KB LAMINATES (01888.HK) climbed over 9% during the session before settling with a 7.27% gain to close at HK$37.50, with trading volume reaching HK$2.692 billion. The company previously forecasted a first-half net profit exceeding HK$2.8 billion, representing a year-on-year increase of over 200%. This surge is attributed to sustained supply shortages in the copper-clad laminate (CCL) market and its upstream materials, leading to a notable rise in average product prices, along with a year-on-year increase in CCL sales volume.

According to a research report from Citigroup, the average price of 1080, 2116, and 7628 series electronic fabrics surged by 17% to 18% in August alone, bringing the year-to-date increase to between 118% and 165%. Additionally, KB LAMINATES plans to raise the spot price of CCL (including tax) by 10% to 15% in August.

UBS initiated coverage on KB LAMINATES with a "Buy" rating and a target price of HK$58, citing that AI-driven demand is tightening the supply of CCL and upstream raw materials. As the world's largest supplier of traditional FR4 CCL, KB LAMINATES is well-positioned to be a key beneficiary. The investment bank noted that the stock's approximately 60% decline from its June high presents an attractive buying opportunity.

The report further emphasized that even if the current cycle of traditional CCL upswing ends, company earnings are not expected to decline as sharply as in previous cycles. This is due to the company's expansion into AI-related upstream materials and the CCL business, which will provide new structural growth drivers. Its vertically integrated business model is also identified as a key differentiator.