KB Securities analyzed that L&F reported earnings for the fourth quarter of 2024 that fell short of market forecasts. Consequently, they maintained a 'buy' rating, but downgraded the target price from 130,000 won to 120,000 won, a decrease of 8%. On the previous trading day, L&F closed at 83,100 won.
According to KB Securities, L&F recorded a revenue of 365.4 billion won for the fourth quarter of last year, a 44% decrease compared to the same period the previous year, and continued to face an operating loss of 149.8 billion won. The operating margin was minus (-) 41%.
Lee Chang-min, a researcher at KB Securities, noted, "After a strong inventory adjustment in the third quarter of last year, Tesla's shipments partially recovered, resulting in a rebound in overall shipments; however, an inventory valuation loss of 47.6 billion won occurred due to declining lithium prices."
He further added, "In addition, the start of operations at the Guji 3 factory and low overall operating rates led to increased fixed cost burdens, and the influence of low-priced sales of NCM523 products, which were produced with high-priced materials and supplies, compounded the challenges for profitability."
L&F's revenue for the first quarter of this year is estimated to be 382.5 billion won, a 40% decrease compared to the previous year, with an operating loss of 76.5 billion won. The researcher stated, "Due to delays in sales of NCMA95 products, the rebound in sales volume is expected to be limited, and as inventory valuation losses and NCM523-related deficits persist, poor profitability seems inevitable."