테슬라 밸류체인, 엘앤에프 전망 밝다

 "All the batteries are the same. No.""Tesla Value Chain" Races LG Ensol and L&F

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Korea Economy, May 17, 2022 16:57

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"Earning Surprise," which is 23% higher than L&F's consensus

Tesla's Electric Vehicle Production Boosts Performance

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L&F, a producer of secondary battery anode materials, and LG Energy Solution, a cell manufacturer, are showing strong performance thanks to surprise performance (earning surprise). Despite unfavorable factors such as rising interest rates and soaring raw material prices, earnings estimates are rising steeply due to increased production by Tesla, a major customer. The valuation of the two companies (the level of stock price compared to performance) is the highest among major Chinese and European companies as well as secondary battery-related stocks in Korea. Nevertheless, the market is paying attention to the rapid growth and differentiated technology of these companies rather than the burden of valuation.

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L&F is trading at 237,000 won as of 1:45 p.m. on the 17th, up 2.46%. The company's stock price jumped 37.27% from March 15 to the 16th. During the same period, LG Energy Solution also increased by 11.40%. During this period, the KOSPI fell only 0.95%.

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Solid performance is supporting the rise in stock prices. L&F recorded 553.6 billion won and 53 billion won in sales and operating profit in the first quarter, respectively. Operating profit succeeded in turning into a surplus compared to the same period last year and exceeded consensus (average estimate of securities firms) by 23.5%. The operating profit ratio is 9.6%, the highest ever. Earlier, LG Energy Solution also made a surprise performance that its operating profit exceeded the consensus by 58.0% in the first quarter.

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Compared to other secondary battery-related stocks, it is evaluated that its performance improvement is outstanding. Earlier, POSCO Chemical and SK I Technology announced their operating profit for the first quarter, which is below the consensus. Among major secondary battery companies, LG Energy Solution, L&F, and SK Innovation (208,000 + 1.46%) have exceeded 20% of earnings surprise rates in the first quarter. Considering that SK Innovation recorded an operating loss of 273.4 billion won in the battery business, in fact, only two companies recorded a large earning surprise.

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Tesla is behind LG Energy Solution and L&F's surprise performance.

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The secondary battery cathode material made by L&F is supplied to Tesla through LG Energy Solution. Tesla's vehicle production is expected to increase 61 percent year-on-year to 1.5 million vehicles this year.

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Although Tesla's plant in Shanghai has been temporarily suspended, analysts say its impact on domestic companies' performance is limited. Kim Jung-hwan, a researcher at Korea Investment & Securities, said, "LG Energy Solution is estimated to supply cylindrical batteries to Tesla's Berlin and Texas plants, so the profits of domestic related companies will also increase significantly."

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Among secondary battery-related stocks, which are representative growth stocks, L&F and EcoProbim are given high valuation. LG & F and LG Energy Solution's 12-month leading share price ratio (PER) is 53.8 times and 85.4 times, respectively. The burden of valuation is higher than other anode material manufacturers EcoProBM (46.4 times) and cell manufacturers Samsung SDI (23.3 times).

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Nevertheless, the stock market considers two companies belonging to Tesla's value chain as promising stocks. Kang Dong-jin, a researcher at Hyundai Motor Securities, said, "If all secondary battery-related stocks have shown a good trend, who their customers are will be more important now," adding, "The growth of cell and material companies in Tesla's value chain with a discriminatory business structure and high productivity will be highlighted."

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Analysts say that L&F, a cathode material company, is more promising than LG Energy Solution, a cell company. First of all, it is highly likely that Tesla directly supplies NCMA (nickel, cobalt, manganese, and aluminum) cathode materials to its own 4680 batteries. Discussions with three to four customers are also becoming visible, including the establishment of joint venture (JV) with Redwood, a battery recycling company. On the other hand, LG Energy Solutions still has a burden of overhangs (potential sales volume). In July, about 9.96 million shares will be released for six months.

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Stock market eyes toward L&F are also rising. Eleven securities firms that released L&F reports on the 16th and 17th raised their target prices at once. Meritz Securities Co. (430,000 won) offered the highest target price. Korea Investment & Securities raised its operating profit forecasts for L&F this year and next year by 140% and 57%, respectively.

