[Click eStock] Lotte Chemical, LG Innotek, Lotte Shopping "Stock Momentum Remains Alive"

[Asia Economy Reporter Lee Seon-ae] Yuanta Securities has selected three stocks to watch this week (Weekly Hot Stocks): Lotte Chemical, LG Innotek, and Lotte Shopping.

According to Yuanta Securities on the 18th, LG Innotek is expected to have a momentum boost from the launch of new models for its main customers in September this year. The increase in camera module blended ASP based on spec upgrades within the Pro series is estimated to positively impact the second half performance. As the second half progresses, the medium- to long-term growth drivers are gradually becoming visible and are expected to act as future stock price momentum. Yuanta Securities analyst Baek Gil-hyun emphasized, "It is particularly important to note the clear medium- to long-term growth directions (such as XR, Folded Zoom) from 2022 to 2025."

Lotte Shopping is expected to record an operating profit of 81 billion KRW in the second quarter, surpassing the consensus of 60.7 billion KRW, due to improved operating results in major business units such as department stores and large discount stores. There is a high possibility of profitability improvement in the large discount store and e-commerce divisions due to eased competition in e-commerce. The performance improvement of affiliates such as Cultureworks (cinema) and Uniqlo is also positive. Yuanta Securities analyst Lee Jin-hyeop explained, "The 12-month forward return on equity (ROE) is expected to be 4.2%, and a target price-to-book ratio (PBR) of 0.45 times or higher seems achievable."

Lotte Chemical is actively participating in the acquisition battle for Iljin Material (a manufacturer of copper foil for secondary batteries), with the expected acquisition price estimated at 4 to 5 trillion KRW. The expected performance for the second quarter of 2022 is anticipated to be weak around the break-even point (BEP), with olefins and Titan underperforming, while aromatics and advanced materials remain steady. However, the chemical sector's market conditions in the second half are expected to see delayed improvement. This is believed to be due to a significant contraction in chemical product purchasing demand from regions such as China.

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