[Click eStock] "Lotte Chemical Begins Vertical Integration of Hydrogen Business"

Lotte Chemical Begins Establishing Hydrogen Storage Tank Production Facilities
Meritz Securities "Maintains Lotte Chemical Target Price at 350,000 Won"

[Asia Economy Reporter Gong Byung-sun] Lotte Chemical has begun preparing for vertical integration in the hydrogen business by establishing production facilities for hydrogen storage tanks.

According to Meritz Securities on the 8th, Lotte Group will participate in the launch of the Hydrogen Companies Council of the top 10 domestic groups on the same day. Lotte Group's hydrogen business is handled by Lotte Chemical, which has set a guidance of 3 trillion KRW in sales from the hydrogen business by 2030.

To achieve 3 trillion KRW in hydrogen business sales, Lotte Chemical plans to build hydrogen tank production facilities. Noh Woo-ho, a researcher at Meritz Securities, explained, "The core competitiveness of Lotte Chemical's hydrogen storage tank business lies in the ability to mass-produce all products and reduce costs through large-scale production," adding, "It can also respond to various upstream demands, such as classification based on high pressure."

The mass production facilities will be made using Dry winding technology, which is advantageous for large-scale production. This technology is known to reduce costs and enable mass production compared to wet application facilities. Meritz Securities expects Lotte Chemical's production capacity to expand to 100,000 units by 2025 and over 500,000 units by 2030. Sales from hydrogen tanks are projected to reach 600 billion KRW by 2030.

Researcher Noh said, "The key keyword for Lotte Chemical's hydrogen business is vertical integration," and added, "As a business operator managing the entire value chain, it holds significant potential."

Meanwhile, momentum related to hydrogen is also emerging. The government is about to announce the Hydrogen Economy Activation Roadmap 2.0, which is expected to concretize the blueprint for the domestic hydrogen economy. From the 8th to the 11th, the Hydrogen Mobility+ Show will be held at KINTEX in Goyang, Gyeonggi Province, with 150 companies participating.

Accordingly, Meritz Securities maintained a 'Buy' investment opinion and a target price of 350,000 KRW for Lotte Chemical. The closing price on the previous day was 249,000 KRW.