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South Korean battery-materials maker L&F Co.
066970,
signed a $2.91 billion supply contract with Tesla Inc.
TSLA,
L&F said in a regulatory filing Tuesday that it would provide high-nickel cathode materials worth 3.835 trillion won to the U.S. electric-vehicle giant.
The deal will last for two years from Jan. 1, 2024, through Dec. 31, 2025, L&F said.
Shares of L&F, listed in the second-tier Kosdaq market, jumped as much as 19% higher to KRW285,000 in morning trade following the supply contract with Tesla.
Korea Investment & Securities analyst Kim Jung-hwan said in a note Tuesday that he expects the deal to help Tesla continue to push for its own battery supply chain.
The deal is also likely to help L&F, a supplier to South Korean EV battery makers, diversify its customer base globally and get a better valuation, he said.
Korea Investment expects L&F’s cathode shipments to increase 46% in 2023, and raised its operating profit forecast by 11%.
The brokerage revised up the stock’s target price by 15% to KRW380,000 and kept a buy rating.
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