UBS has released a research report announcing an upward revision of its target price for KB Laminates (01888) from HK$58 to HK$66, while maintaining a "Buy" rating on the stock. The brokerage has raised its earnings forecasts for the 2026 to 2028 period by 36%, 32%, and 31% respectively, reflecting higher average selling prices for copper clad laminates, accelerated progress in AI glass fabric and HVLP copper foil, and improved gross margins driven by vertical integration advantages.

KB Laminates reported a substantial 209% year-on-year surge in interim profit to HK$2.9 billion, with gross margin reaching 30.7%, expanding by 12.3 percentage points compared to the same period last year and exceeding the firm's expectations by 2.1 percentage points. This outperformance was primarily attributed to cost advantages from vertical integration and higher average selling prices for copper clad laminates and upstream materials. During the period, revenue grew 55% year-on-year to HK$14.9 billion, which came in 7% below the firm's projections, though operating expense control and operating leverage exceeded expectations.

The core copper clad laminate and upstream businesses generated operating profit of HK$3.8 billion in the first half, with the operating margin climbing from 12.3% in the corresponding period last year to 25.9%. Management remains optimistic about the sustainability of the copper clad laminate upcycle and has disclosed that it has already secured 50% of Toyota Industries order commitments for the next two years.