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[Alpha Biz=(Chicago) Reporter Kim Jisun] Stock prices of L&F, a secondary battery stock, fell more than 7% in a day due to the stock market's outlook for a slowdown in earnings in the second half of the year.
According to the Korea Exchange on the 20th, the L&F closed at 211,000 won on the KOSDAQ market on the 18th, down 7.05% from the previous trading day. Stock prices fell to 215,500 won during the day.
This year, L&F's stock price rose to 101% at a high point, but about 80% of the current increase has been returned. Individuals flocked to buy the KOSPI last month on news of its push to be listed before the KOSPI, but stock prices have also been weak since their sluggish earnings were released in the second quarter. It is predicted that poor performance will continue in the second half of the year due to increased inventory of bipolar materials and falling market prices.
In the second quarter, L&F recorded an "earning shock," whose performance was lower than market forecasts. During the period, sales rose 0.4 percent on-quarter to 1.3862 trillion won and operating profit fell 92.6 percent to 3 billion won. The company said a sharp drop in lithium prices, which are raw materials, is the main reason for the worsening performance. They say profits have decreased by cheaply selling products made of lithium purchased when lithium prices are high.
Securities firms are lowering their target stock prices, saying L&F will be able to recover profitability in the fourth quarter at the earliest. Korea Investment & Securities lowered the target price of L&F from 380,000 won to 290,000 won on the 18th. Earlier this month, DB Financial Investment lowered L&F's target price from 360,000 won to 340,000 won.
"The drop in raw material prices led to a drop in the selling price of anode materials, and the impact of inventory valuation losses will continue until the third quarter," said Korea Investment & Securities Co. "L&F's estimated operating profit this year will fall 46% year-on-year to 143.8 billion won." "The fall in the selling price of polarized materials following a drop in raw material prices and the impact of inventory valuation damage will continue until the third quarter," he analyzed. The annual net profit per share (EPS) is also expected to decrease by about 64% compared to last year. L&F's third-quarter profitability is also expected to be sluggish due to inventory that reflects high raw material prices.
Tesla supplier L&F is also expected to be affected by Tesla's third-quarter decline in production. "Profitability will be normalized to 73.9 billion won in the fourth quarter when high inventory awareness is resolved," Hanwha Investment & Securities said.
After the closing of the market on the 17th, L&F officially announced its listing before the stock market. "We are considering the listing before the KOSPI and will finalize it through the board of directors and extraordinary shareholders' meetings," the company said. "We will re-announce the relevant matters within the time when the details are decided or within one month."
AlphaBIZ 김지선(stockmk2020@alphabiz.co.kr)
