A securities industry analysis has suggested that L&F, while continuing the expansion of high-nickel cathode material shipments, could show a differentiated trend in the secondary battery materials sector in the second half of 2026, with its LFP cathode business also joining its earnings.

Stock Decline Due to 'Competitor Noise'... No Change in Fundamentals

Meritz Securities evaluated L&F (066970) as a secondary battery materials company to watch in the second half of 2026, analyzing that the shipment growth potential of high-nickel cathode materials remains valid. Regarding the recent stock price movement, the firm offered the view that uncertainty surrounding competitors, rather than the company's own fundamentals, had an impact. While various noise related to competitors dampened investor sentiment and dragged down L&F's share price as well, the judgment is that there has been no significant change in the company's core business growth potential.

High-nickel cathode materials, its mainstay business, were cited as the key pillar supporting future earnings. With demand for high-energy-density products continuing in the electric vehicle battery market, the critical question is whether actual shipment increases translate into revenue and profitability improvements.

LFP Cathode Materials Expected to Generate Contribution Profit in Q4 This Year

In addition, LFP cathode materials are emerging as a new earnings variable. Meritz Securities forecast that L&F's LFP cathode business will generate contribution profit in the fourth quarter of this year. LFP is a cathode material whose application areas are expanding beyond electric vehicles to energy storage systems (ESS), based on its price competitiveness and stability. If L&F adds LFP to its existing high-nickel-centered business structure, its product portfolio could broaden and its ability to respond to diverse customer demand could expand.

Key Points to Watch in the Second Half

Ultimately, the key for L&F in the second half is whether LFP establishes itself as a new profit-generating business while the shipment growth trend of high-nickel cathode materials is maintained. Separate from investor sentiment shaken by competitor-related issues, it appears necessary to verify the earnings contribution of the two businesses.

[Stocks may exhibit heightened price volatility depending on corporate performance, industry conditions, merger terms, market supply and demand, and other factors. Securities firms' analyses and forecasts may differ from actual future results and do not guarantee returns on any specific stock. Before making investment decisions, it is necessary to comprehensively review the company's official disclosures, financial condition, and business progress. This article is not intended to recommend the purchase or sale of any specific stock. This article was written with AI assistance.]