The allure of economic cycles lies in their unpredictability—no one can foresee just how high market forces will propel a company's growth.

More often than not, it is through navigating these cycles that companies achieve greater stability and expand their reach.

Over the past few years, the new energy wave and the AI boom have reshaped valuation paradigms for high-end manufacturing firms. Against this transformative backdrop, these companies have seized historic opportunities. For instance, during the current AI cycle, optical module leaders such as Zhongji Innolight and Ysstech have experienced meteoric rises, becoming market sensations.

It's worth noting that as the AI industry cycle matures, it will fundamentally reshape global manufacturing landscapes. An increasing number of intelligent manufacturing companies stand to benefit, with the PCB sector serving as a prime example.

Historically, the PCB industry has operated as a standard cyclical sector, closely tied to consumer electronics. The previous consumer electronics boom spanned from 2014 to 2020.

However, the current AI industry boom has created entirely new incremental demand for PCBs.

Reports indicate that with AI's sustained development, AI servers now demand higher standards for data processing speed, signal transmission quality, and system integration. This directly drives PCB products to evolve toward high-layer, high-density interconnect, and other advanced directions. Fueled by these technological iterations, market demand for high-end PCB products has surged. Leading PCB companies like Shengyi Technology, Shennan Circuits, Wus Printed Circuit, and Zhen Ding Technology have fully capitalized on this trend.

The PCB industry's boom has also directly propelled strong gains in the upstream Copper Clad Laminate (CCL) sector. Since late November last year, Kingboard Laminates—a leading CCL company—has seen its stock surge over 700%, with its market value increasing by more than HK$220 billion.

Data reveals that the Cheung Kwok Wing family, through Kingboard Group, directly or indirectly holds approximately 66.95% of Kingboard Laminates' shares. Based on this, the market value of their stake has appreciated by roughly HK$147.3 billion in just six months.

Price Hikes, One After Another

Benefiting from the AI industry boom, massive AI infrastructure construction has spurred new demand for Copper Clad Laminates (CCL).

Goldman Sachs previously noted that AI-related applications, such as servers and switching equipment, have driven sustained growth in CCL usage. Combined with rising raw material costs like copper and glass fabric, CCL prices officially entered an upward trajectory starting in the fourth quarter of 2025.

Kingboard Laminates' performance fully validates this industry trend.

According to its 2025 financial report, the company achieved HK$20.4 billion in annual revenue, up 10% year-on-year. Net profit attributable to shareholders reached HK$2.442 billion, marking a substantial 84% year-on-year increase, with basic earnings per share at HK$0.78. Revenue from its core CCL business hit HK$20.225 billion, up 10.5% year-on-year.

Regarding this significant growth, Kingboard Laminates attributed it to robust demand for upstream raw materials like electronic glass fiber yarn and glass fabric, enabling the company to achieve both volume and price increases for its related products.

Furthermore, amid rising PCB demand driven by this AI super cycle, Kingboard Laminates has implemented multiple rounds of product price hikes.

Public information shows that on May 27, Kingboard Laminates issued another price increase notice to customers: a 10% hike for base materials and a 20% increase for PP (prepreg). The notice explicitly cited recent sustained high copper prices, synchronized increases in core base material glass fabric for CCL, and tightening market supply as factors driving significant production cost surges. The company could no longer maintain its original pricing through internal cost absorption.

Notably, this marked Kingboard Laminates' fourth price increase in 2026, with cumulative product price hikes exceeding 40%. Previously, the company completed three rounds of price adjustments on March 10, April 3, and April 28, each with a 10% increase.

Guojin Securities analysis suggests that the current CCL price surge is primarily driven by two factors: single-board upgrades and category expansion. CCL materials have advanced from M7/M8 grades to M9, paired with HVLP4/5 copper foil and quartz fabric. Product layer counts have increased from 20-30 layers to 44 layers, with Rubin Ultra platform orthogonal backplanes reaching 78 layers—significantly elevating both process difficulty and product value.

Market sources indicate that NVIDIA and its key clients are once again intervening in upstream material supply coordination to ensure mass production and shipment schedules for next-generation AI servers, avoiding supply chain disruptions impacting capacity release. With sustained AI infrastructure demand expansion, the high-end PCB supply chain faces renewed upstream bottlenecks. Following T-glass glass fabric, HVLP4 copper foil has become the most critical supply constraint in the second half of 2026, with market estimates projecting a 1,500-ton supply-demand gap for the year, widening to 2,500 tons in 2027.

Huaxi Securities points out that sustained strong demand for AI computing power is driving accelerated technological iterations in PCB upstream copper foil. Meanwhile, due to high technical barriers and process complexity in high-end copper foil production, coupled with post-processing equipment capacity constraints, the industry faces short-term insufficient capacity release. This supply-demand mismatch for high-end products like HVLP continues to drive price increases.

