Company Overview
L&F, founded in 2000 and listed on South Korea's KOSDAQ exchange, is one of the country's foremost producers of cathode materials for rechargeable batteries. Its core products are high-nickel NCM (nickel-cobalt-manganese) and NCMA (nickel-cobalt-manganese-aluminium) cathodes, manufactured at its plant in Dalseong, near Daegu, and supplied primarily to LG Energy Solution and other major battery-cell makers. The company emerged as a critical link in the global electric-vehicle supply chain during the early 2020s boom.
Since 2023, however, slowing EV demand, a sharp fall in lithium and other raw-material prices, and destocking by customers have combined to erode L&F's finances sharply. Against the backdrop of the Korean government's "Korea Value-Up Programme"—an initiative launched in 2024 to pressure listed companies into improving shareholder returns and price-to-book ratios—L&F has attracted criticism for selling down treasury shares rather than cancelling them and for issuing bonds with warrants that dilute existing shareholders. Its stock, which collapsed from its peak, staged a sharp recovery in early 2026, rekindling investor interest.
Business and Financial Performance
*Market position*
L&F holds a leading domestic share in high-energy-density cathode materials, though competition with rivals such as EcoPro BM is fierce. The company's growth was spectacular in the early EV era: revenues rose from roughly 400bn won in 2020 to more than 3.3trn won in 2022—a more than eight-fold increase in two years. That surge reflected surging global EV sales and what the industry called a cathode "supercycle."
*The downturn*
From the second half of 2023, the picture reversed. EV sales growth decelerated, customers drew down bloated inventories, and lithium carbonate prices collapsed. L&F swung from an operating profit of roughly 100bn won in 2022 to a large loss in 2023, with revenues roughly halving to around 1.8trn won. Losses continued in 2024, with revenues shrinking further to around 1.2trn won, and the company's financial position deteriorated visibly.
*Estimated financial summary*
Year | Revenue (est.) | Operating profit (est.) | Key developments
2021 | ~1.5trn won | Return to profit | EV demand surge; high-growth phase
2022 | ~3.3trn won | ~100bn won | Record revenues; cathode supercycle
2023 | ~1.8trn won | Large loss | Lithium price crash; customer destocking
2024 | ~1.2trn won | Loss continues | Bond-with-warrant issuance; balance sheet weakens
2025 | Recovery attempt | Narrowing loss (est.) | New business ventures; restructuring
2026 H1 | Recovery | Return to profit | Brokers cite "sustained profitability"
*Note: Figures are based on public disclosures and market estimates; some are provisional.*
*The LG Energy Solution contract*
A key variable in L&F's revenue outlook is its long-term supply agreement with LG Energy Solution. In April 2026, disclosures suggested the contract had been materially altered or scaled back—described in regulatory filings using the vague language of "amendment and adjustment." The market interpreted this as a potential shift in the relationship with its most important customer. That the precise terms were never made public compounded the concern: the opacity of the disclosure itself was widely criticised as damaging to investor confidence.
Value-Up: Key Developments
*2024 — Government programme launches; L&F's response is muted*
South Korea's financial authorities formally launched the Korea Value-Up Programme in 2024, encouraging listed companies to raise price-to-book ratios, cancel treasury shares, and expand dividends. L&F, grappling with mounting losses and liquidity concerns, focused instead on financial stabilisation. Market observers noted the contrast with the programme's stated aims.
*2024 — Bonds with warrants: the dilution controversy*
To raise funds during the downturn, L&F issued bonds with warrants (BWs)—a hybrid instrument that gives bondholders the right to subscribe for new shares in the future, diluting existing shareholders. A 2025 media series examining the Value-Up programme described the move bluntly: the company was "hoarding treasury shares while issuing warrants and asking only shareholders to foot the bill." Even accepting the necessity of raising capital, critics argued that doing so by transferring the burden to existing shareholders contradicted the spirit of the Value-Up initiative.
*August 2025 — New ventures in saturated markets*
In August 2025, multiple media reports drew attention to L&F's decision to channel resources into new business areas despite its unrepaired balance sheet. The markets into which it was diversifying were described as already heavily competitive. The concern, from a shareholder perspective, was straightforward: pursuing expansion in crowded markets before restoring profitability in the core business risks wasting capital and deepening value destruction.