Focus on rising

 How should we pass the chaotic period when prices rise and interest rates rise?

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Prices go up and interest rates go up.

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We will judge what goes up and focus on what goes up.

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It's not the hope, preference, or wish that I have

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Build a position on products that lean on the rising structure.

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1. Benefits of rising costs

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The sector that continues to focus is the area that benefits from rising costs.

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It's the industry of journalism, parts, chemistry, etc

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It's not easy to maintain a positive perspective in a chaotic situation,

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Since Trump, Q (volume of goods) has been on the floor due to "volume of goods that have been shrinking for recent years x demand that has been further dampened by COVID-19."

  : I don't know if it's okay to express it in Q, but it's a fundamental approach

  : See Seaborne Trade Volume / Growth

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P also seems to have ended the supply of cheap Chinese goods (which seemed to last forever).

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Q raised his head before P, and now he is looking at a situation where Q is maintained and P is going up further

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So it is hoped that old-fashioned industries will rise from the bottom for a long time with both P and Q rising.

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2. A sense of awe of survival, perseverance and tenacity

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What I trust most about myself in my view is the awe of someone's grit.

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19/20 The Crypto Market. 

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They put everything into it to take root even in that cold atmosphere. I was in awe of the Crypto Pioneers

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Now, despite that small demand, I am in awe of the equipment company that managed to manage the company and the team.

  : Those companies that have been bottoming out, cutting stakes to survive, to prepare for ESG

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It could be like a hero story of a boy cartoon where he overcomes hardships and eventually achieves his goal

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But if you think about it, the flow goes over once, 

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I'm in awe of that grit to survive.

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3. Labour

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In addition, I think there will be a revaluation of labor and workers that create Output.

Best NFT in the World, BAYC Collection and Yuga Labs

 What about Yuga Labs?

In March 2022, the NFT scene was noisy with Yuga Labs.

* Lava Labs acquisition of CryptoPunks & Mebits

* ApeCoin and Metabus Game Otherside Launch

* It recently attracted $450 million (about 550 billion won) in investment, worth $4 billion (about 4.8 trillion won) in corporate value

Yuga Labs created a project called the world's top NFT collection BAYC (Bored Ape Yacht Club).

I'd like to introduce what kind of place this is and what kind of dream it is through this content

Yuga Labs is well known for its web 3.0 brand, which created the BAYC NFT collection in the crypto world. After BAYC, he succeeded in expanding the ecosystem by creating the MAYC (Mutant Ape Yacht Club) collection and the Bored Ape Kennel Club (BAKC), which are created by mixing a potion called Mutant Serum with BAYC, and providing benefits to NFT holders.

Yuga Labs is a brand that was co-founded and created by four members, and it became an issue not too long ago as the personal information of two of the co-founders was unintentionally released.

* Because Web 3.0 spaces are primarily online identities, it is common for them to remain unidentified.

BAYC is owned by a number of international celebrities, including Justin Bieber and Snoop Dogg, and forms the highest floor price in the NFT collection. The reason why it is considered the world's most valuable NFT collection is that BAYC's community strategy has completely changed the nature of the NFT scene by becoming a global standard for NFT projects.

*What is Floor Price? It means the lowest price in the NFT series (the cheapest NFT available)

CyptoPunks, the founder of the NFT

Currently, the No. 1 spot in the NFT collection is occupied by BAYC, which was launched in April 2021, but the collection that was crowned before that was CryptoPunks.

Cryptofunk, released in June 2017, is one of the NFTs of Ethereum Blockchain Base. It was released long before the NFT boom, when only a few people were active in the crypto world.

The first Kryptopunk didn't have a specific purpose or community, as it gave away NFTs for free. It was first produced for a simple experiment at Lavarabs, an artist and two engineers named Matt and John.

At a time when the concept of NFT was much more sparse for most people, those who owned Cryptofunk enjoyed the common value of 1) the digital ownership value of NFT and 2) the expectation of the potential for the Ethereum blockchain. So the Cryptofunk holder meant the social status that symbolized the original Gangster (OG) in the Crypto world.

This nature of Cryptofunk naturally formed the community, but there was no additional benefit (utility) from owning the NFT other than just the personal satisfaction of collection.

