[Click eStock] "Lotte Chemical, 1Q Operating Profit Expected to Reach Record High... Improvement Across All Sectors"

[Asia Economy Reporter Hwang Yoon-joo] Kiwoom Securities maintained its 'Buy' rating and target price of 117,000 KRW for Lotte Fine Chemical on the 1st, stating that the company's operating profit for the first quarter of this year is expected to once again break the record for the highest quarterly figure since its establishment.

Lee Dong-wook, a researcher at Kiwoom Securities, said, "Lotte Fine Chemical's operating profit for the first quarter of this year is expected to reach 87.9 billion KRW, a 147.4% increase compared to the same period last year, and it is expected to once again break the record for the highest quarterly figure following the previous quarter."

The researcher explained that performance improved across all business divisions. Regarding the chemical division, he said, "Key products in the chlorine series, such as ECH and caustic soda, are expected to continue their strong performance," adding, "While deep-sea demand from regions such as the Americas and Europe surged, regular and irregular maintenance occurred at regional ECH plants, and glycerin prices soared again."

Regarding the ammonia series in the chemical division, he assessed, "The volume reduction factor due to supply disruptions of urea in the previous quarter was limited, while the price of urea solution rose significantly compared to the previous quarter."

He also forecasted that the green materials division would maintain solid profitability. The researcher stated, "Despite entering the seasonal off-season in major downstream industries and the continued burden of high logistics costs, prices were raised, and a favorable exchange rate effect for export-oriented companies persisted."

He analyzed, "Domestic demand for caustic soda is expected to grow at an average annual rate of over 5%, from 1.28 million tons last year to 1.6 million tons by 2025, driven by increased demand for cathode materials and lightweight materials (aluminum)."

He added, "Chlor-alkali production capacity worldwide is expected to record the lowest increase in the past 25 years over the next 5 to 6 years due to the closure of aging facilities in North America and environmental regulations in China and India," and "The supply-demand tightness will continue until 2027, allowing the company to enjoy a reflective benefit."

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