Yes, final Q expect profit to be above 200mil

this company's profit depends on pricing of petrochemicals and naphtha price, capacity is already fixed until they complete the indonesia project. if you think every quarter will show increasing revenue and profit regardless of market situation and plant turnaround schedules, you are looking at the wrong company and shouldn't have bought in the first place.

This special distribution will be
independent of its dividend policy and its Board of Directors upon closing of the financial year will
determine the subsequent final dividend payable for FY 2021. Expect another round of dividends when Q4 results are released

surprised that income tax is still 100mil similar to Q2. otherwise everything else expected due to plant turnaround and compressed Q3 gross margin to 7%. Q4 gross margin should be back above 10% with the price increases these few weeks.

Q3 QR probably 100mil +/-. Q4 is the exciting QR to look out for with the surge in Petrochemicals price in the past few weeks.

product spread already drop to 2019 levels. not looking good.

Why management so shit? Gross profit so high but lose it all from hedging. Ask management go join hin leong la if they like to speculate so much

Yes, the point made is that LCT in Malaysia will be running full in Q2 as a result regardless of demand conditions. Although, I agree that calling it phenomenal is pushing it.

In plant news, South Korea's Lotte Chemical had shut its naphtha-fed steam cracker in Daesan from May 15 to June 23 for annual maintenance.
https://www.spglobal.com/platts/en/market-insights/latest-news/petrochemicals/051721-asia-petrochemicals-key-market-indicators-this-week

@enning22 fyi

forex is in their favor too for Q1. forex gain on their usd borrowings alone shld be close to 30mil already for Q1.

the margins are cyclical, but the volume tonnage is growing. Just look at their annual report and you can see their products in everyday life.

@taihai the majority shareholder 75% is Lotte Chemical Group in Korea. they do not trade their shares.

http://www.businesskorea.co.kr/news/articleView.html?idxno=60966

these data are from market research providers like ICIS, SSESSMENTS, IHS, ChemOrbis, etc. You need a paid subscription to see detailed pricing on polymers and naphtha.

last quarter polymer asp at 1100, naphtha at 400. now polymer asp at 1300 and still breaking new highs, naphtha at 560.

net margin even improved by USD40/MT

results may not have met expectations, but you can't deny the petrochemical upcycle is here.
the profit margin from operations is back to 2018 levels and at only 80% operating rate, there is room to improve next qr. Impossible to drop below RM2 anymore in this environment.

anyway with Market cap of 5.8bil, net cash of 4.2bil, and cash generating ability of above 1.1bil every year, there is very limited downside.

the share price always drop after qr release. maybe because it has been red Y-o-Y for the past 4 quarters.
Perhaps next quarter only the price go up after qr release since it will definitely be green Y-o-Y

I think friday.

should be very good, i think at least 225mil

although i do hope to be pleasantly surprised

titan3322
18sen EPS for FY2020 is quite unrealistic.
I would estimate Q4 to report around 9 - 10sen EPS. which would be 9sen/share for FY2020.

I think FY2021 can increase to above 33sen EPS

https://pulsenews.co.kr/view.php?year=2020&no=1222342
probably as part of the group wide management reshuffle

if the polymer-naphtha spread can maintain current level(>$800/MT) for few more months. RM6 no problem.

PE/PP - Naphtha polymer spread have reached 2017 peak margins.

Current PE is only 36

Fact is that if you do a simple search of aurelia gloves online, you can’t find any in stock for below USD250/1000pcs or USD25/box

@Nepo

https://scc.listedcompany.com/misc/presentations/20200729-scc-presentation-am-2q2020.pdf

See page 30 to page 34 to understand the spread for PE, PP, Benzene, Toulene, butadiene(BD), etc.

@Nepo, not sure what you mean by linked to covid-19.
70% of its products is the one having good spread.
30% is still having negative or at breakeven spread.
combine this with bad plant turnaround timing and q2 result actually makes sense.

anyway spread is still decent now at 550/MT, if the spread maintains until end of september, next qr will be better.

hng33,

https://www.icis.com/explore/resources/news/2020/05/01/10503530/butadiene-is-the-weakest-link

butadiene is at multiyear low as automotive takes up 70% of butadiene demand. Good demand for gloves will have minimal impact on butadiene price. Please stop confusing people by trying to link gloves stocks to lctitan. Butadiene is only a side product of lctitan, their core offering is still PE/PP.

https://www.lottechem.my/company/integration.asp
You can see butadiene capacity is only 100KTA, compared to total PE/PP capacity of 1015KTA

Nepo, petrochemical is not just PE, PP. the feedstock is naphtha, about 70% output is ethylene and propylene further processed into PE/PP giving good margins. But 30% output goes to aromatics like butadiene, benzene, toluene which have minimal or negative margins at the moment.

