KUALA LUMPUR (Jan 30): TA Securities has maintained its “sell” rating on Lotte Chemical Titan Holding Bhd (LCTitan) at RM1.46 with an unchanged target price of RM1.05 and said the company’s near-term earnings outlook remains challenging.
In a note on Tuesday, the research house said it expects product spreads to continue to languish in the first half ending June 30, 2024 (1HFY2024) given the challenging global economic environment but should improve in 2HFY2024 on the back of interest rate cuts in the US and stimulus measures in China.
The research house said LCTitan will continue to face losses in 1QFY2024.
“FY2023 results came in within ours but above consensus expectations.
“The group registered a core net loss of RM891.6 million in FY2023 (FY2022: RM606.2 million loss).
“We forecast a core loss of RM907.1 million, while consensus forecast a loss of RM1.07 billion for FY2023,” it said.
TA Securities said similar to previous quarters, LCTitan maintained low utilisation rates in 4QFY2023 in lieu of subdued demand.
“This was reflected in the low plant utilisation rate of 66% in 4QFY2023 (3QFY2023: 66%; 4QFY2022: 73%).
“There's no change to our earnings forecasts. We introduce [our] FY26 earnings [forecast] of RM482.8 million,” it said.