|
| |
Overview
Financial Highlight
HeadlinesBusiness Background Lotte Chemical Titan Holdings Bhd is a petrochemical producer. Its products include polyolefins, comprising of polyethylene and polypropylene and olefins comprising ethylene and propylene and other derivatives such as butadiene, TBA, benzene and toluene.
  Nepo That is why yesterday up by 10 cents due to inclusion into MSCI Index, the news is at bit late to public.. 13/05/2020 10:27 PM BornToSpeculate Its been going up almost everyday for a long time so its only natural it comes down a bit and stabilize. Today market is down coz of the US. A lot of counters taking a bigger drop today. Logically nothing has changed fundamentally for Lotte Chem ( oil price remains low and end product prices high ). Powell came out and said that this crisis might take longer to recover than expected for the US How much of an effect on Malaysian economy is subjective but our 'smart' fund managers will all take this a trading opportunity to sell down first and buy back later 14/05/2020 11:29 AM deadchicken http://www.businesskorea.co.kr/news/articleView.html?idxno=45568 The author is an analyst of Shinhan Investment Corp. He can be reached at jinmyung.lee93@shinhan.com. -- Ed. 1Q20 operating loss of KRW86bn (negative swing QoQ) far short of consensus Lotte Chemical posted an operating loss of KRW86bn (negative swing QoQ) for 1Q20, far steeper than the consensus estimate of KRW41.2bn. All negatives were reflected in earnings, including inventory valuation losses (KRW61.5bn), regular maintenance-related losses (KRW13bn), and negative lagging effect (KRW173.6bn). By division, operating loss from olefins stood at KRW11.7bn (negative swing YoY), aromatics KRW40.7bn (RR QoQ), and Lotte Chemical Titan KRW69.5bn (RR QoQ). The advanced materials division recorded an operating profit of KRW41bn (+13% QoQ) and Lotte Chemical USA KRW13.9bn (-57% QoQ). Losses from olefins, aromatics and Lotte Chemical Titan were attributable to an explosion at Lotte Chemical’s Daesan NCC, input of high-cost naphtha, and weak demand. With the COVID-19 pandemic in full force from March, the advanced materials division was able to deliver relatively decent earnings. Lotte Chemical USA’s earnings were weighed down by one-off costs and MEG price declines. 2Q20 operating profit of KRW101bn (positive swing QoQ) on cost reduction Lotte Chemical should be able to swing to an operating profit of KRW101bn (+KRW187bn QoQ) in 2Q thanks to the input of low-cost naphtha and removal of one-off costs. Naphtha prices are expected to decline 48% QoQ. PE and PP spreads are estimated to rise 10% and 14% QoQ, respectively. Operating profit from olefin operations will likely amount to KRW94.9bn (positive swing, +KRW106.6bn QoQ) and Lotte Chemical Titan KRW15.1bn (positive swing, +KRW84.6bn QoQ). Advanced materials operating profit is projected to reach KRW20.3bn (-51% QoQ) with major clients in the US and Europe hit by the COVID-19 pandemic. Lotte Chemical USA is forecast to post operating profit margin of 9.9% (-2.8%p QoQ) on rising ethane prices (C) and falling MEG prices (P). Retain BUY and raise target price by 9% to KRW230,000 We raise our target price for Lotte Chemical to KRW230,000 based on the upward revision of our earnings forecasts. Earnings are expected to grow markedly in 2Q due to low oil prices. But a meaningful improvement in chemical market conditions is unlikely as the boost from low oil prices should be short-lived and global oversupply persists. Nevertheless, we find shares attractive at current price levels (PBR of 0.5x based on 2020F BPS), considering stronger profit fundamentals compared to past down-cycles and net cash holdings. 15/05/2020 9:19 AM deadchicken https://in.investing.com/news/asia-naphthagasolinenaphtha-crack-surges-nearly-1000-formosa-buys-2259352 16/05/2020 8:53 AM titan3322 Price already locked in for June delivery seems good so Lctitan's profit should be v good for next qtr 16/05/2020 10:27 AM deadchicken https://m.facebook.com/cnn/videos/1455110754668594/ PP syringes shortage. 16/05/2020 3:25 PM titan3322 As long as crude don't come back to USD 50-60 level I am still buying for the mid term currently no other stocks present a better and safer option for mid term returns 18/05/2020 9:43 AM Simonalibaba i don't think company performance is based on level of oil prices but more on the demand supply dynamic of the economy toward the oil derivatives products. 18/05/2020 11:48 AM Fabien "The Efficient Capital Allocater" both factors will drive its prospect demand v. supply dynamics feedstock costs which correlates with crude oil price 18/05/2020 4:37 PM Simonalibaba With this kind of valuation, just keep it and will be safe. Unlike when ipo 19/05/2020 1:08 PM titan3322 VietnamCoffee distributing 50% of its earning to the shareholders is considerdered very good d not many in bursa do that lo 20/05/2020 9:28 AM deadchicken China's 250 million scooters riders required to wear helmets. Helmets material - polypropylene. China polypropylene future soaring high again!!!! 