[Market Highlight] Lotte Fine Chemical Surges Over 6% on Earnings Recovery Expectations

Lotte Fine Chemical showed strong performance in early trading on September 18. Investor sentiment appears to have improved on the back of expectations for a rebound in earnings from the securities industry.

As of 10:14 a.m. on the Korea Exchange, shares of Lotte Fine Chemical were trading at 48,800 won, up 6.67% from the previous session. The stock opened at 47,600 won and at one point during the session climbed as high as 50,300 won.

On the same day, Hana Securities raised its target price for Lotte Fine Chemical from 50,000 won to 60,000 won, stating, "The company's third-quarter operating profit is expected to reach 25 billion won, up 142% year-on-year and exceeding the consensus of 22.4 billion won." The analyst explained, "This is because the large-scale regular maintenance costs reflected in the previous quarter's operating profit have been removed, and the average price of ECH (epichlorohydrin) in the third quarter rose by 20% from the previous quarter to 1,533 dollars per ton, reducing the scale of losses."

Shinhan Investment also selected Lotte Fine Chemical as its top pick in the chemical sector, forecasting, "The company will show a differentiated stock price trend thanks to the accelerated turnaround of the ECH business and the resolution of the holding company discount."