KCE Electronics Public Company Limited (SET: KCE) expects strong sales growth in 4Q26 to continue into FY2027, supported by higher average selling prices and increased production volumes. Maybank Securities (Thailand) views the sales targets as achievable but remains cautious about the company’s longer-term gross profit margin guidance.
Following KCE’s 3Q26 analyst meeting, Maybank placed the stock “Under Review.” Its latest rating was “Hold,” with a target price of THB 53.
KCE targets sales growth of 24 – 27% and a gross profit margin of 27 – 30% in 4Q26. The sales guidance incorporates a 13 – 15% increase in average selling prices and approximately 10% volume growth.
The price increases reflect substantial raw material cost increases in the previous quarter, while KCE expects its TLM laminate factory to support margin expansion. Management believes the margin target is achievable if costs remain stable.
Maybank considers both the quarterly sales and margin targets potentially achievable, noting that raw material costs have remained largely flat quarter-to-date.
For FY2027, KCE expects sales growth of 35 – 40% and a gross profit margin of 27 – 30%. The sales target assumes a 25% increase in average selling prices and approximately 10 – 15% volume growth, with additional volume mainly coming from existing automotive customers.
KCE is expanding total production capacity to 7 million square feet from 6.2 million square feet in 3Q26, with most additions focused on high-density interconnect (HDI) products. Its order backlog stands at 7.6 million square feet, indicating robust demand.
Management expects the fiberglass shortage to ease by 2H26, helping alleviate production and delivery bottlenecks. However, Maybank cautioned that improved fiberglass availability could reduce KCE’s relative advantage from its TLM laminate capacity.
The brokerage also sees sustained artificial intelligence growth potentially pushing raw material costs higher, making FY2027 margin guidance appear aggressive despite a realistic sales target.
KCE expects approval for a new factory within FY2026, with mass production targeted for early FY2028 if approved.
Phase One would add 1 million square feet of capacity, increasing total capacity by approximately 14% to 8 million square feet. The planned production mix is now 50% HDI and 50% multilayer, compared with the previous 30% and 70% split.
Management sees a low cancellation risk, citing more sustainable order bookings and stronger customer interest in capacity than during 2023–24.
Overall, Maybank sees a positive direction for KCE and moderate upside to its FY2027 – 28 forecasts. However, it stressed that growth is largely driven by cost-related selling-price increases rather than premium pricing, leaving sustained high margins dependent on stable costs.