20/05/2020 6:40 PM deadchicken 炒完口罩炒头盔，聚丙烯再迎上涨行情？ 文章来自[塑米城] https://www.sumibuy.com/subject/detail/21548.html 20/05/2020 6:48 PM jackson88 Alteady above RM1.90 ....price up because PP price gone up and demand increase. 21/05/2020 9:37 AM jackson88 It is good that LC Titan go up above RM1.90. At least it will wipe out all the speculators who had sold below RM1.80. The rise will be more stable after that. 21/05/2020 10:08 AM deadchicken jinghee, read all the comments from Lctitan post. don't be spoon feed baby. 21/05/2020 10:19 AM BornToSpeculate One of the reasons Im still holding this is i cant find a better safe stock to switch to that hasnt gone up already. Guys if u have any please share. If you been observing there is buying support for this everyday just that the buyer doesnt put it entire on the board for you to see. Everyday it goes up then fluctuates down. Depending how you analyze, this is still a cheap stock to me with upside in next Q 21/05/2020 10:30 AM Simonalibaba that is exactly the same reason i bot this stock. i don't buy a stock for mere 30% gain. if i don't see 100% its no go. and i go in big position. i once saw this stock at IPO and looking at the prospectus, i tell myself its going to turn bad, never thought so badly hit and i forgot about it until recently. for the last 2 years i only go for gloves stocks and now this is my only focus. i hope i am right. 21/05/2020 11:31 AM jinghee Yes, technically all turn well, as long as naptha price keep lower.. Hope that it still keep far below from it previous high of >USD500..... 21/05/2020 4:20 PM jinghee today volume also turn 3x more than yesterday... hope it will resume it long term uptrend momentum 21/05/2020 4:21 PM jackson88 https://m.pulsenews.co.kr/view.php?year=2020&no=520920 Read this ....get ready for Lotte Chemical parent company M&A spending spree 21/05/2020 8:43 PM stockraider Upcycle for Global Chemical Industry Expected until 2022 Lotte Chemical: To Be Biggest Beneficiary of Curbed U.S. Ethane Production By Baek Young-chan & Yoon Jang-han May 25, 2020, 14:54Share Fonts The authors are analysts of KB Securities. They can be reached at yc.baek@kbfg.com and se18190@kbfg.com, respecitively. – Ed. Raise TP by 6.8% to KRW250,000; upcycle for global chemical industry expected until 2022 We raise our TP by 6.8% to KRW250,000 to reflect revised earnings forecasts (higher 2021-22 PE/PP profitability). As our second-best industry pick, Lotte Chemical is appealing because: (1) PE/PP profitability is forecast to climb on a boost in packaging demand in 2H20 (2) PE industry conditions in Asia are forecast to recover in 2020-21 vs. stagnant ethylene/PE supply in the U.S. Positive lag to improve profitability beginning in 2Q20 We forecast 2Q20 revenue of KRW2.93tr (-27.3% YoY) and OP of KRW163.1bn (-52.9% YoY), with earnings swinging into the black QoQ. Sales volume should decline QoQ stemming from curbed demand from the U.S. and European automobile industries, but profitability should improve on a positive lag based on cheaper naphtha, a key input. HDPE/PP prices are estimated to dive USD85.00/USD75.00 QoQ to USD740.00/ USD800.00, but feedstock naphtha is also forecast to plummet 50.4% QoQ (or USD269) to USD265. The positive lag is expected to continue should economic activity gradually normalize in 2H20. Curbed U.S. ethane production to dampen U.S. PE exports Despite an earnings slump in 1Q20, we recommend BUY for Lotte Chemical given (1) the start of a positive lag in 2H20, (2) COVID-19-triggered packaging-purpose PE/PP demand and (3) stagnant ethylene/PE supply in the U.S. for 2020-21. We emphasize the prospect of shrinking chemical production in the U.S. Plunging international oil prices will cause U.S. crude/natural gas production to tumble. Given this, we estimate 2020/21 U.S. ethane production volume to shrink 3.7%/5.8% YoY. Current insufficient availability of feedstock indicates that ethane cracker utilization rates in the U.S. should decline from 90.0% in 2019 to 85.3% in 2022. Thus, despite annual ramp ups for cracker facilities, net U.S. PE exports are not expected to exceed the current 6mn tons. In 2018-19, Asian PE market conditions deteriorated because of massive PE inflow from the U.S.; for 2020, we forecast the beginning of an upcycle. RAIDER SAYS; I THINK LCTITAN WILL OUTPERFORM COMPARE PCHEM LOH...!! JUST BUY & HOLD LCTITAN, YOUR UPSIDE WILL BE TREMENDOUS MAH...!! U WILL NOT REGRET LOH....!! 25/05/2020 5:41 PM kelvin61 Agreed with Stockraider on this stock. Have been buying this stock from RM1.20 all the way up. Expect Lotte to defer their planned expansion and retain the cash. Lotte may also reward shareholders with an interim dividend if the 2nd and 3rd quarter profits beat street estimates, cheers. 26/05/2020 1:09 AM  | |
