LCTITAN (5284)

Lotte Chemical Titan Holdings Bhd is a petrochemical producer. Its products are mainly derived from petroleum and they include polyolefins, comprising of polyethylene and polypropylene and olefins.

MQ Fundamental Analysis

Figure 1: Quarter revenue of LCTITAN

Figure 2: Quarter profit of LCTITAN

Figure 3: Quarter profit margin of LCTITAN

Figure 4: Quarter ROE of LCTITAN

Figure 1 and 2 show that the profit earned by LCTITAN in 4Q18 is significantly low as compared to the profit earned in the previous quarters. Its profit margin indicates the lowest value throughout the quarters as shown in figure 3 because high portion of sales is failed to be converted to profit in 4Q18. As a result, LCTITAN has low ROE due to low profit margin.

MQ Fundamental Rating

Fundamental analysis is not applicable to LCTITAN which was listed on stock market since June 2017, as at least 5 years of financial data is required to generate a reliable and accurate fundamental analysis.

MQ Technical Rating

Based on MQ technical rating, LCTITAN’s share price is currently experiencing bearish trend, as it is lower than the benchmark (MQ Technical rating > 3.0/5.0) to be considered as a bullish stock. Most of the technical indicators such as Rising Moving average and Moving average crossover are showing bearish signal at the moment.

EMA 5 Crossover Daily Chart

ADX Crossover Hourly Chart

A sharp plunge in share price is observed on 30 Jan 2019 as shown in both EMA 5 Crossover daily chart and ADX Crossover hourly chart. The main reason for this phenomena to happen is the announcement of its poor financial result in 4Q18 which causes the occurrence of panic selling. There is no price rebound signal is detected, as ADX is still indicating strong selling pressure in the hourly chart. In this case, it is clearly portraying how close the relationship between earning and share price of a company.

Conclusion

Without a proper fundamental analysis, the suitability of LCTITAN for long term investment is still uncertain, as sustainability of the company’s business model and the capability of the management cannot be identified. In our opinion, we will save our capital for better opportunities for short term, as uncertainties will increase the risk of investment. Apart from that, opportunity cost is another key consideration that has to be taken into account, as its value may not be realized within a short period.

MQ Trader Analysis Tool

To view LCTITAN’s fundamental analysis on MQ Trader: https://klse.i3investor.com/mqtrader/sf/analysis/fa/5284

To view LCTITAN’s technical analysis on MQ Trader: https://klse.i3investor.com/mqtrader/sf/analysis/stkta/5284

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Disclaimer

This article does not represent a BUY or SELL recommendation on the stock covered. Traders and Investors are encouraged to do their own analysis on stocks instead of blindly following any Trading calls raised by various parties in the Internet. We may or may not hold position in the stock covered, or initiate new position in the stock within the next 7 days.

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