[Featured Stock] Lotte Chemical Surges Over 9% Intraday... Breaks 190,000 Won Barrier

[Asia Economy Reporter Oh Ju-yeon] Lotte Chemical's stock price rose more than 8% intraday, reaching 190,000 KRW. Although the second-quarter earnings fell short of market expectations, buying surged as forecasts suggested a significant improvement in performance starting next year, driven by anticipated demand recovery related to COVID-19.

On the 10th, Lotte Chemical's intraday stock price recorded 193,000 KRW, up 9.97% compared to the previous trading day. As of 10:38 AM, the stock was trading at 189,500 KRW, up 7.98% from the previous day.

On the same day, securities firms analyzed Lotte Chemical's second-quarter results and assessed that they fell short of market consensus. However, they unanimously agreed that earnings improvement is expected from next year.

Lee Dong-wook, a researcher at Kiwoom Securities, explained, "Lotte Chemical's operating profit for the second quarter this year was 32.9 billion KRW, below market expectations, due to demand slowdown caused by COVID-19 and one-time costs from the Daesan cracker accident."

He added, "The Daesan cracker is expected to resume operations by the end of this year, and from next year, when COVID-19 related demand is expected to improve, the earnings growth is projected to be significant."

Daishin Securities forecasted that Lotte Chemical's operating profit in 2021, when the Daesan plant's operations normalize, will reach 918.4 billion KRW, a 910% increase compared to this year.

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