Following a sharp 18% fall from RM1.64 in September, Lotte Chemical Titan Holdings’ share price has subsequently treaded sideways before closing at RM1.36 during the week’s market close.
On Kenanga’s chart, the stock is poised to make a technical rebound backed by bullish technical signals arising from the
appearance of an upward Parabolic SAR trend and the share price crossing back above the lower Bollinger Band. Hence, the research house believes that the stock will likely climb and challenge the resistance targets of RM1.55 and RM1.65.
On the other hand, the stop loss price is set at RM1.20 (representing a 12% downside risk). Business-wise, the group – which is principally involved in the manufacture and sale of polyolefin products as well as olefins & derivative products – posted a net loss of RM145.9m in 2QFY22, down 238% QoQ from the preceding quarter as it was hit by increased input costs and losses incurred by associate Lotte Chemical USA Corp. This brought its first half 2022 bottom line to a net loss of RM41.9m from a net profit of RM822.3m previously.
Valuation-wise, the stock is currently trading at Price/Book Value multiple of 0.24x based on its book value per share of
RM5.59 as of end-June 2022.
