[Click eStock] L&F Soars Riding Tesla in 2Q... Target Price Raised
![[Click eStock] L&F Soars Riding Tesla in 2Q... Target Price Raised](http://www.asiae.co.kr/news/img_view.htm?img=2022010407311285926_1641249073.jpg)
[Asia Economy Reporter Hwang Yoon-joo] Hana Financial Investment maintained its 'Buy' rating on L&F on the 17th, expecting rapid growth in the second quarter as well, and raised the target price to 370,000 KRW.
Kim Hyun-soo, a researcher at L&F, stated, "Second-quarter sales are expected to reach 892.6 billion KRW, a 335% increase compared to the same period last year, and operating profit is projected to rise 1,087% to 68.2 billion KRW, indicating a continued steep growth trend."
Researcher Kim explained, "Strong performance is expected as Tesla, the largest end-user customer, increases demand for materials and market share (M/S) within customer companies continues to rise."
However, the operating profit margin is forecasted at 7.6%, a 2% decline compared to the first quarter. Kim analyzed, "Due to the business characteristic of receiving a fixed processing margin in absolute price terms, the operating profit margin will slightly decrease during the sales increase process caused by price hikes."
Structurally, with a solid price pass-through power against rising raw material costs, the operating profit margin is expected to be maintained at 7% to 8% in the mid to long term.
![[Image source=Yonhap News]](http://www.asiae.co.kr/news/img_view.htm?img=2022040421444415812_1649076284.jpg)
Researcher Kim stated, "L&F's 2023 sales are expected to increase by 40% year-on-year to 4.7 trillion KRW, operating profit to rise 40% to 379.9 billion KRW, and 2024 sales to jump 32% to 6.2 trillion KRW, with operating profit increasing 33% to 506.9 billion KRW."
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He added, "Tesla, which has the steepest growth rate in electric vehicle sales among automobile companies, is the largest end-user customer, providing high visibility for sales growth. Lithium has shifted to a self-supply structure, eliminating the burden of cost increases, and the price pass-through power for nickel and cobalt remains firmly maintained, resulting in very high visibility for profitability outlook."
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