this is the price of naphtha which accounts for 60%-70% of their material cost. Drop of 75%. Their total cost of goods sold should drop by 75% x 60% = 45%. So say this quarter the cost is 1.6b. For the same volume their cost should drop by 45% for next quarter = RM 720m- ish. THAT IS GROSS PROFIT.

Spot on. Push out the retailers. We are sitting on small pile of shares available for sale. Supply < demand and price goes up naturally

Yes. ONly top holders can buy this much. Let me tell you, the retail investors were scared the shit out of their pants when it dropped to 1.50 and most ran off. Only big players are able to buy these many shares. Non other than EPF / LOTTE CHEM KOREA

Broken with piece of cake. RM 1.86 here we come.

1.67 has long been the resistance. if this is broke, 1.86 is next ya. scroll down here to see: https://www.isaham.my/stock/lctitan

If extension for public spread, they still have to do something. I'm looking at RM 3 as fair offer with discount.

This is one of those shares you can sleep well with. Buy low. around 1.6x is good entry price.

Say so much no use. Last chance to come on board. Traders will miss out profits. GLTA

Deadchicken you’re dead right. Why would they not privatise at this price?

Philip i think the logic behind privatisation is to take advantage of an undervalued asset. But you do have a good point of trust issues in the future. Nevertheless it is an option on the table.

https://cdn1.i3investor.com/my/files/dfgs88n/2020/04/08/1513430590--1854234938.pdf

We are essentially less than 3months away from likely privatisation. Good Luck to all shareholders!

"As announced on 22 January 2020, Bursa Securities has vide its letter dated 21 January 2020 approved a further extension of time of 6 months until 23 July 2020 to comply with the public shareholding spread requirement pursuant to Paragraph 8.02(1) of the Main Market Listing Requirements.

The Company wishes to inform that it is taking action to address the shortfall in the public shareholding spread and will provide updates at the appropriate time."

Correction: IF the revenue is 1.4b, their naphtha cost should be roughly 700m from historical level.

Now i have more time to read through the announcement. I spotted a key giveaway the company has given. Please read carefully. They are the key supplier for Polypropylene in SEA. This is used for Plastics and Nonwoven fibre for masks, medical coat. Their Cracking outputs are propane and ethene. Ethene can be used for making ethanol which is a key ingredient in the hand sanitiser. So despite the global slow down in consumption, their products are largely hedged against the fact that there are alternative consumptions for them.

Please take note that Mask fibre providers like Ocean Cash are getting their materials from Propane. Instead of investing in Coronavirus related stocks, why not invest in stocks that benefit in both coronavirus and non-coronavirus Era? Which is Lotte Chem. If a vaccine is announced - ALL coronavirus related stocks like Topglove, careplus, Oceancash - They will crash to bottom. But only Lotte Chem will do well in both.

Quote: "To support the Government’s initiative, the Company has sponsored its Polypropylene, a type of
polymer product, which is one of the raw materials used for production of face shields and throat
swabs for COVID-19 testing procedure." - This shows they're the raw material supplier for PPEs.

Also, take note that the company issued a separate announcement to address the public shareholding spread issue which is currently at 23.97%. Do remember the case of HLCAP which was then suspended after not meeting the public spread requirement? LOTTE Chem is international company and they will be smart enough to want to avoid getting suspended. So there are a few options
1) Issue shares to further dilute the shares
2) Privatise
3) Major shareholder selling down their shares.

Option 1 - Do they have to issue the shares? Issuing shares are for companies that are in dire need for money and that are likely running out of debt options. The company stated it is sitting on NET CASH 4 Billion (Not by me, by the CEO). Would the company need more money to issue the share? Obvious No

Option 2- Major shareholder selling down their shares. To be honest. If they sell down their shares, i will be selling together with them because obviously that means they don't see the value the company as i do. But they won't obviously they will not sell down their shares that is like taking RM 1 and giving out RM 4 deal. Obvious nono.

Option 3 - Privatise. I think it is very likely possible. Due to - low public spread (they need RM 840 million at current price to take it private for a company that has nett asset of RM 12 billion). Only 24% to buy up unlike Genting which is 55% publicly owned.

So in near term, we are looking at privatisation deal. If not, we are going to enjoy the huge profits coming in the next few quarters due to low oil price. This is the best basket in whole klci. Naphtha price is 50%-60% of their raw material prices. If they sell 1.4B, it will be 700b from naphtha. Now naphtha has dropped 75% - That is a good RM 525 translated into Operating profit. Remember. The Q1 quarter prices were the actual Q1 prices (No lagging factor) The Q1 cost of materials were lagging behind due to the previously bought pricing.

So we are looking at RM 500m+ operating profit the next quarter. How much the company is valued at is up to your imagination.

Cheers.

Tmr 1.50? Lets hope no more 1.50 man. We want 1.80 lvl alreaydy.

Their cost next quarter is down by 50%. From 1.6b to 800m. You can do your own calculations how much they will earn.

Tualp. Short term thing, dont worry. Hold it i promise RM 2 by end of the year.

Can enter at RM 1.40.

Guys chill out. 150m is not much. Next few quarters will be RM 200m+ making it 1b profit company.

it'll drop, then gain back next few months.

This QR is going to be very bad. Due to lagging factor of high naphtha price and also actual lower selling price last QR. But the following Quarters are going through the roof. Be prepared for the worst QR in Lotte's history.

the king is back

Si3nz why?

Low volume today -> no more seller -> time to breakout?

Actually you see the top 30 shareholders have sold down in annual report from 2018 to 2019. So i believe they're actually doing the same when the price rebounded because they didnt have a good experience the past 2 years (understandable)

korea lotte up 3.7%!!!

Lai liao tmr I’m coming in

now there's real war between buyer and seller. 1m buy and sell at 1.55!

hey jackson, how do you check its up 6%?

deadchicken you you have reference for high pp pricing?

Lotte Chem Seoul, LG Chem, all up

someone pressuring but its holding up quite well!

Because of high volumes in the past 3 days when retailers entered, some play with contra and need to sell. But overall I see the price supporting well and should monitor closely for the rest of the noon. Hopefully can end 1.65 today

people who bought at lower prices are taking profits

Yes after mco more masks will be needed. The real spike is yet to come

Poor Chua Seng Sam held from RM 4 in 2018 to RM 1.60 now..

A lot of masks will be needed after the mco and usa opens on 1st May. Everyone needs masks everyday. If half the world is open, everyone needs to wear masks. Say 2 billion a day. That’s 10 times of China’s current daily production, which is not enough. They need to make production 10 times higher

Thanks borntospeculate- finally someone who is logical and making sense with words

Moneyfind, this is a forum for sharing views. All opinions are welcomed :) Wish you luck with trades

It’s good for lctitan. Global petrochemical shares rose. Lyondellbasell, Braskem, lanxess.

Actually I don’t like high volume because it means more people are buying this share at cheaper prices when it increases in the future. These people who hold cheap shares can throw the prices and will impact the rising share prices. If the volume hits high at higher prices I’ll feel better.

epf not stupid they also know when to buy low. They becoming substantial holder soon

Go luxchem or genting

7000 lots watching movie now

Shh deadchicken, ownself buy first..

Gemini, don't be sour ya. :)

Buy in before epf announce leh!

EPF becoming substantial holder, announcing next week

ya. We go back. I'm pushing it.

Yes Agree Gohku. Up so much. http://www.100ppi.com/mprice/detail-419823.html
https://www.echemi.com/productsInformation/pid_Seven1855-propylene.html