[Edaily Reporter Shin Ha-yeon ] On the 23rd, Daol Investment & Securities projected that L&F(066970), amid continued strong second-quarter earnings, will see new growth momentum materialize starting in the second half of the year as the supply of LFP (lithium iron phosphate) cathode materials for ESS (energy storage systems) begins in earnest. While maintaining its “Buy (BUY)” investment rating, the firm lowered its target price by 10% from 220,000 won to 200,000 won.

Yoo Ji-woong, an analyst at Daol Investment & Securities, stated, “We expect the higher-than-expected revenue growth to continue in the second quarter, and new growth momentum could materialize in the second half of the year due to the supply of LFP cathode materials for ESS applications.”

Daol Investment & Securities estimated L&F’s second-quarter revenue and operating profit at 900.4 billion won and 56.7 billion won, respectively. This represents a 73% year-over-year increase and a return to profitability. Total volume is expected to rise 10% quarter-over-quarter to 25,000 metric tons, while the average selling price (ASP) is projected to increase 13% from the previous quarter.

Analyst Yoo explained, “We have partially scaled back our assumptions regarding inventory valuation gains, reflecting the downward trend in prices since the beginning of the year,” but added, “We have raised our revenue estimate for the company by approximately 12%.”

Profitability is also assessed to have entered a phase of normalization. He said, “Although the lithium price applied to the valuation of lithium carbonate inventory—currently at $22 per kg—has risen significantly since the beginning of the quarter, reducing most of the large inventory valuation gains from the first quarter, absolute shipment volumes on a quarterly basis are recovering rapidly. As the upward trend in ASP is now fully reflected, we believe the operating profit margin—which had remained at around 2% , the operating profit margin—excluding one-time items—has begun to normalize at 6.3%.”

He cited expanding demand from global customers as the reason for the recovery in shipment volumes. Analyst Yoo analyzed, “We are seeing an increase in shipments to Europe from global Company T, and we estimate that the company’s shipment volume has grown significantly since the second quarter to accommodate the planned increase in production capacity at Giga Berlin starting in the third quarter.” He added, “The production capacity at Giga Berlin is structured such that the annualized volume will rise from 370,000 units to 450,000 units starting in the third quarter.”

The outlook for the second half of the year is that LFP cathode materials for energy storage systems (ESS) will emerge as a new growth driver. Analyst Yoo predicted, “Second-quarter results are expected to confirm high growth for two consecutive quarters,” adding, “Visibility into further revenue growth will emerge with the start of operations (SOP) at the LFP production plant for ESS in the third quarter.”

He said, “We estimate production volume for 2026, including LFP, to be approximately 98,000 metric tons, and 131,000 metric tons for 2027,” adding, “Starting in 2027, we also expect upside potential from expanded shipments of high-nickel cathode materials to the U.S.”