*December 2025 — Treasury shares sold, not cancelled*
In December 2025, it emerged that L&F had chosen to sell its treasury shares rather than cancel them—even though liquidity was not reported to be a pressing constraint at that point. Cancelling treasury shares reduces the total number of shares in issue, raising the value of each remaining share; selling them does the opposite, putting shares back into circulation. In January 2026, L&F was cited in reporting that noted treasury-share disposals across the market had surged twelve-fold in the second half of 2025—interpreted widely as companies rushing to offload holdings before a proposed mandatory-cancellation rule came into force, thereby preserving future flexibility to use those shares as they saw fit.
*January 2026 — League tables highlight L&F's zero cancellations*
Reports comparing treasury-share practices among listed Korean companies in January 2026 placed Samsung Electronics at the top for both buybacks and cancellations. L&F, by contrast, recorded zero cancellations. In a regulatory environment where share cancellation had become a headline indicator of shareholder commitment, this comparison cemented L&F's reputation as a laggard on shareholder returns.
*February 2026 — Brokers signal return to profit*
By February 2026, major brokerage research was describing L&F as having entered a "sustained profitability" phase—marking a clear break from two years of heavy losses. The reports helped revive interest among institutional and foreign investors.
*April–May 2026 — Share price doubles in a month*
From April 2026, L&F's shares roughly doubled within a month, reaching new highs. The stock rose alongside a broader re-rating of South Korean battery-material companies, with L&F joining POSCO Holdings, SK Square, and LS Electric among the names setting new records. Whether the rally reflected genuine expectations of improved earnings or merely a rotation into beaten-down sector stocks was a matter of debate among analysts.
Challenges and Assessment
*Three outstanding challenges*
L&F faces three structural tests on the shareholder-value front.
First, it must rebuild credibility on treasury-share policy. Moving away from the practice of selling treasury shares and adopting an explicit cancellation plan would signal a genuine commitment to improving per-share value. With mandatory-cancellation rules expected to tighten in the second half of 2026, proactive compliance would be preferable to reactive adjustment.
Second, it must consolidate the return to profitability and strengthen its balance sheet. The liquidity raised through warrant-linked bonds only enhances value if it translates into competitive gains. A durable earnings recovery is a prerequisite for reinstating dividends or buybacks.
Third, it must raise the quality of its corporate disclosures. The vague language used to describe the contract amendment with LG Energy Solution is a textbook example of how ambiguous filings create information asymmetries that disadvantage retail investors—and corrode the trust that the Value-Up programme is designed to build.
*Overall assessment*
L&F was a symbol of South Korea's cathode-materials industry during the EV boom of the early 2020s. The downturn that followed exposed weaknesses in its capital allocation and a reluctance to prioritise shareholder returns that placed it at odds with the spirit, if not always the letter, of the government's Value-Up agenda.
Yet the signs emerging in 2026—a return to profit, a soaring share price—support a reading of L&F as a company navigating its way through a crisis rather than succumbing to one. The central question is whether this recovery hardens into a durable structure of earnings generation and shareholder return, or fades as a technical rebound in a sector momentarily back in favour. As market participants have repeatedly noted, the Value-Up programme's core demand is not simply a higher share price—it is the embedding of mechanisms that structurally enhance the value of every share outstanding. That remains L&F's unfinished business.
Summary Data Table
Year | Operating profit (est.) | Dividend | Treasury-share policy | PBR (est.) | Key issues
2021 | Profitable | Minimal | Limited data | High | EV demand boom
2022 | ~100bn won | Small | Limited data | High | Record revenues
2023 | Large loss | None (est.) | Limited data | Declining | Lithium crash; destocking
2024 | Loss | None (est.) | Held, then sold | Below 1x (est.) | BW issuance; dilution concerns
2025 | Narrowing loss (est.) | None (est.) | Zero cancellations; disposals surge 12x in H2 | Recovering | New-venture controversy
2026 H1 | Return to profit | TBD | Improvement needed | Rising | Share price doubles; new highs
*Note: Some figures are based on published market estimates and media reports; official financial statements should be consulted for verification.*