BAYC, on the other hand, operated a discode that only NFT holders could enter as a compensation program, enabling online communication between holders spread around the world. In addition, it received a lot of praise from people seeking decentralization with a series of policies, such as holding offline events such as yacht parties where only holders can participate and giving holders commercial rights to NFTs to freely produce products to be freely produced using BAYC images.

Beyond the concept of simply collecting NFTs, BAYC has created a NFT boom by providing a discriminatory utility that only owners can enjoy, increasing the original value of NFTs, and securing royalties through the 'club' type of NFT community where only holders can enter.

This differentiated strategy led to successful results such as BAYC's soaring prices in the summer of 2021 and NFT scenes instead of Cryptofunk, and became the basis for NFT policies, including the expansion of communities, utilities, and IP usage rights of NFT projects released after BAYC.

Interest of Asset Allocation Investors

 ✔ Distributed investment is the norm for allocating less correlated assets

✔ Digital assets are not correlated with existing assets, so pay attention

✔ Need to consider digital assets as a target of asset allocation investment

Heybit is a service that invests in digital assets (cryptocurrency) such as Bitcoin. But why invest in digital assets? There may be many reasons to pay attention to digital assets, but one of them is asset allocation.

the law of asset allocation

Asset allocation investments can generate unwavering returns in a variety of market conditions by simultaneously holding less-correlated assets. Harry Max Markowitz won the Nobel Prize for his only 12-page paper describing it.

Correlation of Digital Assets

But from this point of view, digital assets can be an interesting asset allocation target.

Forbes' One Chart Explains Why You Should Bitcoin And Other Cryptocurrency explains this. The reason is simple. This is because digital assets are less correlated with other assets.

Correlation is the degree to which prices move together. For example, if the prices of both assets move the same way, the correlation is 100. On the other hand, if the price of both assets moves in reverse, the correlation is -100. If the price of both assets is going my way, the correlation is zero.

What about digital assets?

The article shows that Bitcoin has a very low correlation with assets such as the U.S. stock market, the dollar, the global stock market, bonds, commodities, gold, oil, etc. All the values are between -11 and +8, so it's close to zero.

In addition, this characteristic is not only seen in bitcoin, but also in all other digital assets. Most digital assets now have a high correlation with Bitcoin, so it's a natural result.

Why is this information important?

Digital assets are therefore attractive as a target of asset allocation. In a joint paper published by Jim Kyung-Soo Liew, CEO of SoKat Consulting and Professor of Carey Business School at Johns Hopkins, and Leva Hewlett, a Quant Risk Management Associate at the Maryland State Pension Service, digital assets also claimed to have a "unique distributed investment effect."

Of course, nevertheless, cryptographic assets have many risks. Above all, institutions that make asset allocation investments need a considerable level of institutionalization and infrastructure before they can purchase them. It may take more time than you think, or it may not even happen.

But if you think about it the other way around, it might mean that it's possible to get much more attention than it is now if you have that foundation.

Terra, the Luna crisis

 Recently, bad news from TERRA/LUNA has rocked the market.

Haybit's deposit product is a structure in which digital assets are loaned to institutions and Diffie protocols and funds are raised, and the related operation status is continuously monitored closely after pre-validation.

I would like to introduce the background of this TERRA/LUNA incident and Haybit's prompt response.

UST, what's the Luna situation?

Terra is a blockchain project founded by Kwon Hyung, CEO of Apple engineer.

As the craze for decentralized finance (D-Fi) intensified, D-Fi deposits and market capitalization of TERRA (UST), which aims for a global payment system, grew rapidly.

Due to the nature of stable coins that maintain value by controlling supply by algorithms and fixing (peg) them to legal currency such as dollars, problems arise when this price linkage structure collapses.

UST originally advocated stable coins pegged at $1 and a reserve currency called Luna was used to maintain the price. 

When the UST price falls, the price is adjusted by issuing Luna, and when the UST price rises, Luna is incinerated to deliberately adjust the price.

However, as the market continued to decline, UST prices fell significantly, and for this reason, they continued to issue Luna to defend the price, but even this did not work well, so they could not avoid the "death spiral."

Luna, which was the top 10 digital asset market cap, plunged about 99% in just a week, trading below $1 on May 12 afternoon (based on overseas exchanges, excluding blocked exchange prices).

Will Haybit deposit products be okay?

