Hallgain股份处置及业务更新影响

Kingboard Holdings (0148.HK)ImplicationofHallgainShareDisposalandBusinessUpdates AccordingtoHKEx,Hallgain,KBH'slargestshareholder,disposedof 67.381mofthecompany'sshareson22-24JuneforanaveragetransactionpriceofHK$132.7/shandatotalconsiderationofUS$1.147bn(Figure1).WethinkthisexplainswhyKBHhassignificantlyunderperformedKBL(by~12%)overthepastthreedays.PerHKEx,onemajorshareholderallocated3OmsharestoaCiTiCCCAsSaccount,whichmaybe sold intothemarket inourview.WeexpectKBHto comeunderpressureintheneartermbutthink the stock weakness shouldpresentagoodbuyingopportunitygivenitslowvaluationof~2xP/Band15xP/E2027E.Onafundamentalbasis,westillpreferKBLoverKBHduetoitsbest-performingsegment. CatalystWatch:Upsideexpires22-JUL-26Price (25Jun2616:10)HK$128.70TargetpriceHK$202.00Expectedsharepricereturn57.0%Expected dividend yield1.9%Expectedtotal return58.8%MarketCapHK$144,373MUS$18,413M UpdateonHallgainownership—Thesharedisposalson22-24June(Figure1)implythat Hallgain's ownership ofKBH has fallen by ~6% to a 37.5% stake from43.5%.Hallgainisprivatelyownedbythefamilyofcompanyfounder,MrCheungKwokWing. +852-2501-2726eric.h.lau@citi.com Alice Cai+852-2501-2704alice.cai@citi.com Secureloomssupplymeansassuredsupplyoflow-DkfabricRecallthatKBL(1888.HK)recentlycommencedoperationsforitsfirstkilnforlowDkgen1andhasnow just kicked off another two kilns: one for gen 1 and another for gen 2.KBL willstart thefourthkiln for T-glass by August,about two months behind plan dueto thelatesupplyof looms.WebelieveKBLhasaddedat least400 loomsthisyearto3.7-3.8kunitsandwill addanother1kto~4.8kunitsnextyear.KBLremainsontracktobuild another eight kilns by early 2027,mainlyfor lowDk gen 2 and T-glass.Theseeight additional kilns require ~700looms for 2027E.Hence,the expectation of 1klooms within the nextyear should sufficiently cover production of Alfabric.If all areexecuted,KBLwill haveannualcapacityof~85mAlfabricoverthenextyear,makingit one of the top players in the field in China. Andy Li+852-2501-2597andy.li@citi.com Update on 96m capacity execution of e-glass fabric-Additionally,KBLhascommenced itsproductionfacilitywith96mannualcapacityofe-glassfabric(mainlyfor7628and1080):seeFigure2fortherecentpricetrend.Themovewillincreaseitsmonthly capacityby~14% (from57mmetersto65mmeters).Mgmt suggested thatthe7628mayfacemoreshortagethanthe1080goingforwardduetothemixupgradebeevenmorethanthatfor1080inthecomingmonths.KBLskewstoward7628,witha7628,2116,and1080splitof~65%,~5-10%,and~25-30%oftotale-glassfabric,respectively. SharewinonPCBoperationduetovertical integrationadvantage-PCBhaslesspricing power than CCL andfiberglassfabric (including e-glass fabric and Alfabric)given industryfragmentation.WithinPCB,Al isone of thefew areaswith stronggrowthmomentumvs non-Alverticals,with auto,homeappliance,smartphone, margin pressure given difficulty in raising AsP.However,this has not been the case, as downstream customers have beenshifting orders toKBH given its abilityto ensure sufficient PCB supplyamid the shortage of CCL/e-glass fabric.We think thisdemonstrateshowKB'svertical integrationcanhelpraisePCBASPtomorethanoffsettheCCLcosthike. and 2028E.We see ample roomforearnings upgrades in 2026-27Egiven the recent acute shortage of e-glass fabric,which Source:Citi Research,Company Reports Kingboard HoldingsValuation OurHKs2O2targetpriceisbasedonaPE-basedsum-of-the-parts(SOTP)valuationmethodology.WeemploySOTPvaluation givenKB's differentbusinesslines,implying~19x2027EPEfor thegroupwhich is+4SDabove itsmean; we believe this isjustifiedbythebusinessupcycleinbothlaminateandPCBbusinesses.InourSOTP,wevaluetheLaminateat29xPE(+3SDforPEpeak over industry mid-cyclewhich is in line with ourTPtarget ofKBL), PCBat 16x PE(about half of regional comps avg forKBwithoutentry intoNVDAchainbutmost regional compsdo)andChemicalat6x(~50%discounttoAsiancomps onaccountof smallerscale).Forvaluingthe Propertysegment,weassumeaverage7%rentalyieldpercurrentreturnforestimatingtheNAvofitsrentalpropertyportfolioandpropertybookvalueofHKs12.2bnin2026E.Ourtargetpricetranslatesinto~19x2027EP/E,whichis+4SDoveritshistoricalmeansince2011(range:4.4xto24.4x).Ourtargetpricetranslates into3x2027Ebookvalue,which is stillwell belowregional comps averageof 7xPB. Risks PcBcontribution,2)slower-than-expectedconsumptionrecoverycoulddragconsumptionofelectronicgoods/bigticketitemsprices. Kingboard Laminates Holdings(1888.HK; HK$104.2;1; 25 Jun 26; 16:10) ValuationOurtarget priceforKBLshares of HK$120isbased ona~29xP/Efor2027E,at3SD overmean,which is even higher than its historicalcyclepeakbetween+1SDand+2SD,toreflectthegrowing%ofitsAl-fabricnewbusinessfrom2H26Ewhichshouldtrigger re-rating along with further earnings upgrade possibility on e-glass fabric given higher run rate of price inflation in June.Weemploy+3SD reflecting recentkickoff ofthreekilns onAl-fabric from2Q26.We think the premium isjustified aswe expecta continued GM expansion cycle during2026E-28E along with potential earnings upgrades given KBL w