MAYBANK IB Research has downgraded its call on Lotte Chemical Titan Holdings Bhd (LCT) to sell from hold with a reduced target price (TP) of RM1.70 from RM2.85 previously, following the company’s weaker financial year 2019 (FY19) results.
LCT’s net profit eased to RM439.73 mil in FY19 from RM783.33 mil a year earlier and its revenue fell to RM8.48 bil from RM9.24 bil previously.
The company, which engages in the ownership and operation of polypropylene, polyethylene and aromatic plants as well as ethylene crackers, also saw its earnings per share decline to 19.35 sen from 34.46 sen previously.
In a research note today, Maybank IB Research said LCT’s results were within the research house’s expectations.
“We cut our FY20-21 earnings per share (EPS) estimates by 33-37% and we now project LCT’s FY20 EPS to drop 38% on higher maintenance days, presently low spread and impending stiffer local competition,” it said.
The research house also projected that LCT’s project in Indonesia would exhaust the group’s cash pile in FY21-22.
At 11.06am, LCT declined 15 sen to RM2.08 with 2.21 million shares transacted. – Jan 31, 2020, Bernama
