Key Takeaways:
Citibank boosted its price target for Kingboard Holdings (00148.HK) by 35 percent, citing a supply crunch in key electronics materials driven by the artificial intelligence infrastructure boom.
The bank's analysts reiterated a "Buy" rating in a note on Friday, calling Kingboard a "good catch-up choice" for investors who missed a recent rally in its publicly-listed subsidiary, Kingboard Laminates (01888.HK).
The price target was increased to HK$65 from HK$48. The bank also lifted its 2026 to 2028 profit forecasts for the company by a range of 50 to 61 percent, attributing the revision to shortages of glass fiber, copper foil, and copper-clad laminates (CCL).
This upgrade suggests growing conviction that the global AI build-out is tightening the supply chain for essential components beyond semiconductors. Demand for high-performance printed circuit boards (PCBs) used in AI accelerators has surged, directly impacting the CCL industry.
Citibank projects a significant shift in Kingboard's earnings structure. The bank forecasts the laminate business will account for 87 percent of the group's net profit by 2028, a dramatic increase from an estimated 38 percent in 2025. This highlights the strategic importance of its subsidiary in capturing the upside from the AI trend.
The report argues that the parent company's current valuation does not fully reflect the growth prospects of its laminate division.
The positive report on Kingboard signals that the effects of the AI investment cycle are rippling through the entire hardware supply chain. The note positions Kingboard as an undervalued play on the AI hardware theme beyond high-profile chipmakers. Investors will watch for the company's next earnings report to confirm if the laminate division's margins reflect this tightening supply.
This article is for informational purposes only and does not constitute investment advice.
