KINGBOARD HLDG increased its dividend last year due to outstanding performance, with new projects worth 10 billion yuan gradually coming into production, expecting a significant increase in AI output value

Global copper-clad laminate leader Kingboard Chemical Holdings (148) and Kingboard Laminates (1888) announced impressive annual performance yesterday, with their stock prices rising 2.4% and 3.6% today, closing at HKD 38.66 and HKD 23, respectively. Kingboard Chemical Holdings Chairman Daniel Zhang stated that this year, the demand for artificial intelligence data centers, robotics, and computing power remains strong, with upstream high-value raw materials such as AI electronic glass fiber yarn and AI electronic glass fiber cloth continuing to be in short supply. The group will invest approximately HKD 10 billion to deploy multiple new projects in mainland China, Thailand, and Vietnam, with production expected to commence gradually starting in the second quarter of this year, anticipating a significant increase in AI output value, creating greater value for the company. Last year's basic net profit increased by 207% The group pointed out that high-end fields such as AI developed rapidly last year, with strong demand for related new materials leading to a general increase in unit prices and sales growth for the group's copper-clad laminates and upstream material products. The investment business sector also recorded considerable profits. During the period, the basic net profit recorded HKD 4.98 billion, an increase of 207% year-on-year; revenue recorded HKD 45.38 billion, an increase of 5% year-on-year. In addition, the group has maintained stable dividends to reward shareholders over the years, with the final dividend and special final dividend increasing by 51% year-on-year to HKD 1.51 per share. Regarding Kingboard Laminates, the group continues to enhance the sales proportion of high-end, high value-added products, with product price increases, cost advantages, and quality control in the vertical industry chain showing results, leading to profit growth in the investment business sector. The group expects revenue to rise by 10% year-on-year to HKD 20.4 billion in 2025; basic net profit to increase by 85% to HKD 2.49 billion; and the final dividend and special final dividend to increase by 6% year-on-year to HKD 0.53 per share. Special electronic glass fiber yarn in short supply The group mentioned that in the high-end communication field, especially for applications in 5G and 5.5G, AI servers, and chip packaging, special electronic glass fiber yarn continues to be in short supply. To meet the growing market for high-frequency and high-speed computing power terminals, multiple forward-looking layouts have been established in Guangdong Province, with new or expanded factories under rapid construction, expected to commence production on schedule this year to next year. Among them, the Qingyuan City park added three kilns in the first half of this year to produce low dielectric constant and low expansion coefficient electronic glass fiber yarn, with plans to add eight more kilns for producing low dielectric constant, low expansion coefficient, and quartz electronic glass fiber yarn, bringing the total number of kilns for producing special electronic glass fiber yarn in the park to 12, further enhancing Kingboard's market share of high-end products. Shaoguan Industrial Park project expected to commence production in the third quarter In addition, the Shaoguan City industrial park, covering over 23 hectares, is progressing well, with a project to produce 70,000 tons of electronic glass fiber yarn annually, adjacent to a project producing 96 million meters of electronic glass fiber cloth annually, expected to be completed simultaneously in the second quarter of 2026, with the earliest production starting in the third quarter. By then, the group's total production capacity for electronic glass fiber cloth will increase to approximately 900 million meters per year, effectively alleviating the capacity bottleneck for downstream products. To align with the development direction of one-stop production of AI materials, the group is also rapidly expanding on a 21-hectare site in Kaiping City to increase the production capacity of copper-clad laminates and printed circuit boards. The new copper-clad laminate factory is expected to produce 2.4 million sheets annually, primarily manufacturing high-end boards of M6 grade or above, with the project expected to commence production by mid-2027 The nearby printed circuit board factory, with an annual production capacity of 2.5 million square feet, is expected to be completed in the first half of 2027, primarily producing multilayer printed circuit boards and high-density interconnect (HDI) boards, which are used in the manufacturing of high-end AI products