[Featured Stock] Lotte Chemical Expected to Return to Profit in 2Q... Up 5%

Lotte Chemical is showing strong performance in early trading on the 28th amid expectations of a turnaround to profitability in the second quarter.

As of 9:48 a.m. on the same day in the KOSPI market, Lotte Chemical is trading at 186,100 KRW, up 5.20% from the previous trading day.

On this day, Yuanta Securities, in a stock report, forecasted that Lotte Chemical is expected to return to profitability from the second quarter and raised the target price by 7% from the previous 290,000 KRW to 310,000 KRW.

Hwang Kyuwon, a researcher at Yuanta Securities, said, "Since February, the reopening effect in China has become visible, showing a sequential recovery starting with propylene (a general-purpose automotive bumper material), followed by butadiene (home appliance exterior materials), and then ethylene (agricultural film)." He added, "As international oil prices have fallen, the raw material cost burden of NCC facilities has also decreased."

Researcher Hwang further analyzed, "Production volume is expected to increase from 40,000 tons at the beginning of last year to 80,000 tons by the end of this year, and new large clients are expected to be secured besides Samsung SDI." He added, "Operating profit in this business segment is expected to increase by 35% year-on-year to 114.4 billion KRW."