BOE Technology Group Draws 238 Institutional Visits, Glass Substrate Business in Focus

Krungsri Securities Public Company Limited has maintained its Buy rating on KCE Electronics Public Company Limited, or KCE, and raised its target price to 97 baht from 68 baht, citing higher earnings estimates and a positive view of the product price-increase cycle. The research team said KCE, as a major manufacturer of printed circuit boards, or PCB, for the automotive industry, is entering an upcycle in product pricing after raw material costs, especially copper, continued to rise. The company plans to raise PCB selling prices by about 9-10% in line with higher raw material costs, and there is evidence supporting the possibility that KCE will raise PCB selling prices again in October 2026, with the additional October price increase now included in the estimates, compared with earlier expectations of increases in July and January 2027. The research team therefore raised its profit estimates for KCE in 2026 and 2027 by 5% and 28% respectively, expecting 2027 profit to grow about 82% from 2026, which is expected to grow around 77%, driven by higher revenue and gross margin expansion. KCE also has a cost advantage over competitors because it owns its laminate production facilities. These estimates do not yet include revenue from Tesla, which, if it materialises as planned, would be additional upside to future estimates.

BOE held an online briefing on its 2026 half-year results on September 22 during the Global Innovation Partner Conference 2026. First-half revenue exceeded 100 billion yuan, reaching 103.1 billion yuan, with net profit attributable to the parent of 5.2 billion yuan, up 1.8 percent and 61.6 percent year on year respectively. Chairman Chen Yanshun said at the meeting that the company has updated its corporate positioning to a globally leading technology innovation company, using optoelectronic fusion technology to drive the intelligent connection of all things. In the display business, shipments of LCD panels in the five mainstream applications continued to rank first globally, while AMOLED shipments exceeded 80 million units, maintaining first place in China and second globally. China's first 8.6-generation OLED production line began mass production in June 2026. In the innovation business, the glass-based packaging substrate pilot line has achieved fully automated equipment line connection and sample delivery. The steady-state efficiency of the perovskite glovebox reached 27.61 percent. In the field of optical interconnect, the company has established project teams for Micro LED optical interconnect systems and glass-based substrate CPO technology. Chen Yanshun said the display business provides the company with approximately 40 to 50 billion yuan in operating cash flow each year, which can cover spending on LCD and OLED, innovation businesses, and investor returns. On shareholder returns, as of July 31 the company had repurchased approximately 86 million A-shares and 85 million B-shares, with total payments of nearly 500 million yuan and 400 million Hong Kong dollars. The controlling subsidiary Hefei BOE Display Technology completed a targeted capital reduction for minority shareholders, with registered capital reduced from 24 billion yuan to 17.55 billion yuan, and the company's shareholding increased from 36.67 percent to 50.14 percent.

Bualuang Securities says a new angle for KCE shares is the possibility that the selling price increase cycle could extend into 2027, even though the market has already priced in the July increase and another in the fourth quarter of 2026. The key driver is not direct demand for AI circuit boards, but the cost of standard E-glass, the upstream raw material for CCL, which continues to rise after producers gradually shifted capacity to higher-grade materials for AI that offer better returns. Morgan Stanley's price index for standard E-glass fiber rose from 1.0 times in September 2025 to 3.7 times in August 2026 and 4.1 times in September 2026, while KCE's fiberglass purchase price rose from 0.49 US dollars per meter in the second quarter of 2025 to 0.74 US dollars per meter in the second quarter of 2026, an increase of 51% year on year, which is still much smaller than the rise in upstream raw material prices, leaving a risk that cost pressure will feed through further. The research team has not yet included a third price increase in 2027 in its base-case estimates, because the general-grade CCL market is not yet entirely in shortage. It keeps its assumptions for the July and fourth-quarter 2026 price increases, maintains its TRADING BUY rating with a 70 baht target price, and views any additional price increase in 2027 as upside rather than part of the base case. Core profit is expected at 1.44 billion baht in 2026, up 78% year on year, 2.07 billion baht in 2027, up 43.9%, and 2.30 billion baht in 2028, up 11.1%.