[Featured Stock] Lotte Chemical Weakens on Q2 Earnings Slump and Negative Outlook... New Low

Lotte Chemical is weak due to poor second-quarter earnings and a negative outlook this year. It recorded a 52-week low during the trading session.

As of 9:25 a.m. on the 9th, Lotte Chemical is trading at 82,000 KRW, down 7,400 KRW (8.28%) from the previous day. During the session, it fell to 81,600 KRW, setting a new 52-week low.

This decline in stock price is attributed to the poor second-quarter earnings. Lotte Chemical announced that it recorded an operating loss of 111.2 billion KRW in the second quarter, widening the deficit compared to the same period last year. Sales during the same period increased by 3.4% year-on-year to 5.248 trillion KRW. Lee Ju-young, a researcher at LS Securities, analyzed, "Lotte Chemical's second-quarter earnings fell significantly short of market consensus (average securities firm forecast). Although the profitability of basic and advanced materials improved due to the seasonal peak and expanded spreads of major products, inventory valuation losses caused by the drop in naphtha prices and opportunity loss costs due to maintenance of major overseas subsidiaries' facilities occurred."

There is a forecast that the industry recovery is slow. The researcher said, "The chemical industry recovery is delayed compared to expectations," adding, "The biggest obstacle is that there is still no confirmed economic recovery signal from China, the main export country."

Securities firms have consecutively lowered Lotte Chemical's target price reflecting the delayed industry recovery. LS Securities lowered it from 150,000 KRW to 120,000 KRW, NH Investment & Securities cut it from 115,000 KRW to 95,000 KRW, and Shinhan Investment Corp. reduced it by 24% to 130,000 KRW from the previous target.