基于预期强劲2026年第一季度业绩上调目标价至202港元

Kingboard Holdings (0148.HK) HK$202 OurfrequentearningsupgradeonKBL(62%-ownedsubsidiarybyKBH)are primarily due to greater-than-expected ASP assumptions on CCL and e-glassfabricwhichmorethanoffsetthereductionofKBHownershipfallingto62%(was67%)onKBLafterrecent shareplacement.Consequently,weupgradeourKBHearningsestimatesby16-28%for2026-28EandS0TP-TPtoHKs202fromHK$90toreflecttheearningsupgradeandapplyingalowerholdingdiscountto20%fromprevious45-50%discount.WeanticipateKBHwouldstructurallyevolveintoanalmostpureplayofPCB&CCLintheAlerasobothsegmentswouldaccountfor87%oftotal2028Enetprofitfrom63%in2025.Weopena30DCWon1)expectationofissuingstrong1H26profitalertinJuly,2)forecastofnetprofitgrowthofstrong56%in1H26Eandofacceleratinggrowthat175%in2H26E.Buyonupcomingcatalysts. Preview of 1H26 results-WeexpectKBH will likely issue1H26Eprofit alert in nextmonthfortheresults dueinmid-to-end Aug.Fig1exhibitsthe1H26Enet profit wouldclimb56%yoytoHK$4.0bnwithrevgrowthof33%toHK$28.7bn.Thestronggrowthdrivers are 1) expectation of KBL net profit surge of 3Xyoywhich is the largestcontributortoKBHthisyear,2)PCBoperationshowingEBITmarginexpansionthankstosharewinarisingfromverticalintegrationieassuringdeliveryforsecuringupstreamCCLgivencurrentshortageofCCL,3)chemicalEBITmarginexpansionresultingfromoil price surgein2Q26amidUS-lran conflict.Noteweproject EBITmarginoflaminatewould widelyexpand to28.7%in2026Efrom12.7% in2025,PCBoperationto15.1%from13.3%andchemicaloperationto9.7%from8.7%.ImplicationofKBHaftertheplacementofKBL-KBHplacedout155msharesof KBLforconsiderationofUS$1.55bnon16JunwhichwouldthenreduceownershipofKBLfrom67%to62%.Thenetgearingwouldthereforefall from28% in2025to15%in2026E inourmodel.This impliesKBHwould increasecashper share ofHKs10.6per each.Theplacement enablesKBHtopartlyfinanceannual capex ofHK$6bn+ pa during 2026-27for6major projects.See Fig4for details. KBHtoevolve intoanalmostpurePCB/CCLplayfrom2026E-In lightofcurrentshortage of e-glass fabric and Al-fabric, this would boost up the EBIT margin oflaminatesegmentsignificantlyto28.7%in2026Efrom12.7%in2025. (...continuedbelow) Eric Lau AC+852-2501-2726eric.h.lau@citi.com Alice Cai+852-2501-2704alice.cai@citi.com Andy Li+852-2501-2597andy.li@citi.com laminatesegmenttototalnetprofitwouldsubstantiallyincreaseto61%in2026Eandfurtherto72%in2028Ecomparedwith39%in2025.Inadditiontototalnetprofitwouldnotablysurgeto85%in2028Efrom63%in2025.SeeFig3. lowerpricingpowerthanCCLandfiberglassfabric(includinge-glassfabricandAl-fabric)formoreindustryfragmented.WithinPCBbattle,Alisoneofthefewwithstronggrowthmomentumagainstthenon-Alverticalslikeauto,homeappliance,smartphone,PC/notebook,telecomsequipmentremainingmuted.SotherewasmarketconcernsthatthePCBoperationofKBHmaysufferfrommarginpressurefromdifficultyinraisingAsP.HoweverthishasnotbeenthecaseasdownstreamcustomershavebeenshiftingordertoKBHgivenitsabilitytoensuresufficientPCBsupplyamidtheshortageofCCL/e-glassfabric.ThisdemonstratesthestrengthofKBvertical integrationtoraisetheASPonPCBtomorethanoffsettheCCLcosthike. ChemicaloperationwouldshowEBiTmarginexpansionforoilpricesurge-Historically,theEBiTmarginofchemicaloperationhasapositivecorrelationwithoil price cycle ie highoil price would translate into higher EBiT margin of thechemicalsegment.AtthebackdropofoilpricesurgingoverUss1oO/barrelformostoftimeinMar-May,webelievethissegmentmayreportapositivesurpriseforgreater-than-expectedEBiTmarginexpansion.Therecentslippageofoilpriceafter easingUS-lran conflictmay drag down EBIT margin in2H26Ethan 1H26E.Thephase1ofcausticsodaandECHprojectinBeihaiwill likelykickofffrom2H26E(showninFig4)whichmaycontribute~6%of2025totalrevenueiffull-yearcontribution.Theprojectwouldoffsetthepossibleretreat ofoil price. exhibitthecomparisonofregionalCCL&PCBcompsonforwardPEandforwardPB.Forinstance,KBH(largestprofitcontributionfromlaminate)tradingat15xPEand1.8xPEfor2027whicharewell belowregionalCCLcompsoftherange22x-79xonPEand3.1x-17.8xonPBterms. 2026 Citigroup Inc.No redistribution without Citigroup's written permission.Source:CitiResearch,CompanyReports Source:CitiResearch,CompanyReports Source:Citi Research,CompanyReports @2026CitigroupInc.NoredistributionwithoutCitigroup'swrittenpermission.Note:Bloombergconsensusestimatesusedfornon-coveredcompaniesSource:CitiResearch,CompanyReports,Bloomberg @2026CitigroupInc.Noredistributionwithout Citigroup'swrittenpermission.Note:Bloombergconsensusestimatesusedfornon-coveredcompaniesSource:Citi Research,CompanyReports,Bloomberg @2026 Citigroup Inc.No redistribution without Citigroup's written permissNote:Bloombergconsensusestimatesusedfornon-coveredcompaniesSource:CitiResearch,CompanyReports,Bloomberg @2026 Citigroup Inc.No redistributionwithout Citigroup'swritten permission.Note:Bloombergconsensusestimatesusedfornon-coveredcompaniesSource:Citi Research,CompanyReports,Bloomberg HK$184.1;1;18Jun26;16:10)IDongshanPrecision(002384.SZ;Rmb273.0;1;18Jun26;15:00)/Do0san(000150.KS;W1631000.0;1;19Jun26;15:45)/EliteMaterial(238