L&F Co.,Ltd (066970)

L&F is a specialized company in secondary battery cathode materials, producing core materials used in electric vehicles (EVs), energy storage systems (ESS), and IT devices. Its flagship product is high-nickel (Ni95) NCM (nickel-cobalt-manganese) cathode material for high-energy-density premium EV batteries, and it successfully mass-produced Ni-95% cathode material for the first time in the world. Recently, it has been pursuing the lithium iron phosphate (LFP) cathode material business as a new growth engine, planning to commence mass production of LFP cathode materials from Q3 2026. It also supplies cathode materials for 46-series cylindrical batteries. Its major customers include leading domestic battery cell manufacturers such as Samsung SDI, LG Energy Solution, and SK On, and its proportion in the Tesla supply chain is known to be approximately 75%. Cathode active materials for EVs account for the majority of L&F's revenue, and it plans to expand the revenue share of LFP cathode materials to 25% of total revenue by 2027. L&F's core competitiveness lies in its technology, which secured a unique position in the premium EV market by successfully mass-producing Ni-95% high-nickel cathode materials for the first time in the world. Furthermore, it is the first Korean company to establish a mass production system for LFP cathode materials, proactively responding to non-Chinese LFP cathode material demand, and possesses high-density 3rd generation LFP cathode material technology. To strengthen cost competitiveness, it is simultaneously internalizing iron phosphate (FP) precursor technology and developing next-generation precursor-free manufacturing methods. It also commenced supplying cathode materials for 46-series batteries ahead of competitors, demonstrating high visibility into forward demand based on its technological superiority. L&F's annual revenue increased by approximately 19.46% year-over-year to KRW 4,644.1 billion in 2023, but then recorded a significant negative growth, decreasing by approximately 58.93% to KRW 1,907.5 billion in 2024. In 2025, it showed signs of recovery, increasing by approximately 13.07% year-over-year to KRW 2,154.9 billion. In terms of profitability, after turning to a deficit with an operating income of KRW -222.3 billion and net income of KRW -194.9 billion in 2023, the deficit expanded in 2024 with an operating income of KRW -558.7 billion and net income of KRW -380.7 billion. The deficit continued in 2025 with an operating income of KRW -156.8 billion and net income of KRW -534.7 billion. However, recent quarterly results show an improving trend, turning to a surplus from an operating income of KRW -121.2 billion in Q2 2025 to KRW 22.1 billion in Q3, KRW 82.5 billion in Q4, and KRW 117.3 billion in Q1 2026. Examining L&F's financial soundness, its debt-to-equity ratio was 135.27% in 2022. The debt-to-equity ratio for 2023 to 2025 is not specified in the provided data. The current ratio has been on a continuous downward trend, from 178.83% in 2022 to 112.71% in 2023, 70.21% in 2024, and 65.35% in 2025. ROE recorded 21.09% in 2022, and the ROE for 2023 to 2025 is not specified in the provided data. L&F aims to emerge as a key partner in the global battery materials market by establishing a 'two-track system' that simultaneously grows its existing high-nickel-focused business and its new LFP business. It plans to commence mass production of LFP cathode materials from Q3 2026, actively targeting the North American ESS market and the entry-level EV market, and aims to increase the revenue share of LFP cathode materials to 25% of total revenue by 2027. Furthermore, it plans to expand the supply of cathode materials for 46-series cylindrical batteries and strengthen its mid-to-long-term growth foundation through business diversification, from raw material procurement to recycling.