I dont know how more defensive we can be. Stock with dividend, net cash, no borrowings, benefit from low oil price, spread / ASP healthy, strong parent company, established business with good track record. Lotte Chem is top 30 worldwide. They are not the biggest but they are definitely not small.

If you invest into an unknown company with good financials, you might be worried about directors integrity of even business disappearing overnight. This you should be able to sleep well with

Even if market tanks LCT will hold or will come back for sure.

Last time they make a meaningful profit was Sept 2018. It just shows what kind of management you got. The boss takes 500m in airbus bribes instead of saving the company this money and company doesnt have good results after Sept 2018. For a company this size, you cant say he didnt foresee this potential going concern issue with auditors when everyone knew what happened to oil prices. He even delayed reporting financials by 1 month for Q1 and still bad result.

As an investor, I think this is incompetence. I think SK Network might change their mind on investing a small portion. I think that banks would be worried to lend them anything with this negative auditor red flag. If your currently holding the share, you have to prepare that a rights issue will eventually come.

Its not that the business is not viable, its the management.

So he takes more than 500m in bribes by overcharging the company, get off 'scot-free' and now the company needs money and he's asking you all to put in more money ? Why not just give back all that money he took and maybe you guys can do without further dilution now.

Airbus confirmed it but MACC cleared him. You wanna put more money in his hands ? Do they even have a plan for return to profitability by when and how this rights issue funding will be spent

He is probably got a margin call today, so im sure he will have to use some of that bribe money to support the share and likely he will get another margin call tomorrow.

Thanks for sharing Andy i read that earlier.

Good that everyone here is positive, the forum feels more constructive and refreshing compared to some other forums

Shows that our market is full of insider trading. Announcement of financial Q2 is 2 weeks so ppl starting to buy already. So i expect price will continue to move.

Another example is that ppl knew to buy Topglove before the super result.

When it was listed at 6.50, LCT makes about 400-500m per quarter. Since then it has come down to about half or less thats why the price dropped. This is consistent with the industry as PCHEM has also dropped profitability in 2019.

Topglove make 300m a quarter everyone jumping and screaming. If this can go back to IPO profit level hopefully in Q3 ( as Q2 profits will not be able to fully recognize the increase in ASP ), imagine what the price could be

Every industry is cyclical so there are good times and they are bad times, at this price can only be upside

Butadiene

I have some info from plastic industry that good profit will only from q3 onwards coz prices went up in may and there is a price lag and orders taken in advance. I expect a profit for sure for q2, let's see.

Nothing much to worry at this level

Nesty, cash per share is the floor price. Even you use any super financial theory, if they discount cash, discount the theory.

Unless of course, you think that this is another Wirecard fraud. And on this, we get to fall back on Lotte Group reputation

There is a link on the announcement for the e invite. Please share for those who are going, as I wont be joining.

Suayexpert is back.

If prices go up for Naphtha, ASP should go up as well. Anyway, reporting quarter is for Apr May June 20. If it goes up now it will only affect next quarter and i just checked the spread earlier it is still healthy.

nesty, just hold on tight and check back later. LCT result should be out by end of next month ( normally its 1 mth after, i dont knohw they they are so efficient ) but PCHEM will be 2 mths after closing. Both have same financial year end.

https://www.thestar.com.my/business/business-news/2020/06/22/foreign-funds-offload-rm6007mil-off-bursa-for-18th-straight-weeks#cxrecs_s

Even if KLSE dropped 2k points and everything goes to bad due to 2nd wave of covid, net cash per share is 1.71 at least discounting upside of the business. How wrong could you go. For other good counters, if market is bad.. price can drop and you cant predict due to so many variables, and its hard to establish the bottom.

For this, you are very close to the bottom. Even if it does, you can be sure that it will come back coz its cash.

Nepo, to console you. Just like you sold your old property at a good profit and like all property investors i know, they went to buy something else. And normally that something else is already inflated like what happened to everyone who bought property past 3-4 years.

You might have gotten out and bought a better stock, but looking at the overall market most things have also taken a beating. For example, pchem was 7 bucks recently when LCT was 1.85 i think or lower. look at it now.

Investors will win consistently in the long term whereas traders wont. You tried trading before im sure, i will call it gambling or luck whether its stocks, FX, crypto, commodity. Even ppl who claim that they are skilled i dont see them doing better than long term investors as they cannot predict when it goes up in larges spikes.

What dumpinglee did, im also guilty of which is the worst. Buy for short term but dont cut loss when it hits your target and hugging the stock to death. And now when its recovering from the the bottom you cut loss. If it goes back to above his cost in one day, he still curse and say he made the right decision to console yourself but he was not consistent in his strategy. If he had cut loss in the first place when it dropped 30% from RM4, and bought in again at 1.20, he would have made.

I wanted to raise this earlier. So if it was scheduled maintenance doesn't it mean that the first quarter small operating loss of 30m-40m ( after adding back non cash items ) was partly due to this instead of the reasons analyst gave ?

Analyst didn't even mention this although the Korean CEO said this

Short selling will hit glove counters more coz more retailers. Mostly funds holding LCT and they are not on margin

There was an article stating that full capacity since Apr. I think first Q they had some disruption either maintenance or internal reorganization of production

Thats the plan. Hopefully when this happens the stupid funds will realize what an idiot they have been and start buying back and pushing the price up. Thats when we should sell

Are you sure you guys are reading this correctly. Looks like ESOS conversion to me. I dont think stingy fella is gonna spend 5m to buy his own shares.

Nepo dont worry. If you hold 70% of your subsidiary and its listed you wont be trying to siphon profits out. In fact, you might consider doign the opposite to boost share prices since its so far below IPO, so that in the future if you want to raise more funds you can do it with a higher price

Futures up 899. Tomorrow will be green

I like suria it's a good stock and made money many years ago also from this. But trade vol will take a while to recover and the JV development won't material soon and bumi run sometimes gives me some worry.

I could be wrong but I'm more confident on recovery here

Yah made small profit although dividend next month coz im more confident with this counter. I went in suria 90. Sold 1. Didn't make much but it's ok

Yes nepo remember I said today might drop coz I expect this to take a while for market to drop. Us futures now down. But keep in mind that cash per share value so it's only a matter of time it comes back. I sold my suria last week to add more here and suria dropped today too

I was thinking to buy so other stocks that dropped a fair bit today but went back to added more here

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.