Lotte Chemical Titan Holding Berhad (KLSE:LCTITAN) - Share price, News & Analysis

Q: What is the Fair Price of LCTITAN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

LCTITAN (MYR1.97) is trading above our estimate of [[fair value]] (MYR0.77)

LCTITAN fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	1/6
Past Performance	1/6
Financial Health	6/6
Dividends	3/6

LCTITAN Stock Overview

Lotte Chemical Titan Holding Berhad, an investment holding company, engages in manufacture and sale of petrochemical products and polyolefin resins in Malaysia and internationally.

Rewards

Price-To-Earnings ratio (6.4x) is below the MY market (14.1x)

Earnings are forecast to grow 5.94% per year

Risk Analysis

Dividend of 10.66% is not well covered by earnings

Lotte Chemical Titan Holding Berhad Competitors

Scientex Berhad

KLSE:SCIENTX

RM5.3b

Batu Kawan Berhad

KLSE:BKAWAN

RM9.1b

Southern Acids (M) Berhad

KLSE:SAB

RM508.0m

RGT Berhad

KLSE:RGTBHD

RM335.8m

Price History & Performance

Summary of all time highs, changes and price drops for Lotte Chemical Titan Holding Berhad
Historical stock prices
Current Share Price	RM1.97
52 Week High	RM2.96
52 Week Low	RM1.90
Beta	1.33
1 Month Change	-3.90%
3 Month Change	-13.22%
1 Year Change	-29.39%
3 Year Change	-32.77%
5 Year Change	n/a
Change since IPO	-69.12%

Shareholder Returns

	LCTITAN	MY Chemicals	MY Market
7D	3.1%	-1.8%	1.2%
1Y	-29.4%	7.6%	-6.5%

Return vs Industry: LCTITAN underperformed the MY Chemicals industry which returned 7.6% over the past year.

Return vs Market: LCTITAN underperformed the MY Market which returned -6.5% over the past year.

Price Volatility

Is LCTITAN's price volatile compared to industry and market?
LCTITAN volatility
LCTITAN Average Weekly Movement	3.0%
Chemicals Industry Average Movement	5.3%
Market Average Movement	5.5%
10% most volatile stocks in MY Market	11.5%
10% least volatile stocks in MY Market	2.8%

Stable Share Price: LCTITAN is less volatile than 75% of MY stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: LCTITAN's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1991	1,503	Hyun Park	https://www.lottechem.my

Lotte Chemical Titan Holding Berhad, an investment holding company, engages in manufacture and sale of petrochemical products and polyolefin resins in Malaysia and internationally. It offers high-density polyethylene used to manufacture grocery, merchandise, and trash bags; food containers; bottle caps and closures; liners for cereal and cracker boxes; plastic drink cups; dairy crates; bread trays; pails; safety equipment; house wraps for insulation; bottles for household and industrial chemicals; milk and juice bottles; and large tanks for storing agricultural and lawn care chemicals. The company also provides low-density polyethylene used to manufacture food packaging films; plastic bottles for packaging food and personal care items; dry cleaning bags; ice bags; pallet shrink wraps; heavy-duty bags for mulch and potting soil; boil-in-bag bags; coatings on flexible packaging products; and coatings on paper board.

Lotte Chemical Titan Holding Berhad Fundamentals Summary

How do Lotte Chemical Titan Holding Berhad's earnings and revenue compare to its market cap?
LCTITAN fundamental statistics
Market Cap	RM4.40b
Earnings (TTM)	RM704.02m
Revenue (TTM)	RM10.22b

6.4x

P/E Ratio

0.4x

P/S Ratio

Is LCTITAN overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
LCTITAN income statement (TTM)
Revenue	RM10.22b
Cost of Revenue	RM9.39b
Gross Profit	RM836.39m
Other Expenses	RM132.37m
Earnings	RM704.02m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.31
Gross Margin	8.18%
Net Profit Margin	6.89%
Debt/Equity Ratio	0%

How did LCTITAN perform over the long term?

See historical performance and comparison

Dividends

10.7%

Current Dividend Yield

68%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is LCTITAN undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for LCTITAN?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for LCTITAN. This is calculated by dividing LCTITAN's market cap by their current preferred multiple.
What is LCTITAN's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	RM4.40b

LCTITAN key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.2x
Enterprise Value/EBITDA	1.5x
PEG Ratio	1.1x

Price to Earnings Ratio vs Peers

How does LCTITAN's PE Ratio compare to its peers?

