[THE INVESTOR] Lotte Chemical has been slow in the first quarter but its operating profit will resume advancing now, said DB Financial Investment on May 3, maintaining a “buy” recommendation and 670,000 won (US$621.23) target price.
Weighed down by naphtha price surge, unfavorable exchange rate and Malay affiliate Titan’s slow performance, operating profit in the first quarter declined 18.8 percent on-year to 662 billion won, missing market expectations, said analyst Han Seung-jae.
From the second quarter, however, it will return to an upcycle, and operating profit will hike 28 percent to 809.3 billion won. It will gain from oil price rise, and Titan will be back on track as the expanded ethylene manufacturing facility begins full operations, forecast the analyst.
Revenue for the whole year will increase 9.8 percent from last year to 17.42 trillion won and operating profit by 4.2 percent to 3.05 trillion won. Although its first-quarter earnings have been unsatisfactory, for the whole year it will maintain over 3 trillion won in operating profit, said Han.
By Hwang You-mee (glamazon@heraldcorp.com)