Ok increase to 1.79 and matched

I'm in queue at 1.78

Im waiting to see if it will drop more before i add. pchem is down 24. most stocks seem to be recovering / holding.

When i thinking of queuing, the prices goes back up again.

After how he got whacked in other forums like topglove im surprise he still want to continue talking. Giving everyone free entertainment

Lol just ignore him. When prices goes back up later he will disappear again.

Im waiting to collect more if it drops below what i bought that day.

https://www.thestar.com.my/business/business-news/2019/10/02/lotte-chemical-parent-to-jointly-fund-rm18b-plant-in-indonesia

Also, its not logical you take cash away from the expansion and you dont give any value to the expansion. Meaning he/she assumes LCT management are such big idiots they will invest another 2.2b for us ( or based on his assumption 4b ) and this will do nothing for future earnings or it will lose money for us.

Based on LCT track record since 2016, they have only reported an accounting loss on this year Q1

I dont really like to criticize people ( the CIMB analyst ) but for the benefit of Max55 ill share this

This is from all the quarter financial results under IPO utilization.

They budgeted 3.5b for capital expenditure since IPO, and they have spent 1.3b so that means another 2.2b left for the Indonesia plant as TE3 and PP3 line expansion completed earlier. Why they still have 4b cash is because of the all the retained profits the past 4 years, after dividends. In short, after giving us the dividend they still got excess cash so its builds their cash balance.

So even if you want to discount 2.2b cash you claim will be used for expansion, and note that this will be only be completed in another 1-2 years and assuming worst case LCT makes NO PROFIT profit until then, you still have another 1.8b cash. My rough projection is that cash build up might be close to 4b again after completion with projected profits, the next 2 years.

The CIMB analyst not only was lazy to add in this to his valuation, as he just chose to put a disclaimer. Doesnt even comment on increase in selling prices or the spread nor wrongly quotes core earnings ( not taking out non cash items ). I was doing my CFA charter once too, luckily i didnt complete or i might end up with his/her skills

By the time they complete their 2.2b expansion in Indonesia they would have at least another 2-3 B cash likely in bank ( as you can see that they actually utilized some of the IPO proceeds earlier but cash went back up due to retained profits over the years ). If i were them now, i would push a higher dividend to lure more shareholder interest just to fix shareholder spread. It would also make a good story that will a good financial result this coming quarter due to a healthy spread and growing demand, they also offer an interim dividend as a quick fix.

The cash pile is also good for M&A related acquisition where you see so many companies badly hit by COVID, many opportunities to explore

soros thats is the magical question, how to find out the spread. We can only estimate using historical naptha prices before covid ( Sept to Dec 19 ) and also selling prices of PE and PP prices then and compare then and now. Note that there is no formal exchange where you get can get these plastic prices from so you have to search it via other means. I

In Dec 19, oil prices was USD 65 per barrel and they reported a pre-tax of 142m ( assuming this is from core operations ) for Dec quarter. We can use this as a estimate to forecast how they are going to this quarter.

nottieboy, judging from the volume since the CIMB report, i think that particular fund has sold down already. I think it will be up on Monday too.

pradeep, just ignore these kind of spammers. If you notice no matter what news they will spin it negatively. They feed fear and appear to happy when ppl are losing money. Dont worry karma will get them back with a mountain of losses. When price is up, they will curse and tell u sell before its too late. When its down, they will add fire and tell you how stupid you are and they told u so.

Don't bother even replying him. We welcome criticism witht facts and logic but if some wants to just rant and be sour grapes then just ignore them.

You know what they say, what goes around comes around. If you always curse ppl and hope they lose money, only bad luck will be at doorstep soon.

Just look at his history of comments

What they mean is raw material cost to selling price. Lotte does plastic and main end products like pe and pp plastic has gone up substantially. Raw materials are downstream petrochemicals so related to oil prices.

Shareholder spread is ok coz Lotte chem Korea holds 70% and if they buy anymore they have to declare. The logically way to solve the spread is to push share price up so new shareholders come in.

IPO a few years ago was 6.5 so if Lotte chem Korea could buy more they would but would risk privatization which defeats the main purpose of going for listing in the first place. They could do that and buy back cheap but they are not doing it coz they got other bigger plans. That's my take

US market likely down tonight but don't worry. Just hold on until at least next quarter result.


I expect market to drop on Monday but this is already oversold d. I think it will hold else I might add a little more.

Thanks Soros. I didn't know I can be influential just wanna share what I know so that everyone wins.

Don't worry be happy for everyone who makes here. Remember the target is to whack and earn from the funds when they start buying again

Genesis unless u have lady luck with u just hold on coz we can't time markets. I didn't sell since 1.22. In fact I cut loss on some old stocks I held due to sentimental reasons that took a dive since PH govt took over and bought more Lotte today

Haha matched. And up

Now queuing at 1.90

No matter how bad markets turns out to be we are so close net cash per share. sure can't lose long term unless u buy on share margin.

