Damo: Target price of HK$75 for “increase in holdings” rating for pre-construction of Taotao laminate (01888)

The Zhitong Finance App learned that Morgan Stanley released a research report saying that Jiantao Laminate (01888)'s feedback at the China BEST Conference indicates that the increase in production capacity of printed circuit board (PCB) glass fiber cloth and copper foil is limited by equipment supply. The company expects the shortage of fiberglass cloth to continue until 2027, and there is good potential for price increases; the bank gave Jiantao Laminate an “increase” rating, with a target price of HK$75.

According to the bank, Jiantao Laminate expects to add 450 to 500 Toyota looms in 2026, and an additional 1,100 units in 2027 (about 100 units per month). High-end HVLP copper foil surface treatment equipment is mainly purchased from Sanship, and the delivery period is currently about 9 to 12 months; lower-grade copper foil products may consider purchasing equipment from local suppliers. In September, the price increase of thin E-glass (1080) was greater than that of thick E-glass (7628), while in August, the price increase of the two was roughly similar.

According to the bank, Jiantao Laminated Board expects to add 4 new special glass fiber cloth (LDK1/2/CTE) production lines from mid-2026, and 2 more new lines by the end of the year; the special glass fiber cloth has passed the certification of 6 new CCL customers. HVLP1/2/3 copper foil has passed customer certification, and HVLP4 is being tested. In terms of gross margin, LDK1 is about 40%, LDK2 is about 50%, and the low CTE is over 50%.