Kiwoom Securities announced on the 10th that Lotte Chemical's operating profit for the first quarter was 6238 billion won, significantly exceeding market expectations.
Kiwoom Securities presented a target price of 460,000 won as a 'Buy' rating on Lotte Chemical.
According to Kiwoom Securities, Lotte Chemical's first-quarter operating profit exceeded market expectations due to improved performance in all business sectors.
Lotte Chemical's operating profit in the olefin division was KRW 311.3 billion, turning a large surplus compared to the same period last year. This is because Daesan crackers were restarted, which resulted in an increase in volume and a decrease in raw material purchase costs. In addition, the continued strong PE/PP spread due to plant shutdowns of competitors in and outside the region is another factor that was able to turn to the black.
The operating profit of the aromatics division was 39.9 billion won, a turnaround from the same period last year. Profitability of Pakistan's TPA facilities has improved, and margins of its flagship product, PIA, have expanded. Kiwoom Securities expects Lotte Chemical's second-quarter operating profit to reach 646.8 billion won, maintaining its upward trend compared to the previous quarter.
Reporter Lee Dong-hoon usinvestmentidea2020@gmail.com
