[Click eStock] "Lotte Chemical, Undervaluation Being Resolved"

[Asia Economy Reporter Park Jihwan] Daishin Securities evaluated on the 30th that Lotte Fine Chemical is expected to record an operating profit of 31.5 billion KRW in the third quarter of this year, a 7.2% decrease compared to the previous quarter, and that it has entered a phase where the undervaluation trend is being resolved in the mid to long term. Accordingly, they maintained the investment opinion of 'Buy' and raised the target price by 10.42%, from the previous 48,000 KRW to 53,000 KRW.

On the same day, Han Sangwon, a researcher at Daishin Securities, said, "the stock price rose 27% over one month due to expectations for AnyAddy (additives) driven by the growth of the alternative meat market," adding, "Although the contribution to earnings is still minimal, it is necessary to pay attention to it as a growth driver in the mid to long term."

The operating profit in the second quarter was 33.9 billion KRW, a 33.5% decrease compared to the previous quarter, which met market expectations. It is analyzed that the supply and demand conditions worsened due to the resumption of operations at the Chinese competitor (Haili)'s facilities, which had experienced operational disruptions amid weak epoxy demand caused by COVID-19, affecting the chlorine-based ECH segment. Caustic soda also continues to experience a decline in selling prices that remain high compared to regional market prices. The operating profit for the third quarter is expected to be 31.5 billion KRW, a 7.2% decrease compared to the previous quarter.

Researcher Han Sangwon explained, "Industrial mesellose and hesellose products have seen a decrease in sales volume due to demand contraction caused by the spread of COVID-19 in major export countries such as Europe and South America, but the most profitable product groups, including Anycoat and AnyAddy, continue to maintain steady demand growth, resulting in increased sales."

This content was produced with the assistance of AI translation services.