In queue at 1.88. Again not matched

I just avoid property / construction no matter how cheap coz things wont be good next 6-12 months. If i had to buy, i will only look at KSL.

i just added more LCTITAN at 1.84. Was in queue earlier at 1.80, 1.82 and was distracted with work and all not matched sigh. I have no luck in trading. Anyway a few cents dont matter if your buying for long term

Nepo the spread is still healthy. Your right, oil price down means naptha should be down too. Selling prices have gone up and actually as long as PP/PE selling prices are not lower than last year level shouldnt be an issue

white bunny, those negative shamans left this chat after the prices went up and they got tired of being wrong. I name a few names but lets not get personal. We're just here to share and make money together. Only good fellas left here and everyone is more or less happy coz we boarded the train earlier

There is paper loss of the profit we had but Im still confident this stock has a lot of upside due to all the reasons we have been discussing here.

There are actually so many variations of why the intrinsic value of the company is worth more. If tomorrow, LCTITAN decides to issue out the cash dividend for the entire cash portion and borrow from the banks for their expansion due to low interest rate funding present ( banks will surely lend them ), how much do you think the share will be worth after the dividend ? Definitely not 20-30 cents.

Or if they do allocate the cash to portion to increase dividends since they got too much cash and after all expansion costs they will be still have surplus as of now.

Some ppl might say they are too conservative or lack of business opportunity but i think they have bigger plans in mind and btw anyone that is sitting on sizable cash pile like this can do wonders on M&A especially since covid has killed so many industries.

JollyAndy, we can never predict the market. If you believe in the company and the valuation, just hold tight. There are so many reasons why stocks up and down and when market is bad everything will come down.

If you invest long term like an investor but cut loss like a trader, you will cap your upside. Of coz, if your wrong you can lose more, but this is where we put our money where our mouth is.

Some of us are not that worried coz our costs is 1.20-1.30 and we took the dividend too but even if you joined the party late, remember cash per share is 1.71 no matter who is selling, i think they will regret this later. Thats my take

you can see the buyers are holding back, waiting on the side. volume is low today.

Dont care what the analyst say. But dont be complacent, just read what they say and see if they are telling you something u dont know. What i expect is for the analyst to tell me what we missed during analyst briefing coz we are not allowed to attend anyway and sometimes they get info before its released and they spill the beans indirectly in the recommendation.

Is it a good time to buy since market will crash anytime soon ? Thats why we are here coz we know next quarter will have good results whatever happens to Malaysian market instead of chasing glove stocks at 100 PE. Anyway do you think market is going to crash ? Whole world govts are supporting with COVID relief with low interest rates and strong intervention. Most investors already prepared to accept bad QRs for whatever industry you can think of whether its airlines or cruise liners to recovering shale drillers.

Warren Buffet the all time 'best investor' made the biggest mistake but selling off airlines at the lowest and now it was rebounded sharply making him look like the biggest idiot in town. So dont blindly follow people without using common sense

Andy, worst case scenario the net cash per share of this is 1.71 per share roughly with their 4b cash at bank. CIMB moron recommendation is target of 1.62 even below this price.

So he/she thinks LCTITAN ( even though 2 players in Malaysia ) is such a lousy business and we should even take a discount on cash per share. You just look at objectively whether that make sense to you.

here

May 1, 2020 10:45 AM | Report Abuse

Ill try to explain this briefly. If you read the cashflow statement :-

Loss of -205m

+ main non cash items
depreciation 134.6m
write down inventory 81.3m
impairment from associate 35.1m

So you end up with a small operating loss actually of 28.5m after the rest of items. Which means the bulk of the losses are accounting losses, not cash burn.

After working capital changes, net cash after operations is 270m ( similiar to previous period ).

Did anyone notice that cash and bank balances already increased despite the loss to 4.03b from 3.91b ?

So now you know why there are big buyers when others are just shouting on the side line

Simon is right. Especially when there is a big loss and the analyst dont even correct explain the loss i.e. whether it is non cash, due to conservative accounting principle they took more provisions or impairment etc.

last quarter for LCTITAN the bulk of it was non-cash i earlier shared the post. i can reshare here. Analyst have to be careful with their words. Above the analyst core net loss earnings / loss were 140m instead of quoting cashflow

Jollyandy thanks for sharing this.

317 USD is still very acceptable compared to what it was last year and not forgetting selling prices have gone up.

I personally dont think that oil prices will go back to 65 usd in the short term. From the current of 40 usd, it should be more less volatile and more stable keeping in mind that global demand is still low even with all the cuts

Do what you think its right. Just remember these are the same shallow analyst that told you to sell PCHEM on result and lower target to 5+ or lower and it has gone the other way.

They say EV/EBITDA for LCTITAN is half the industry average due to volatility. The only other comparison is PCHEM. LCTITAN actually made a consistent 130M+ PBT for 3 consecutive quarters except the recent loss whereas PCHEM has been reporting very volatile drop in earnings you can check for yourself.

These are all kindergarten analyst which normally had an unconvincing buy or sell recommendation. What we need is some non public info that was disclosed during analyst briefing about how the company is actually doing instead of info we can google and find out ourselves.

