What’s Happening? Lotte Chemical to Hold IR on August 12

Lotte Chemical has officially announced it will hold a corporate briefing (IR) for investors at 9:00 AM on August 12, 2025. The session is expected to cover a general company overview, a review of Q1 performance, and an unveiling of future business strategies.

Why Is It Important? A Dismal Q1, A Light at the End of the Tunnel?

The significance of this IR is amplified by Lotte Chemical’s current predicament. The company posted a staggering ₩126.6 billion operating loss in Q1 2025, a sharp turn into the red. The primary causes were:

  • – Soaring Costs: Volatility in oil prices, exacerbated by the Russia-Ukraine war and US-China trade tensions, led to instability in the price of naphtha, a key raw material, increasing cost pressures.
  • – Weak Demand: Sustained high-interest rates and a delayed economic recovery in China significantly dampened demand from key downstream industries like home appliances, IT, and automotive.
  • – Geopolitical Risks: Persistent global supply chain disruptions and fears of a global recession have heightened uncertainty in the business environment.

This IR will be the company’s first major test to dispel market concerns and rebuild trust after its worst quarterly performance in recent memory.

So What? Two Scenarios That Will Dictate the Stock’s Trajectory

The stock’s reaction will likely be starkly divided based on the IR’s content. Investors should prepare for the following two scenarios:

The Bull Case: A Signal for a Rebound

Positive investor sentiment and a potential stock rally could be triggered if the company presents:

  • ✅ A Concrete Recovery Strategy: A detailed roadmap and evidence showing how they will improve performance from Q2 onwards, through cost-cutting measures and a shift towards high-value-added products.
  • ✅ Visible Future Growth Engines: Clear progress updates and a compelling vision for new businesses like the Indonesia cracker project, hydrogen energy, and battery materials, reinforcing long-term growth potential.
  • ✅ Restored Trust Through Transparency: A frank admission of current difficulties, coupled with a demonstration of strong management commitment and a clear plan to overcome them.

The Bear Case: Continued Uncertainty

Conversely, a sell-off could ensue, increasing downward pressure on the stock if the following occurs:

  • ❌ Persistent Q2 Slump: An announcement that Q2 performance shows little to no improvement from Q1, or a bleak outlook for the coming months.
  • ❌ Vague, Generic Strategies: A presentation that relies on boilerplate statements without concrete action plans, or news of delays and scale-backs in new business initiatives.
  • ❌ Blaming External Factors: An attitude that attributes poor performance solely to external factors like geopolitics and the global economy, suggesting a lack of internal drive for innovation and reform.

Investor Action Plan: What to Check Before and After the IR

Successful investing requires more than just listening to the presentation. A comprehensive judgment should be based on checking the following:

  1. Confirm Q2 Earnings: The Q2 results, likely to be released before the IR, are the most critical barometer. Check whether it’s an earnings surprise or an earnings shock compared to the market consensus.
  2. Analyze Brokerage Reports: Compare reports from various securities firms to get an objective view of market expectations and concerns regarding Lotte Chemical.
  3. Track Competitors: Assess Lotte Chemical’s relative competitiveness by comparing its performance and strategy with domestic and international peers like LG Chem and Kumho Petrochemical.
  4. Monitor Macro Indicators: Continuously track key macroeconomic indicators that directly impact earnings, such as naphtha prices, crude oil prices, and currency exchange rates.

In conclusion, Lotte Chemical’s August IR is a pivotal event that will shape its future corporate value and stock direction. Investors should critically evaluate the company’s strategy and crisis-management capabilities presented at the IR and cross-verify the information with relevant data to make informed investment decisions.