South Korean enterprises’ foreign currency borrowings are increasing rapidly. Specifically, the foreign currency borrowings of the top 100 non-financial listed companies in terms of assets increased from 10.4019 trillion won to 11.3075 trillion won in the first half of this year. Previously, the amo
The author is an analyst of NH Securities and Investment. He can be reached at yk.choi@nhqv.com. -- Ed. Although downwardly adjusting our annual OP forecasts for LG Chem in light of sluggish earnings at its petrochemical domain, we boost our earnings projections for its battery-related businesses (w
Lotte Chemical announced on Sept. 28 that it has become the first company in Korea to commercially produce a petrochemical product using naphtha based on pyrolysis oil from plastic waste.The company produced polycarbonate (PC), a high value-added synthetic resin that can resist impacts and endure he
The Bank of Korea announced on Sept. 15 that the nation's main industries including shipbuilding, automobile and semiconductor may take a hit if Russia completely blocks gas supply to Europe in the upcoming winter and the measure leads to capital and intermediate goods shortages in South Korea.A
South Korean petrochemical companies, including LG Chem and Lotte Chemical, are reducing the production of ethylene and synthetic fibers with economic and exchange rate conditions increasingly affecting their profitability.As of Sept. 5, the per-ton prices of ethylene and naphtha were US$950 and US$
South Korean petrochemical companies’ business conditions are deteriorating with raw material and product prices going up and down, respectively.Lotte Chemical recorded an operating loss of 21.4 billion won in the second quarter of this year whereas its operating profit was 594 billion won in the se
The author is an analyst of NH Securities and Investment. He can be reached at yk.choi@nhqv.com. -- Ed. LG Chemical confirmed its growth potential with full-fledged sales growth and increased profitability at the advanced materials division. The increase in profit at the division, which receives hig
The author is an analyst of NH Securities and Investment. He can be reached at yk.choi@nhqv.com. -- Ed. The refining and petrochemical industries both appear to be approaching cycle inflection points. Refining players are seeing valuation de-rating, and petrochemical companies’ valuations look to be
The authors are analysts of Shinhan Investment Corp. They can be reached at jinmyung.lee93@shinhan.com and cgh815@shinhan.com, respectively. -- Ed. Chemicals outperform the market on China demand recovery expectationsChemical companies under our coverage recorded an average one-month return of 3%, o
LG Chem announced on June 20 that it will build a hydrogen plant with an annual production capacity of 50,000 tons at its Daesan complex in South Chungcheong Province by the second quarter of 2024. The project is aimed at reducing carbon emissions from a petrochemical pyrolysis process.The hydrogen
The author is an analyst of KB Securities. He can be reached at yc.baek@kbfg.com. -- Ed. Maintain BUY We maintain BUY on Hanwha Solutions, while cutting TP by 8.0% to KRW46,000 on downward revisions to 2022E/2023E NP (attributable to controlling interests) of 17.6%/0.6% amid deterioration of profit
The author is an analyst of NH Investment & Securities. He can be reached at yk.choi@nhqv.com. -- Ed. We view Lotte Chem’s current valuation as being fully reflective of market concerns towards unfavorable industry conditions. Negatives will likely fade by end-1H22. After reaching a bottom in 2Q22 o
Petrochemical companies’ business conditions are deteriorating as the war in Ukraine is leading to continuously high oil prices, which mean an increase in their cost burden and a decline in demand for their products.At present, stock analysts are estimating LG Chem’s Q2 operating profit at 872.9 bil
The author is an analyst of KB Securities. He can be reached at yc.baek@kbfg.com. -- Ed. 1Q22 results beat consensus— Hanwha Solutions posted 1Q22 revenue of KRW2.97tn (+23.5% YoY, +0.2% QoQ) and OP of KRW157.9bn (-38.0% YoY, +87.4% QoQ), beating consensus (KRW123.8bn OP; FnGuide, Apr 26).— Despite
The Korea Petroleum Association announced on April 26 that SK Energy, GS Caltex, S-Oil and Hyundai Oilbank exported 108.99 million barrels of petroleum products in the first quarter of this year, up 20 percent from a year ago. When it comes to Q1 figures, it is the highest year-on-year increase sinc
South Korean chemical companies’ business performances are likely to deteriorate this year due to the war in Ukraine.According to FnGuide, Lotte Chemical’s operating profit for the first quarter of this year is estimated at 116.3 billion won, down 81 percent from a year ago. In addition, LG Chem’s i
South Korean enterprises are being increasingly affected by the war in Ukraine, as the geopolitical risk and sanctions against Russia are leading to soaring raw material prices.The price of nickel per ton surged 44.28 percent to US$42,995 on March 8, when the price of aluminum per ton amounted to US
The author is an analyst of KB Securities. He can be reached at yc.baek@kbfg.com. -- Ed. Maintain BUY, trim target price 7.2% to KRW283,000 We maintain BUY on Lotte Chemical but trim our TP by 7.2% to KRW283,000, as adjustments to key product spreads (e.g., HDPE, PP, MEG) lowered 2022E NP (attributa
The author is an analyst of KB Securities. He can be reached at yc.baek@kbfg.com. -- Ed. Maintain BUY, lower target price 6.7% to KRW305,000 We maintain BUY on Lotte Chemical but lower our TP by 6.7% to KRW305,000. Our revised TP, which represents 2022E P/E of 8.6x, P/B of 0.69x, reflects:(1) an inc
The authors are analysts of Shinhan Investment Corp. They can be reached at jinmyung.lee93@shinhan.com and cgh815@shinhan.com, respectively. -- Ed. 4Q21 operating loss of KRW15.7bn (TR QoQ) worse than expectedKorea Petrochemical Industrial swung to red with an operating loss of KRW15.7bn (negative s