Again, they dont talk about ASP prices going up. They dont even quote what naptha cost USD they used in their analyst

jinghee you need insider info for that. mgmt wont disclose such detail info especially pricing. And why would China party pay 5 times unless its buyer thinks the price of the commodity will jump by more than 5 times in the near term so they want to lock in now.

This counter is mainly institutional play. Retailers cant really push the share up anyway. The reason it was down yesterday was due to association with Glove related counters. It is not really related apart from the fact that they supply Butadiene but when big funds get hit they start to reduce some of their positions and this was affected.

Today was a clearer view that those that went up sharply without fundamentals, have all come down today ( ADVENTA, HLT, LKL, etc ). Its bad enough that we got stupid research houses that can promote glove stocks at 100 PE but for ppl to chase these other supporting industries at this high valuations is just a con. Just look at how much profit some of these companies actually make.

Many ppl think that this profit taking on glove sector but i think it might be trend reversal now as it is obvious that its not worth a quarter of that. And the funds are closing their positions and buying finance / banks today, thats why banks are up 10% today. Remember Google PE is 25, Alibaba is maybe 45 times and these are market leaders with technology and competitive advantage. Glove industry is just contract manufacturing and its not really high tech.

I just added a little bit more at 2.30 earlier. My old stock is all at 1.22 plus. Not worried and im adding some coz i think there is still a lot of upside

This happened

Dear Margin clients

Kindly take note starting today there’s a revision of Price capping for the Glove counters below

35% price cut on market closing or the price as stated below, whichever lower

1) COMFORT (2127) RM2.35
2) HARTA (5168) RM8.15
3) KOSSAN (7153) RM5.65
4) RUBEREX (7803) RM2.31
5) SUPERMAX (7106) RM5.00
6) TOPGLOVE (7113) RM8.64

If you have glove counters in margin account and have Margin call, can regularise by end of June 2020

Thank you

simonalibaba i see your also here. I just sent you a private message

Decided to just top-up at 2.34

This is the main raw material for nitrile

https://www.lottechem.my/products/productGuide_view.asp?code=C224

I was looking at Genting too but I chose Suria instead as I dont want to gamble on recovery story and when it will happen. This is a worldwide issue on tourism decline due to covid and everyone including Europe, Japan, etc and we dont know if this is 6mths or 1 year or if they numbers will come back at a lower amount

I know Airasia is cheap now but i just dont like the idiot. He has no backbone seeing how he switches sides so fast, and he is obviously took a huge bribe from Airbus and got off 'scott-free'. Imagine if he has given that saving to the company and shareholders, how much interest he could have saved. So i dont feel he does things in best interest of company

Anyway Airasia success is purely political. Locally he can do well coz he can get approval for all the profitable routes. On an international stage ( AAX), see how they do when its a level playing field.

Nepo I see you are also here. I also bought suria. The only two stocks I bought since covid

You have to treat old stock as a loss and you begin new every day. If you don't, everyone will get sentimental and be tempted to average when you have higher costs. This is normally the worst decision and even im guilty of it.

What is lost is lost. You can only make it back via other means. Most stocks are technically dead coz of the economy. If you bought property, construction, building materials, oil&gas, etc the come back will be a long time waiting. Either you accept the lost or just leave it there coz it wont be coming back anytime soon

dont use good money to chase after bad money. always remember that in the market for you win someone has to lose. we have to think of how to make money from the funds coz they always kill all the retailers

This is a good example of why i dont trade. No luck for me and i dont have the time to monitor. It was trading 1.60-180 for a long time, but you would have miss this rally the past few days. This alone should be more than your trading gain

Terrorsin, patience is a virtue. I've been holding since 1.23

What other stocks u bought ? POS ?

One thing I wanted to share is that some ppl have the perception that LCTITAN is only competing locally against PCHEM for its business. LCTITAN has one 1 plant in Malaysia i think, the rest of are overseas. Their 2b+ expansion is actually in Indonesia so i dont understand why someone earlier was trying to compare with Pengerang project and PCHEM.

Posted by BornToSpeculate > May 3, 2020 10:41 AM | Report Abuse X

With the current oil prices at historical low, being an downstream user is definitely better than being an integrated player. Is anyone doubting that Petronas group is now suffering badly right now ? Is there transfer pricing to PCHEM and will this change ? What is the avg cost of oil production for Petronas ?

Why did PCHEM report a substantial drop in profits ( since 2018, it has dropped every quarter except Jun2019 ) to a low in Dec 2019 its a worrying underlying down trend but im not going to go into details. This is before MCO. They have the same financial closing as LCTITAN but the latter already reports 1 month earlier consistently. Lets see what PCHEM reports end of May.

No need to argue. You buy GLC producer, you pay 16 PE ( based on 2019 results ). LCTITAN is 7-8x ( based on 2019 results ) and has higher cash per share. Both are expanding, doesnt matter is one is bigger than the other, what matters is the EPS to shareholders and dividend. If you think 16 PE is cheap for PCHEM please go ahead.

hitgirl47 i guess you partied more than you read. They are finance / stockbroking background over a long period. Go and ask any old timer and do a proper google search before you further embarrass yourself with your ignorance

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

Boss already selling shares

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