[Click eStock] "L&F, Additional Expansion and Order Expectations This Year"

Yuanta Securities maintained a buy rating on L&F on the 3rd, citing additional expansion and order momentum expected due to the growth potential of domestic cell companies in the U.S., and raised the target price from the previous 294,000 KRW to 450,000 KRW.

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Researcher Anna Lee of Yuanta Securities explained, "Although there is a possibility of short-term price correction due to rapid stock price increase, it is a representative growth industry and a top market capitalization sector in KOSPI and KOSDAQ, so the correction period is not expected to be long. The detailed provisions of the U.S. Inflation Reduction Act (IRA) announced on the 31st of last month included cathode active materials as key minerals, resolving regional uncertainties for cathode material companies."

She added, "Therefore, further expansion announcements are expected, and interest in cathode materials is likely to refocus. L&F's annual sales this year are expected to increase by 52% year-on-year to 6 trillion KRW, and operating profit is expected to grow by 26% to 336.4 billion KRW, indicating significant external growth following last year."

L&F is expected to begin mass production of the world's first single-crystal cathode materials with over 90% purity in the second half of the year. Additionally, efforts to diversify its customer base continue, leading to increased orders. Besides the 3.8 trillion KRW orders for Tesla over two years, the recent decision by LG Energy Solution to invest in a sole factory in Arizona, USA, is also expected to boost related order momentum.

Researcher Lee stated, "LG Energy Solution's 2170 cylindrical cell customers are likely Tesla and Lucid, with most expected to be for Tesla. Among cathode material companies, L&F has the highest valuation attractiveness."

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