In conclusion, Haybit was not hit hard by this UST incident.

Harvest, a Haybit deposit product, operates the product through Defi and other partner operators.

Some of the Defi were being deposited through the Terra Ecosystem's Anchor Protocol, but as mentioned earlier, there was an internal control process that continuously monitored the status of operations, which quickly lost money early in the incident.

As such, Haybit's deposit products are always responding to possible risks, so they are operating stably because they can minimize risks or secure sufficient interest resources.

We also continuously monitor the asset status of other partner operators other than Terra to check for abnormalities, and confirm that there is no problem with customer deposit assets and the company's financial situation.

In addition, when external threats are detected, the relevant situation is transparent and immediately disclosed to relieve customers' anxiety.

The Terra incident seems to be raising concerns about the stable coin Tether (USDT). For Tether (USDT), unlike UST, the Tether Foundation is a stable coin with a high percentage of reserves. If the Tether Foundation has enough reserves, it is not expected to see a sharp drop like the UST, and although it has fluctuated at one point due to a series of concerns, it has now regained stability.

Tether also said in a statement, "I don't think the UST situation means anything to the centralized stable coin market," adding, "It's a completely different type of asset from us."

Apart from these statements, Haybit continues to monitor the price status of tethers. Please refer to the last post for additional information on the status of the tether's reserves and stability.

Haybit will continue to keep a close eye on other threats, including the UST incident, so that those who want to hold digital assets for a long time regardless of price volatility can increase their assets with confidence.

Start smart and reliable digital asset investment with Heybit.

M2E, Stephen

 P2E? Now, M2E (Move to Earn)!

Play-to-earn (P2E) is now a universal concept. It gained attention as a way to make money while playing games. Domestic game companies have also vowed to develop P2E games. This atmosphere is heating up not only cryptocurrency but also the stock market.

But I think you can think about this. What if I know P2E, but I don't like games? I don't have time to play games, and if I don't like games, I don't think I'll have many opportunities to experience P2E. For those of you, I'd like to introduce you to a new type of project. M2E (Move-to-earn) and StepN (StepN) who make money by walking and running.

Stephen is a project created by Solana, a rapidly growing blockchain platform as a competitor of Ethereum. It's a project that won 4th place in the Hackathon competition hosted by Solana as the main sponsor. Stephen can be described in one sentence below.

There must be an app that comes to mind while listening to the explanation above. It's called "Cashwalk." Cashwalk is a so-called money-making pedometer. Stephens are essentially a cache walk. However, the difference is that cashwalks give money if they walk, and Stephen gives tokens if they walk or run.

Stepn is a Solana-based app with social and game elements. If you have sneakers (NFT) and run the app (StepN) to walk or run outdoors (GPS), you can use up the set energy per day to get the items called coins and mystery boxes.

Sneakers (NFTs) can be grown (leveled up) using tokens and have different capabilities (stats, socats). Although the number of tokens you can get per day is limited, you can get them efficiently depending on your ability. Like actual sneakers, NFT sneakers wear out if you use them for a long time, so you have to use up tokens to repair them. You can also synthesize sneakers (NFTs) to create new ones (breeding).

The token earned through Stephens is called the Green Satoshi Token (GST) and you can make a profit by selling or exchanging this GST. Alternatively, you can level up your sneakers using GST or repair the durability of your sneakers. Eventually, you can choose to cash the tokens you get from walking or running right away, or you can consume them and grow your sneakers quickly to get more tokens.

Stephens can only be started if they have sneakers (NFT) that are basically the same as game items as the game items. First of all, the user must choose sneakers to match their fitness level. There are four main types of sneakers: Walker, Jogger, Runner, and Trainer. The number below each sneakers means the speed per hour. Stephens must select sneakers according to each player's level.

If you run with sneakers that don't match your usual running or walking speed, you may not get a token. So you have to choose jogger and runner rather than walker to use the steppen while running. Of course, you can get more tokens by spending the same energy when running than walking, but keep in mind that you have to choose the right sneakers for your fitness level.

Sneakers can be purchased at the marketplace in the Stephen app. However, in the case of sneakers, you have to choose carefully because the skill level is different. In general, the better the performance of the sneakers, the more efficient the token can be. Of course, the price will be expensive as the performance is good, right?