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[Alpha Biz= Kim Sangjin] Kiwoom Securities stated on Thursday that L&F's earnings will continue to be weak until the first half of this year and lowered its target price from 160,000 KRW to 130,000 KRW. However, the firm maintained its 'Buy' rating, citing expectations for increased orders and supply of cathode materials for new Tesla models.
L&F reported a revenue of 365.4 billion KRW and an operating loss of 149.8 billion KRW in the fourth quarter of last year. The operating loss was significantly larger than the consensus estimate of 102.3 billion KRW.
Kiwoom Securities explained, "Although the average selling price (ASP) declined due to falling lithium prices, revenue increased slightly from the previous quarter as shipments of high-nickel cathode materials to Tesla grew." They further explained that profitability was impacted by the lag effect from the drop in metal prices, additional inventory impairment losses, and the burden of fixed costs due to a decline in operating rates.
Kiwoom Securities estimates that L&F will record an operating loss of 81.9 billion KRW in the first quarter.
AlphaBIZ Kim SangJin(letyou@alphabiz.co.kr)