LCTITAN PE Ratio vs Peers

The above table shows the PE ratio for LCTITAN vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	21.5x
SCIENTX Scientex Berhad	12.6x	18.0%	RM5.3b
BKAWAN Batu Kawan Berhad	6.8x	n/a	RM9.1b
SAB Southern Acids (M) Berhad	5.4x	n/a	RM508.0m
RGTBHD RGT Berhad	60.4x	n/a	RM335.8m
LCTITAN Lotte Chemical Titan Holding Berhad	6.4x	5.9%	RM4.4b

Forward PE

Price-To-Earnings vs Peers: LCTITAN is good value based on its Price-To-Earnings Ratio (6.4x) compared to the peer average (21.5x).

Price to Earnings Ratio vs Industry

How does LCTITAN's PE Ratio compare vs other companies in the Asian Chemicals Industry?

Price-To-Earnings vs Industry: LCTITAN is good value based on its Price-To-Earnings Ratio (6.4x) compared to the MY Chemicals industry average (12.4x)

Price to Earnings Ratio vs Fair Ratio

What is LCTITAN's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

LCTITAN PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	6.4x
Fair PE Ratio	15.1x

Price-To-Earnings vs Fair Ratio: LCTITAN is good value based on its Price-To-Earnings Ratio (6.4x) compared to the estimated Fair Price-To-Earnings Ratio (15.1x).

Share Price vs Fair Value

What is the Fair Price of LCTITAN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: LCTITAN (MYR1.97) is trading above our estimate of fair value (MYR0.77)

Significantly Below Fair Value: LCTITAN is trading above our estimate of fair value.

Price to Earnings Growth Ratio

PEG Ratio: LCTITAN is poor value based on its PEG Ratio (1.1x)

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Future Growth

How is Lotte Chemical Titan Holding Berhad forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

5.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: LCTITAN's forecast earnings growth (5.9% per year) is above the savings rate (3.6%).

Earnings vs Market: LCTITAN's earnings (5.9% per year) are forecast to grow slower than the MY market (9.9% per year).

High Growth Earnings: LCTITAN's earnings are forecast to grow, but not significantly.

Revenue vs Market: LCTITAN's revenue is expected to decline over the next 3 years (-5.3% per year).

High Growth Revenue: LCTITAN's revenue is forecast to decline over the next 3 years (-5.3% per year).

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: LCTITAN's Return on Equity is forecast to be low in 3 years time (2.5%).

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Past Performance

How has Lotte Chemical Titan Holding Berhad performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-13.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: LCTITAN has high quality earnings.

Growing Profit Margin: LCTITAN's current net profit margins (6.9%) are lower than last year (9.7%).

Past Earnings Growth Analysis

Earnings Trend: LCTITAN's earnings have declined by 13.8% per year over the past 5 years.

Accelerating Growth: LCTITAN's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: LCTITAN had negative earnings growth (-7.2%) over the past year, making it difficult to compare to the Chemicals industry average (15.6%).

Return on Equity

High ROE: LCTITAN's Return on Equity (5.1%) is considered low.

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Financial Health

How is Lotte Chemical Titan Holding Berhad's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: LCTITAN's short term assets (MYR7.0B) exceed its short term liabilities (MYR1.7B).

Long Term Liabilities: LCTITAN's short term assets (MYR7.0B) exceed its long term liabilities (MYR1.1B).

Debt to Equity History and Analysis

Debt Level: LCTITAN is debt free.

Reducing Debt: LCTITAN has no debt compared to 5 years ago when its debt to equity ratio was 1.2%.

Debt Coverage: LCTITAN has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: LCTITAN has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Lotte Chemical Titan Holding Berhad current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

10.66%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: LCTITAN's dividend (10.66%) is higher than the bottom 25% of dividend payers in the MY market (2.08%).

High Dividend: LCTITAN's dividend (10.66%) is in the top 25% of dividend payers in the MY market (4.94%)

Stability and Growth of Payments

Stable Dividend: LCTITAN has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: LCTITAN has only been paying a dividend for 4 years, and since then payments have fallen.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (67.9%), LCTITAN's dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: LCTITAN is paying a dividend but the company has no free cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

1.6yrs

Average management tenure

CEO

Hyun Park (55 yo)

1.42yrs

Tenure

RM2,782,185

Compensation

Mr. Hyun Chul Park serves as the Chief Executive Officer, President & Director of Lotte Chemical Titan Holding Berhad since January 1, 2021. He serves as President Commissioner at PT Lotte Chemical Titan T...

CEO Compensation Analysis

Compensation vs Market: Hyun's total compensation ($USD632.19K) is above average for companies of similar size in the MY market ($USD443.60K).

Compensation vs Earnings: Insufficient data to compare Hyun's compensation with company performance.

Leadership Team

Experienced Management: LCTITAN's management team is not considered experienced ( 1.6 years average tenure), which suggests a new team.

Board Members

Experienced Board: LCTITAN's board of directors are considered experienced (4.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/30 00:00
End of Day Share Price	2022/06/30 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31