their plant turnaround timing in march/april was also bad as they weren't able to immediately benefit from naphtha price drop as they still need to clear the feedstock that they bought in february/march. When they start buying new feedstock, naphtha had already rebounded 100usd from the lows.

results are slightly below expectations, slow demand in april and march plant turnaround delayed the impact of margin expansion. downside risk should be limited with the swing to profitability, i expect price will only move above 2.50 after next qr is released which will see the full 3 month impact of margin expansion if oil price and product ASP remains relatively stable.

yes, it's no wonder they are reluctant to issue new shares to meet the public shareholding spread when it is so undervalued.

still on track for operating cash flow of 1bil.
No reason company should be valued below 5bil when they have 4bil in the bank and ability to generate 1bil cash every year.

writedown or reversal of writedown is just correcting inventory to current market prices.

At any 1 time the company should have around 1 month of inventory, if they do not record the reversal now, it will be recognised as profit when the goods are sold and delivered. writedown or reversal of writedown is just earlier recognition of inventory value to reflect current market prices.

https://www.polymerupdate.com/news/Home/27Jul2020/1069515/butadiene-prices-gallop-higher-in-asia

Good news for lctitan, slightly negative news for nitrile glove makers

Polymer spread for 2019 is same as 1H2020. around 481-483/MT as seen in AGM video.
In 2019 core profit is 262mil on polyolefins. Can we expect 131mil core profit for 1H2020?
1st Qr core profit is 127mil loss. 2nd Qr profit = 131mil+127mil?
Either way, 1H2020 unlikely to be loss making as a whole, so Q2 should be at least 127mil core profit, which would be the best core profit seen since Q3 2018.

in fact naphtha going up could be even better for quarter results ending june 2020. Previous QR had a writedown on inventories of 81,396. WIth their naphtha cost at estimated average of 200USD for this quarter. There should be a reversal of write-down for this upcoming qr. ASP for PE and PP have been going up steadily as well, both have increased by about USD100/MT in last 4 weeks.

yes, essentially 1st quarter only operating in Jan and Feb at 60-70% of full 3 months. However margin in Jan and Feb was bad. This compounded with the oil price crash( writedown of naphtha inventory) resulted in loss.

they are under essential industry, no limitation on production even during 1st phase of MCO( however coincide with their scheduled plant turnaround which completed in March). Full production for April onwards.

If you‘Ve been track naphtha and pe/pp prices, its obvious lctitan will do well for qr ending june. However, price will usually only move once good results are confirmed and insiders leak this info. Similar case for gloves counters in march to may

looks like many collecting at 1.82 today. back to RM2 by next week and RM2.50 in following week when insiders confirm good results for Quarter ending June

If you have bought with cash, unless oil price spikes, just hold until qr is out. If you are on margin, should reduce some as the whole market sentiment is bad, Dow futures are down already and expected to continue dropping through the week. Don’t be caught having to force sell if it temporary dips to 1.5 or 1

I believe they will not go private as they have yet to utilise the ipo funds for the Indonesia LINE project. A main chunk of the IPO prospectus was on the Indonesia project. Hence, as they have not fulfilled their promise on the utilisation of ipo funds, they will not go for privatisation.

Crackers that use Ethane as feedstock are also increasing prices. https://www.icis.com/explore/resources/news/2020/06/04/10515772/icis-webinar-pe-demand-surprisingly-strong

LCT already locked in end June raw material since mid-May. https://www.brecorder.com/2020/05/16/597429/asias-naphtha-crack-falls/

with the rise in naphtha past few days(estimate to impact them after mid July or August), they have ample time to increase product prices. Especially products sold to those customers used in PPE production.

Bargain! Ceramic mold business sure continue to grow well with glove counters. Then utilizing the cash flow to diversify into property when land prices at all time lows. Double up within 1 year likely!

https://www.thestar.com.my/business/business-news/2019/11/22/iwh-inks-rm371m-financing-deal-with-cimb-bank-for-bandar-malaysia

worst case scenario, ekovest landbank increased by 100+ acres;
best case scenario, IWH with ICPS and cash in hand, is now able to fund BM project; converts ICPS to ekovest shares, then appoints ekovest as main developer for BM, since IWH now owns 20+% of ekovest after conversion. Suspect this is LKH's plan.
This is not a case of LKH siphoning money out from public listed to private holding company as more than 80% will be fulfilled in newly issued ICPS. If ekovest does not do well in the future, it is also a bad deal for IWH to sell the land and receive ICPS valued at RM1(already a 25% premium to existing share price)