[Click eStock] L&F, Strong 3Q Performance "Strong Buy Opportunity" vs "US Market Entry Risk"

L&F Reports Strong Q3 Earnings Exceeding Forecasts
Sales Increase 416% Year-on-Year

Most Securities Firms Maintain Target Prices, Kiwoom Securities Raises Target to 300,000 Won
Daol Investment & Securities Lowers Target Due to Uncertainty in US Market Entry

[Asia Economy Reporter Ji Yeon-jin] Since L&F announced better-than-expected earnings for the third quarter of this year, securities firms' outlooks on the company's value have been divided. The company's US market entry, which had previously faced setbacks, is the main point of contention regarding the timing of future entry.

On the 10th, Kiwoom Securities maintained a buy rating on L&F and raised the target price to 300,000 KRW. Junsoo Kwon, a researcher at Kiwoom Securities, stated, "The third quarter of this year recorded solid performance due to price increases and exchange rate effects," adding, "Regarding the US investment, we expect to reapply in accordance with the Ministry of Trade, Industry and Energy's guidelines by expanding the equity stake in the joint venture (JV) corporation through cooperation with Redwood, the JV partner."

Earlier, L&F announced that its third-quarter sales increased by 416% year-on-year to 1.2 trillion KRW, and operating profit rose by 630% to 98.7 billion KRW. This exceeded market expectations (90.7 billion KRW). The continuous increase in cathode material orders from LG Energy Solution and SK On led to a more than 20% increase in cathode material shipments, and the rise in metal prices caused a 10% increase in cathode material prices, which drove the strong performance.

The continuous increase in cathode material orders from ES and SK On resulted in cathode material shipments rising by more than 20% compared to the previous quarter, and the rise in metal prices led to a more than 10% increase in cathode material prices compared to the previous quarter, driving sales growth.

Most securities firms maintained their target prices for L&F on the day. Changhyun Jeon, a researcher at Daishin Securities, said, "Through this earnings announcement, much of the uncertainty regarding US market entry has been resolved, and after the government's final approval, a sharp stock price rebound is expected," maintaining a target price of 380,000 KRW. Hana Securities also maintained a target price of 370,000 KRW, anticipating the possibility of US entry, while IBK Investment & Securities (330,000 KRW), DS Investment & Securities (380,000 KRW), and Hyundai Motor Securities (330,000 KRW) also maintained their target prices and top preference for cathode materials. Dongjin Kang, a researcher at Hyundai Motor Securities, said, "This is the lowest valuation level since the growth of the secondary battery cathode material business became visible," adding, "We see this as a new entry opportunity."

However, Daol Investment & Securities lowered the target price to 330,000 KRW on the same day due to uncertainty about the timing of L&F's US market entry.

This content was produced with the assistance of AI translation services.