[Click e-Stock] "L&F to Expand Profit Starting With This Year's Return to Profitability... Target Price Up"

Target Price Raised from 180,000 Won to 240,000 Won

On April 22, Shinhan Investment & Securities raised its target price for L&F from 180,000 won to 240,000 won, projecting that the company will expand its profit momentum starting with a return to profitability this year. The brokerage firm maintained its 'Buy' investment rating.

Jinmyung Lee, a researcher at Shinhan Investment & Securities, stated, "We have raised our target price by 33% compared to the previous figure, reflecting upward revisions in earnings estimates and sector peer multiples." He explained, "Profitability is expected to continue improving due to higher operating rates compared to competitors, and fundamentals will gradually strengthen."

L&F's earnings for the first quarter of this year are expected to exceed market expectations. Lee said, "First-quarter sales are anticipated to reach 711.4 billion won, up 15% from the previous quarter, while operating profit is expected to decrease by 7% to 77.1 billion won, surpassing the consensus operating profit estimate of 58.6 billion won." He added, "Both cathode material sales volume and average selling prices are positive, and an inventory valuation gain of 66.9 billion won is expected due to the increase in lithium carbonate prices."

The company's first-quarter cathode material shipments are estimated to have risen by 9%, exceeding the break-even point. Lee attributed this to "the expansion of high-nickel product sales driven by solid downstream demand and the recovery of mid-nickel shipments following the end of inventory adjustments." He also noted, "The average selling price is expected to increase by 1% due to the strength in mid-nickel products, and this growth is likely to accelerate from the second quarter onward."

The company is expected to demonstrate differentiated momentum compared to competitors. Lee commented, "Based on robust key clients, shipments this year are projected to increase by 27% compared to last year." He added, "The favorable pricing environment driven by strong lithium prices is expected to continue, expanding profit momentum starting with a return to profitability this year." Furthermore, he stated, "Following the order from Samsung SDI in March, additional orders are anticipated due to the shift away from China, which will highlight L&F's differentiated performance and growth momentum within the sector and drive continued stock price re-rating."

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