[Click eStock] "L&F, Operating Profit Margin Down... Target Price ↓"

Lithium Price Plunge
Electric Vehicle Market Growth Slows Down

On the 13th, KB Securities forecasted that L&F's operating profit margin would decline considering the sharp drop in lithium prices and the slowdown in the growth of the electric vehicle market. Accordingly, they maintained a 'Buy' investment rating but lowered the target price to 200,000 KRW.

Lee Chang-min, a researcher at KB Securities, stated, "We are revising down the average selling price (ASP) of cathode materials from $44 per kg to $31 per kg."

The researcher estimated L&F's second-quarter sales to be 689.4 billion KRW, a 50% decrease year-on-year, with an operating loss of 55.2 billion KRW. He explained, "Although shipment volume is expected to increase by 25% compared to the previous quarter, the ASP is forecasted to drop by 15%." He also analyzed, "Fortunately, the possibility of additional inventory valuation losses is considered low."

He projected L&F's 2024 sales to decline by 34% year-on-year to 3.05 trillion KRW, with an operating loss continuing at 223.2 billion KRW. The researcher assessed, "While poor performance in the first half of the year is inevitable, in the second half, shipment volume expansion due to the launch of new products (such as single crystal 46-pi and polycrystalline 21700 with 95% nickel composition) and ASP stabilization from lithium price stabilization are expected to lead to profitability recovery." He concluded, "We maintain a positive view on L&F."