Citi Backs KB Laminates With HKD43 Target After 10% Price Hike

Citigroup reiterated a Buy rating on KB Laminates (01888.HK), setting a HKD43 price target after the company raised prices by 10 percent.

The bank's report noted the price increase for copper clad laminates (CCL) is a direct response to a severe shortage of upstream glass fiber and rising copper prices.

KB Laminates increased its CCL average selling price to approximately RMB170 per sheet. Citi's HKD43 target price implies a price-to-earnings ratio of 19 times for the next year, reflecting confidence in the company's ability to pass on costs.

Despite the positive analyst action, shares of KB Laminates fell 7.5 percent, suggesting market concern over margin pressure. The company plans an RMB8 billion syndicated loan to refinance debt and fund new M6-grade production facilities.

The price increase demonstrates KB Laminates' pricing power in a tight supply chain environment. Investors will watch for the execution of its RMB8 billion loan and the development of new high-specification production lines as the next major catalysts.

This article is for informational purposes only and does not constitute investment advice.