Citi raised the target price for Kingboard Laminates to HKD 28, exceeding earnings expectations

Citi published a research report indicating that Kingboard Laminates (01888.HK) released a positive profit forecast for last year, expecting net profit to grow by over 80% year-on-year to more than HKD 2.39 billion, surpassing the bank's forecast of HKD 2.14 billion. As a result, the bank has raised its earnings forecasts for Kingboard Laminates for 2025, 2026, and 2027 by 8%, 6%, and 8% respectively, and increased the target price from HKD 20.5 to HKD 28.

The bank believes that the key catalysts for Kingboard Laminates include: 1) the expectation that the average selling price will further increase in the first half of this year to catch up with recent copper cost inflation; 2) after the 2025 earnings announcement, management will provide more positive information regarding the development of AI glass fabric.

The stock has risen over 50% year-to-date, and Citi believes this should largely reflect the factors of the positive profit forecast. The bank stated that if the stock price corrects, it would be a better buying opportunity, and prefers Kingboard Laminates over Kingboard Group (00148.HK)