[Click eStock] "L&F, Profit Expected from Q1 Next Year... Target Price Up"

Expected to Turn to Deficit in Q3
Focus on Tesla Robotaxi Day on the 9th

On the 8th, KB Securities forecasted that L&F would return to a loss in the third quarter of this year but expected a turnaround to profit from the first quarter of next year. Accordingly, they maintained a 'Buy' investment rating and raised the target price by 21% to 170,000 KRW.

Lee Chang-min, a researcher at KB Securities, stated, "From the fourth quarter, shipments of the new NCMA product with 95% nickel content will begin, leading to a sharp rebound in shipment volume (+67% QoQ estimated) and a reduction in the deficit."

The researcher explained, "The cost burden related to high-priced raw materials, which has long hindered performance, is expected to be resolved within this year, and a return to profitability is anticipated from the first quarter of this year."

In particular, L&F was presented as the top among secondary battery material companies. This is due to the decline in interest rates and the notable performance of candidate Harris, along with positive events related to Tesla, a major customer, on the horizon. First, shipments of single-crystal nickel 95% cathode materials for the 4680 battery (Cybertruck) and polycrystalline nickel 95% cathode materials for the new 21700 battery are scheduled to begin from the fourth quarter of this year.

Additionally, Tesla Robo-taxi Day will be held on the 9th (local time). With rising expectations for autonomous vehicles, the mid- to long-term rationale for electric vehicles will be established, and the Tesla value chain is expected to attract attention.

Meanwhile, sales for the third quarter of 2024 are expected to decrease by 69% year-on-year to 383.6 billion KRW, with an operating loss of 49.9 billion KRW, marking a return to a loss. This is because shipments of NCM products are expected to plunge sharply, leading to a 31% decrease in total cathode material sales.