Battery material makers are accelerating a shift in their business mix by moving into the lithium iron phosphate (LFP) market and preparing for the commercialization of next-generation sodium-ion batteries (SIB), even as electric vehicle demand stalls and currency swings weigh on earnings, analysts said. Cathode and anode producers that have diversified their form factors and customer bases are expected to be re-rated over the medium to long term after weathering weak near-term results.
Kiwoom Securities and NH Investment & Securities both raised their price targets for POSCO Future M (003670) on the 16th, according to financial data provider FnGuide. Kiwoom upgraded the stock to buy from neutral and lifted its target to 290,000 won, implying about 53.2% upside from the previous session's close of 189,300 won.
Kiwoom said the sequential start-up of converted LFP lines in the fourth quarter, replacing existing high-nickel capacity, and continued momentum in LFP cathode orders in the second half remain intact. It added that the company's ability to produce both cathodes and anodes — the only such capability in South Korea — will also serve as a weapon in the SIB market. POSCO Future M is developing new cathode materials for sodium-ion batteries, including sodium iron fluorophosphate (NFPP) and sodium iron manganese oxide (NFM), as well as hard carbon anodes, a material specific to the technology. Development of hard carbon is due to be completed in the third quarter of 2027, with mass production starting in 2028. On top of its existing domestic natural and artificial graphite capacity, the company is pursuing the first phase of artificial graphite production in Vietnam targeted for 2028, and Kiwoom said the strategic value of its anode business will stand out as the U.S. tightens rules aimed at removing China from supply chains.
NH Investment & Securities the same day raised its target for POSCO Future M by 22% to 180,000 won from 148,000 won. It reflected the equity value of C&P New Materials, an LFP joint venture with a global partner, and said securing customer approval within the year and beginning full-scale production could act as a catalyst for a near-term rebound in the share price. POSCO Future M's LFP capacity is expected to expand to 55,000 tons in 2028 from 27,000 tons in 2027.
NH nonetheless kept a hold rating on the stock. It said the shares trade at 162 times projected 2028 earnings, well above the sector average of about 40 times. For the third quarter, the brokerage expects operating profit of just 16.8 billion won, below the market consensus of 26.8 billion won, as a sharp appreciation of the won compounds sluggish shipments of low-cost cathode materials for IT applications.
Expectations were also raised for L&F (066970), another cathode maker. NH Investment & Securities lifted its target for L&F by 23% to 160,000 won from 130,000 won. Despite concerns that Tesla is diversifying its cathode supply chain, the brokerage raised its sales forecast for nickel-cobalt-manganese (NCM) cathodes after the company secured direct shipments for 4680 cylindrical cells and won new projects in North America. L&F is expected to swing to an operating loss of 11.6 billion won in the third quarter, but the brokerage said the shortfall is a temporary result of the stronger won and should be treated as a buying opportunity.
Analysts see the commercialization of sodium-ion batteries as a new source of growth across the battery value chain. China's CATL has built gigawatt-hour-scale production, launched passenger EVs using the technology and won a string of energy storage orders in Europe, making 2026 the first year of SIB commercialization, they said. With abundant raw materials, low costs and strong performance at low temperatures, sodium-ion cells are expected to complement LFP in energy storage systems, including uninterruptible power supplies for data centers, as well as commercial vehicles and small passenger cars. Because they can be produced on existing lithium-ion lines without extensive retooling, Korean manufacturers are expected to complete development and begin mass production between 2027 and 2028.
"As with LFP in the past, SIB is taking hold as a new technology standard led by China, while the need for supply chains outside China is growing," said Kwon Jun-soo, an analyst at Kiwoom Securities. "Preparations for commercialization in Korea are likely to be moved up, so investors should focus on companies that have secured core parts of the value chain early — hard carbon anodes, new cathode materials and aluminum foil, where technical difficulty and cost weighting are high."
