Citigroup: Jiantao Group (00148) PCB business profit margin narrows to cut target price to HK$125

The Zhitong Finance App learned that Citi released a research report stating that the target price of Jiantao Group (00148) was drastically lowered from HK$202 to HK$125, corresponding to the projected price-earnings ratio in 2027 by about 12 times, maintaining a “buy” rating. However, considering the low base and the acceleration in profit growth of Jiantao Laminate (01888) in July,

Jiantao Group's net profit for the first half of the year increased 5% year on year, in line with earlier profit forecasts. However, the profit margin of the printed circuit board (PCB) business narrowed more than expected. The PCB business's contribution to EBITDA in the first half of the year fell to 17.3% from 24.5% in the same period last year, and PCB business EBIT also fell 10.6% year on year, mainly due to depreciation before new production capacity in Vietnam and Thailand increased production capacity. Citi lowered the Group's profit forecast for 2026 to 2028 by up to 4%. Currently, it is estimated that Jiantao Group's profit for the second half of this year will increase 2.3 times year-on-year, reaching 5.99 billion yuan. Of the two, I am more optimistic about Jiantao's laminated board because of its strong profit growth momentum and simpler business.