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L&F headquarters (Photo = L&F) |
[Alpha Biz= Ellie Kim] DS Investment & Securities raised its target price for L&F to KRW 350,000 from KRW 250,000 on May 6, maintaining a “Buy” rating, citing strong growth driven by high-nickel battery materials.
L&F reported robust first-quarter results, with revenue of KRW 739.6 billion (+103% YoY) and operating profit of KRW 117.3 billion (+42.2% YoY), significantly exceeding market expectations of KRW 60.7 billion. The earnings surprise was attributed to strong sales, price increases, and a KRW 92.6 billion reversal of inventory valuation losses.
High-Nickel Demand Drives Performance
Average selling prices (ASP) rose 4% quarter-on-quarter, with high-nickel products up 2% and mid-nickel products jumping 14%. Shipment volumes also increased 12% overall, led by a 13% rise in high-nickel deliveries.
Analyst Choi Tae-yong noted that demand for Ni95 (95% nickel content) products was supported by expanded adoption in long-range electric vehicles and growing demand for 46mm cylindrical batteries.
Momentum Expected to Continue
DS Investment & Securities forecasts continued growth in the first half of the year, projecting second-quarter revenue of KRW 891.2 billion (+71.3% YoY) and a return to profitability with operating profit of KRW 43.1 billion.
While inventory-related gains may taper due to stable lithium prices (expected to remain in the $20–22/kg range), stronger metal prices are likely to drive further ASP increases. Shipment growth is also expected to remain centered on high-nickel products, though mid-nickel volumes may decline due to customer adjustments.
Long-Term Growth Backed by 46mm Batteries and LFP
In the longer term, growth is expected to be driven by 46mm cylindrical batteries and lithium iron phosphate (LFP) products. The firm anticipates increased adoption of 46mm batteries by Tesla, while LFP demand is expected to gain visibility following orders from Samsung SDI.
DS Investment & Securities said the improved business visibility justified reducing the valuation discount, leading to the upward revision of the target price.
Alphabiz Ellie Kim 인턴기자(press@alphabiz.co.kr)
