Citi: Lowers the target price for Jian Tao Laminated Boards to HKD 92, presenting a market entry opportunity after a sharp decline.

Citi published a report stating that the share price of Kingboard Laminates has fallen over 60% from its peak in June, and it believes now is an opportune time to re-enter the market, anticipating accelerated profit growth in the second half of this year. The bank expects that Kingboard's net profit growth rate for the second half of the year will accelerate to 2.8 times year-on-year. The report highlights three major positive catalysts for the company, including that starting from early August, the inflation of electronic glass fiber cloth costs would likely lead to a sales price inflation for copper-clad laminates in August ranging from 10% to 15%; after the earnings announcement on August 24, market focus will shift to the profit growth outlook for the second half of the year, which is expected to accelerate compared to the first half; and Kingboard's launch of a T-type glass fiber cloth production line in August. Considering that the company's earnings surprise in the first half was below the bank's expectations, along with heightened market concerns regarding AI capital expenditures by major data center operators and Nvidia's cyclical financing, the bank has lowered its earnings forecast for Kingboard for 2026 to 2028 by 9% to 14%. Based on a target price-to-earnings ratio of 22 times, the target price has been reduced from HKD 130 to HKD 92, a decrease of approximately 29%, with the rating adjusted from Buy to Buy/High Risk.