RMB 0.70 to 0.95 per meter in June. Citigroup has raised its target price for KB LAMINATES by 20% to HK$120, up from HK$100 previously, to reflect the positive impact of the price increases. The target price-to-earnings ratio has also been adjusted upward from 25 times previously to 29 times the expected 2027 P/E, while maintaining a "Buy" rating.

The report notes that the shortage of electronic glass fabric is more pronounced than anticipated, likely due to higher-than-expected demand from artificial intelligence (AI). Meanwhile, demand growth outside of AI remains weak, which is viewed as a positive factor for KB LAMINATES.

Following the revision of its CCL average selling price assumptions, Citigroup has raised its profit forecasts for KB LAMINATES for each year from 2026 to 2028 by approximately 3% annually. The firm 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-over-year, respectively, reaching HK$17.5 billion and HK$3.76 billion. Furthermore, the company aims to enter NVIDIA's (NVDA) supply chain with its CCL products starting from 2027.