Lotte gains on reports of bullish outlook

PETALING JAYA: Lotte Chemical Titan Holding Bhd’s shares rebounded as much as 11.7% yesterday after research houses gave bullish view on the petrochemical unit’s outlook.

At market close, its shares were up by 42 sen or 8.9% to RM5.12 on some 26.94 million shares traded, giving it a market capitalisation of RM11.82 billion.

Lotte’s warrants are among the active stocks with gains between 12.5% and 80%, except for LCTITANCB and LCTITAN-CF, which fell 16.7% and 11% respectively.

JPMorgan Chase & Co initiated coverage on Lotte with an “overweight” recommendation and it is expected to reach RM7 within a year, while HSBC projects the stock to trade at RM7.60 in the next one year.

Maybank Investment Bank Research has also set a target price of RM7.85 for Lotte with a “buy” call.

Lotte was listed last month at an initial public offering (IPO) price of RM6.50, halved from its initial price of RM8 due to weak market demand.

The shares tumbled to a low of RM4.14 on Aug 1 after it announced a 71.9% fall in net profit for the second quarter ended June 30, 2017 against RM404.03 million in the previous corresponding period.

The drop was dragged down by an 8.5% increase in cost of goods sold, arising from high inventory cost carried forward from turnaround activities in the first quarter as well as higher unit production cost due to water supply interruption last April.