KB Securities raised its target price for L&F by 18% to 130,000 won, judging that earnings are expected to improve on increased demand for ESS (energy storage systems) driven by data center expansion. It maintained a "buy" rating.
On the 17th, KB Securities projected that L&F's sales in 3Q would be 676.3 billion won, up 92% from a year earlier. It also said operating profit would rise 92% to 18.9 billion won, with a return to the black for the first time in two years expected.
Lee Chang-min, an analyst at KB Securities, said, "Cathode material sales volume is expected to increase 38% quarter over quarter on the full-scale delivery of Tesla Model Y Juniper," adding, "The increase in cathode material sales volume is expected to continue through year-end."
KB Securities also said L&F is likely to benefit from increased investment related to artificial intelligence (AI). As the importance of ESS as power infrastructure surges, demand for ESS is expected to grow, centered on North America.
A boost is also expected from the Chinese government's notice that it will implement a battery export license system next month. L&F could take the place of Chinese corporations that held an 87% market share of batteries for U.S. ESS as of last year.
The analyst said, "L&F has already signed MOUs related to ESS-use LFP with two customers in North America, and it is the company with the highest visibility for additional orders going forward," adding, "We maintain our top-pick view on the secondary battery sector."