Buoyed by multiple favorable factors, the market has significantly raised performance expectations for Kingboard Laminates. Its stock price has surged 533% year-to-date, reaching a historic high. As of the latest close, Kingboard Laminates' total market value has climbed to HK$252.7 billion.

In response to Kingboard Laminates' strong market performance, Citi released a research report raising its 2026-2028 earnings forecasts by 7% to 16% and increasing its target price from HK$80 to HK$100. The bank cited the AI glass fabric business's profitability exceeding market expectations. Over the past four months, Citi has repeatedly raised its target price from HK$20.5, with the company's stock price surging more than fivefold year-to-date. Citi believes that significant price increases for electronic glass fabric and CCL are the core drivers behind the company's sustained earnings improvements and growth expectations.

After in-depth discussions with Honghe Electronic Materials—a domestic leader in AI glass fabric—Citi learned that due to limited loom equipment supply, average prices for electronic glass fabric will continue rising in the second half of 2026. Moreover, the overall profitability of AI glass fabric significantly exceeds previous market expectations, with both trends continuing to benefit Kingboard Laminates.

The Destination of Cycles

Public information shows that Cheung Kwok Wing serves as the core leader of both Kingboard Group and Kingboard Laminates.

Due to his strategic布局 (strategic layout) being deeply tied to the copper industrial chain, Cheung Kwok Wing is also known as the "Copper Foil Magnate" in the market.

As widely recognized, copper foil accounts for 30% to 50% of CCL production costs, and industry profitability hinges heavily on raw material price fluctuations, typically featuring thin overall profits and weak earnings stability. Building on this, Cheung Kwok Wing established a vertically integrated development model: extending upstream by building factories to produce copper foil and expanding downstream into printed circuit board (PCB) production and sales to capture higher value-added profits across the industrial chain.

After 38 years of deep cultivation and development, Kingboard Group's industrial footprint has continued expanding. The group currently operates over 60 production facilities globally and owns two Hong Kong-listed companies: Kingboard Group and Kingboard Laminates. More critically, Kingboard not only maintains its leading global position in the CCL industry but is also a domestically leading manufacturer of printed circuit boards and a core supplier of chemical products.

Of course, since the company's core products all rely on copper as a primary raw material, its performance exhibits strong cyclicality: during industry cycle peaks, corporate profitability fully releases, with both revenue and profits rising; during industry cycle troughs, operational pressures become inevitable.

The previous industry cycle peak occurred in 2020. Benefiting from high consumer electronics industry sentiment, Kingboard Laminates completed five CCL price adjustments throughout the year, with cumulative product price increases nearing 100%. Annual sales volume reached approximately 130 million square meters, with a global market share of about 16%, ranking first globally for multiple consecutive years.

Kingboard Laminates stated in its 2020 financial report that the group accurately seized industry recovery opportunities, achieving significant order volume growth.

However, from 2022 to 2023, global consumer electronics market demand sharply contracted, directly dragging down PCB industry order demand and subsequently impacting Copper Clad Laminates (CCL)—a core PCB raw material. Data shows that from May 2021 to early 2024, Kingboard Laminates' stock price plummeted by over 75%, with its market value bottoming out at around HK$10 billion.

In this current AI industry transformation, the rapid development of the computing power industry is driving continuous technological upgrades in AI PCBs, with explosive demand for high-layer boards, HDI, and other high-end PCB products. Mainstream PCB manufacturers are currently increasing capital expenditures to fully expand high-end capacity for HDI and high-layer boards, directly driving sustained price increases for Copper Clad Laminates (CCL).

According to industry insiders, NVIDIA is continuously increasing procurement pressure on major U.S. cloud service providers to ensure computing power equipment supply. Meanwhile, leading CCL suppliers have initiated a rare quota supply mechanism, requiring IC substrate and PCB manufacturers to take delivery strictly based on actual production usage—further highlighting the scarcity of upstream high-end materials.

Citi's latest research report points out that the demand logic for PCBs in AI servers has shifted from mere quantity growth to comprehensive upgrades in high-end materials. Current industry supply bottlenecks have shifted from PCB production to upstream Copper Clad Laminates (CCL) and even further upstream to electronic glass fabric. Citi judges that the pace of capacity release across the industrial chain will be fastest for PCBs, followed by CCL, and slowest for electronic fabric. However, pricing power works in reverse; the further upstream the industrial chain extends, the greater the product price elasticity and profit margins.

Kanjian Finance believes that Kingboard Laminates' current stock price gains have fully priced in the performance expectations brought by this round of CCL price hikes. Subsequently, as the company's performance gradually materializes, its valuation will gradually return to rational levels. However, from a long-term perspective, the dual industrial waves of new energy and AI are reshaping the valuation system of high-end manufacturing, with leading high-quality companies in the sector continuing to enjoy certain valuation premiums and growth dividends.