Daishin Securities on the 6th said L&F is expected to expand orders again this year as it benefits from securing non-China lithium iron phosphate (LFP) battery volumes in advance and the growth of the North American energy storage system (ESS) market. It newly set its investment opinion at "buy" (BUY) and the target price at 310,000 won. On the previous trading day, L&F shares closed at 195,100 won.
Kim Gwi-yeon, an analyst at Daishin Securities, calculated L&F's enterprise value at 13 trillion won. Kim said a 10% premium was applied by reflecting the benefit of LFP cathode material supply shortages on the average valuation since 2022.
Kim said, "L&F will benefit from the growth of the ESS battery industry based on its already secured non-China LFP cathode material production capacity," and added, "With North American LFP growth and expected shortage benefits, its investment appeal will continue."
L&F signed a 1.6 trillion won LFP cathode material contract with Samsung SDI and is building an LFP cathode material production plant in Daegu. After breaking ground in the third quarter last year, the plant is expected to be completed this year and mass-produce 30,000 tons (t) annually. The company then plans to secure an additional 30,000 tons of capacity through a second-phase expansion.
Kim said, "Because additional expansion remains possible, the mid- to long-term ESS revenue share is expected to rise to 20%," and explained, "By proactively securing non-China LFP cathode material volumes, L&F's sales capability will also be strengthened."
Kim added, "This year, as the North American ESS battery cell production capacity of the three domestic cell makers (LG Energy Solution, Samsung SDI, SK On) expands and production gets into full swing, L&F's additional orders for FEOC-free cathode materials will continue."