Lotte Fine Chemical Co Ltd

Lotte Fine Chemical Co Ltd maintains a strong liquidity position, with cash and equivalents amounting to KRW 408.18 billion, which is significantly higher than its short-term liabilities. The company's liquidity ratio of 3.77 indicates a robust ability to meet its current obligations. Additionally, the company's price-to-book ratio of 0.57 suggests that the market values the company at a discount to its book value, which may reflect either undervaluation or concerns about future earnings potential.

In terms of profitability, the company's return on equity (ROE) of 3.45% and return on assets (ROA) of 2.93% are below the typical thresholds for strong performance in the chemicals industry. These figures indicate that the company is generating relatively modest returns on its equity and asset base compared to industry benchmarks. The company's operating margin, calculated as operating income divided by revenue, is 2.70%, which is in line with the industry median of 2.5%.

The company's revenue is primarily concentrated in South Korea, with a significant portion derived from its domestic operations. While the company has a presence in international markets, its geographic exposure is limited, which may pose a concentration risk. The company's revenue concentration in a single country could make it more vulnerable to local economic and regulatory changes.

Looking ahead, the company is projected to experience moderate revenue growth, with a year-over-year increase of approximately 4.5% in the current fiscal year and a further 3.2% in the next fiscal year. This growth trajectory is supported by the company's ongoing investments in research and development and its strategic focus on expanding its product portfolio. However, the company's capital expenditures are expected to remain high, which could impact its free cash flow.

The company's risk profile is characterized by low liquidity and dilution risks, with no immediate filing-based flags detected. The company's debt-to-equity ratio of 0.06 indicates a conservative capital structure, with minimal reliance on debt financing. However, the company's high capital expenditures may necessitate additional financing in the future, which could introduce dilution risks. The company's current share structure, with no difference between basic and diluted shares, suggests that there is no immediate threat of equity dilution.

Recent events, including the company's strong performance in the first quarter of the current fiscal year and its continued focus on innovation, have been positively received by analysts. The company's mean price target of KRW 71,000 is significantly higher than its current market price of KRW 54,400, indicating a positive outlook from the investment community. The company's strong buy and buy recommendations from analysts further support this positive sentiment.

Lotte Fine Chemical Co Ltd (004000.KS) has undergone a significant update to its corporate taxonomy, now formally classified under the "Diversified Chemicals" activity within the "Basic Materials" economic sector. This structural reclassification represents the most material change in the company's profile, shifting the analytical framework from an undefined state to a specific industry context. The change is categorized with medium severity, indicating a foundational adjustment to how the firm is positioned within the broader market landscape. Alongside the sectoral redefinition, the company’s risk assessment metrics have been initialized, with both dilution risk and liquidity risk now rated as "low." These new fields, previously null, provide a clearer picture of the firm's financial stability and capital structure integrity. The low severity assigned to these risk indicators suggests that, under current assessment parameters, the company faces minimal immediate threats regarding share dilution or cash flow constraints. The significance of these updates lies in the establishment of a more robust analytical baseline for investors and analysts. With three analysts currently covering the stock, the formalization of sector classification and risk metrics allows for more precise peer comparisons and valuation models within the Basic Materials space. This clarity is essential for accurate benchmarking, particularly given the absence of index membership or disclosed top holder data in the current profile. Overall, the transition from undefined fields to specific classifications in activity, sector, and risk assessment marks a maturation in the available data for Lotte Fine Chemical. While no new external events or financial performance shifts are reported, the internal consistency of the company's profile has improved. This enhanced data structure supports more reliable long-term monitoring of the firm's operational and financial health within the diversified chemicals industry.

Analysts project 55% upside to a mean target price of 71,000 KRW, reflecting strong buy consensus.

Net income surged 191.6% year-over-year to 106.1 billion KRW in fiscal 2026, signaling robust recovery.

Operating income increased 36.4% year-over-year to 66.3 billion KRW, demonstrating improved operational efficiency.

Low dilution, liquidity, and credit risk flags suggest a stable financial profile with minimal immediate threats.

Free cash flow remains negative at -36.9 billion KRW in fiscal 2026, indicating ongoing cash burn.

Revenue declined with a negative 0.4% four-year CAGR, showing a lack of top-line growth momentum.

Return on equity of 3.5% falls below the 3.7% cohort median, indicating subpar capital efficiency.

Capex intensity is in the bottom quartile, potentially limiting future capacity expansion and growth potential.

Revenue KRW 439.06B, +2,4% YoY; Operating income +63,5% YoY.

• ▍Revenue KRW 439.06B, +2,4% YoY
• ▍Operating income +63,5% YoY
• ▍Net income +243,8% YoY
• ▍Free cash flow −342,1% YoY
• ▍Net margin 6.1%

Revenue KRW 424.67B, +0,6% YoY; Operating income −49,1% YoY.

• ▍Revenue KRW 424.67B, +0,6% YoY
• ▍Operating income −49,1% YoY
• ▍Net income −64,1% YoY
• ▍Free cash flow −83,8% YoY
• ▍Net margin 3.7%

Revenue KRW 445.59B, +11,6% YoY; Operating income +74,3% YoY.

• ▍Revenue KRW 445.59B, +11,6% YoY
• ▍Operating income +74,3% YoY
• ▍Net income −66,0% YoY
• ▍Free cash flow −61,8% YoY
• ▍Net margin 6.4%

Revenue KRW 428.61B; Operating income KRW 10.40B.

• ▍Revenue KRW 428.61B
• ▍Operating income KRW 10.40B
• ▍Net margin -4.4%

Revenue KRW 420.41B; Operating income KRW 10.33B.

• ▍Revenue KRW 420.41B
• ▍Operating income KRW 10.33B
• ▍Net margin -17.0%

Revenue KRW 422.07B; Operating income KRW 17.11B.

• ▍Revenue KRW 422.07B
• ▍Operating income KRW 17.11B
• ▍Net margin 10.3%

Revenue KRW 399.44B; Operating income KRW 10.77B.

• ▍Revenue KRW 399.44B
• ▍Operating income KRW 10.77B
• ▍Net margin 20.9%

Revenue KRW 1.75T, +4,9% YoY; Operating income +36,4% YoY.

• ▍Revenue KRW 1.75T, +4,9% YoY
• ▍Operating income +36,4% YoY
• ▍Net income +191,6% YoY
• ▍Free cash flow +31,0% YoY
• ▍Net margin 6.1%

Revenue KRW 1.67T, −5,5% YoY; Operating income −68,6% YoY.

• ▍Revenue KRW 1.67T, −5,5% YoY
• ▍Operating income −68,6% YoY
• ▍Net income −80,0% YoY
• ▍Free cash flow −140,7% YoY
• ▍Net margin 2.2%

Revenue KRW 1.77T; Operating income KRW 154.74B.

• ▍Revenue KRW 1.77T
• ▍Operating income KRW 154.74B
• ▍Net margin 10.3%

Revenue KRW 1.78T; Operating income KRW 241.02B.

• ▍Revenue KRW 1.78T
• ▍Operating income KRW 241.02B
• ▍Net margin 32.9%