JPMorgan Chase & Co published a research report that Kingboard Chemical (00148.HK) sales increased by 11% in the first half of the year, net profit increased by 70%, profit margin before interest and tax was better than expected, reflecting the group's healthier business, maintaining the "overweight" rating, and raising the target price from 20 yuan to 23 yuan.

The bank pointed out that although sales rose 11% in the first half of the year, it was still 9% lower than expected, mainly due to the decline in the price of laminate and chemical projects, but the production cost fell faster, so that the gross profit margin was improved to 19.6%. EBIT expected to be 14% higher, mainly due to strict control of sales and administrative expenses costs, net profit of 1.5 billion yuan in line with expectations, the overall performance is healthy.

The bank raised its profit forecast to reflect its performance in the first half of the year, with the EBITDA rate of material laminates remaining at 20.1 per cent in the second half, printed circuit board (PCB) products stable at 10.9 per cent and chemicals rising to 13 per cent. As for the real estate business, it is expected that the annual sales revenue will be about 70-8 billion yuan.