UBS has released a research report initiating coverage on KB LAMINATES (01888) with a "Buy" rating, viewing the stock's approximately 60% decline from its June high as an attractive entry point. The bank has set a target price of HK$58.

Driven by AI demand, supply for copper-clad laminates (CCL) and upstream raw materials is tightening. As the world's leading supplier of traditional FR4 CCL, KB LAMINATES is expected to be a primary beneficiary of this trend.

The report suggests that even if the current cycle for traditional CCL comes to an end, the company's earnings are unlikely to decline as they have in previous cycles. This is because KB LAMINATES' expansion into AI-related upstream materials and CCL products will provide new structural growth drivers. The report also highlights the company's vertically integrated business model as a key competitive advantage.