[Click eStock] "L&F, Visible North America Investment"

Partnership with Battery Recycling Specialist Redwood Materials
KB Securities Raises L&F Target Price from 150,000 KRW to 260,000 KRW

[Asia Economy Reporter Gong Byung-sun] L&F is expected to significantly increase its cathode material production capacity by partnering with battery recycling specialist Redwood Materials. It is anticipated to improve profitability in the mid to long term through expansion into the North American market.

On the 29th, KB Securities raised L&F's target stock price by 78%, from the previous 150,000 KRW to 260,000 KRW, maintaining a "Buy" rating. The closing price on the previous day was 182,900 KRW.

The reason for the target price increase is the investment in the North American plant. On the 27th, L&F signed a strategic technology and business agreement with Redwood Materials, founded by Tesla co-founder J.B. Straubel. Through this, the cathode material production capacity, which was expected to be around 200,000 tons combined in Korea and Europe by 2025, is expected to increase to 350,000 tons.

Lee Chang-min, a researcher at KB Securities, said, "Through this cooperation, L&F is judged to have laid the foundation for entering the North American market," adding, "It is expected to have a mid- to long-term profitability improvement effect as key cathode material raw materials such as lithium and cobalt can be procured relatively cheaply."

Meanwhile, L&F's third-quarter performance this year is expected to exceed market consensus. KB Securities estimated L&F's third-quarter sales to increase by 230% year-on-year to 278 billion KRW, and operating profit to turn positive to 12.5 billion KRW during the same period. These figures exceed the respective consensus estimates by 1.16% and 17.92%.

The researcher explained, "The operating rate of the new Guji plant producing Tesla-oriented nickel-cobalt-manganese-aluminum (NCMA) cathode materials is rising," adding, "The exchange rate, which averaged 1,121 KRW last quarter, is rising, and smooth price pass-through along with increasing metal prices are also positive factors for performance."