I Priced Lotte Chemical Stock Twice and Got Two Answers

On August 10, 2026, four Korean brokerages published values for Lotte Chemical stock on the same day, reading the same set of quarterly results. The lowest was KRW 63,000 (about USD 44.49) and the highest was KRW 134,000 (about USD 94.63). One is 2.13 times the other. I spent most of my time on this company trying to explain that spread through earnings forecasts, and I could not, because all four of those houses expect the company to lose money in the second half of the year.

Lines 3 and 4 are mine. Hold the first multiple fixed and swap in the second book value estimate: KRW 288,595 times 0.23 gives KRW 66,377. So KRW 64,400 to KRW 66,377 is the stretch created by disagreement over net assets, and KRW 66,377 to KRW 101,008 is the stretch created by disagreement over the multiple. Two houses looking at the same loss-making balance sheet disagree about what fraction of book value it deserves, and that disagreement is almost the entire spread.

Contents18 min read

What I Checked First at the August 11 Close

The closing price on Tuesday, August 11, 2026 was KRW 58,100, or about USD 41.03. Everything in this piece is anchored to that close. The following session was still trading when I wrote this, so it has no close to use.

Reconciling the market capitalization to the last won

My data vendor screen showed a market capitalization of KRW 2,502.4 billion, with a refresh timestamp on the evening of Monday, August 10, 2026. Before using it I wanted to know which close built it. KRW 58,500, the August 10 close, times 42,776,068 shares gives KRW 2,502,399,997,920. That matched to the won, which told me the screen figure was built on the August 10 close, one session behind the price I wanted to use.

So I rebuilt it. The company investor relations page lists 42,775,419 common shares as of Friday, May 15, 2026. Multiplied by the August 11 close, that gives KRW 2,485.3 billion, or about USD 1.755 billion (my calculation). The vendor share count differs by 649 shares, which is 0.0015 percent. I could not establish which count is current, and the effect on market capitalization is under KRW 100 million, so I used the company figure throughout.

Position

One thing jumps out of that table. This company posted positive operating profit in both the first and second quarters of 2026. The window in which both of those results were published is the same three-month window in which the share price fell 35.24 percent. I wanted an explanation for that before I put any value on the shares.

Lotte Chemical Stock Carries Four Values From a Single Day

All four reports below carry the date of Monday, August 10, 2026, three days after the second quarter release. I read them through Korean press coverage and did not open the original documents, which I am flagging because the estimates in the right-hand column reach me secondhand.

Every one of the four cut its value. What separated them was how far: Mirae Asset cut 43.8 percent while Yuanta cut 18.8 percent, and the surviving figures ended up 2.13 times apart.

The right-hand column matters more to me. All four expect losses in the second half or for the 2026 fiscal year. Even iM Securities, the more constructive of the two buy ratings, places the return to annual profitability in 2027. The earnings view is close to unanimous and the published values are more than twice apart. I have written up a Korean name where the consensus value and the market price were two times apart before, and in that case the argument was about whether a new business line had started to pay. This one is different.

Splitting That Gap Into Its Two Components

Mirae Asset and iM both used the same method: take an estimate of net assets per share, multiply by a fraction of book value. The interesting part is that their net asset estimates are close together. KRW 280,000 against KRW 288,595 is a difference of KRW 8,595, or 3.07 percent. Their multiples are 0.23 and 0.35, which is 52.2 percent apart.

Of the KRW 36,608 difference between the two calculated figures, KRW 34,631 comes from the multiple. The disagreement about how much money this company will earn moved the answer by 5.40 percent.

The stated reasons for the two multiples are worth separating too. Mirae Asset cut its applied multiple from 0.40 to 0.23. iM Securities raised its earnings estimates and still discounted its multiple by 20 percent, citing deteriorating sentiment across the market and the sector. One house is marking down the asset itself and the other is marking down the mood around it, and those are not the same judgment even though they push the same direction.

At the August 11 close of KRW 58,100 against the vendor book value per share of KRW 294,208, the shares trade at 0.1975 times book. The market is currently applying a lower multiple than either house used.

Where the Second Quarter Profit Actually Came From

The company released preliminary second quarter figures on Friday, August 7, 2026: consolidated revenue of KRW 5,686.4 billion (about USD 4.016 billion), operating profit of KRW 110.1 billion (USD 77.7 million), and net profit of KRW 194.9 billion (USD 137.6 million).

Korean press coverage put revenue growth at 39.2 percent from the same quarter a year earlier. I checked that against the regulatory filings. Second quarter 2025 standalone-period revenue of KRW 4,085.2 billion against second quarter 2026 revenue of KRW 5,686.4 billion is a factor of 1.3919, so 39.19 percent growth holds. Against first quarter 2026 revenue of KRW 4,990.5 billion, revenue rose 13.94 percent, and against first quarter operating profit of KRW 73.5 billion, operating profit rose 49.84 percent. Both of those sequential figures are my calculation.

Lotte Chemical Stock Rests on a Segment Worth Two Percent of Profit

The segment that produces 69.29 percent of revenue produced 2.09 percent of operating profit. KRW 2.3 billion, about USD 1.6 million, is close to a rounding artifact inside a company of this size. The company described that segment only as affected by scheduled maintenance and by lagging effects from input cost movement.

The percentages are calculated against the consolidated figures, so they add to more than 100. The simple sum of segment revenue exceeds consolidated revenue by KRW 189.5 billion, and the simple sum of segment operating profit exceeds consolidated operating profit by KRW 69.7 billion. I assume intercompany elimination and corporate overhead, but I could not confirm the composition from the disclosure, so both differences are stated and used in no calculation.

What I took from the table is one sentence. This is a petrochemical company, and petrochemicals did not produce its profit. I compared that with a Korean steelmaker whose quarter was carried by one mill while another sat flat, because the segment split there ran the same way.

What the Company Said on Its Own Call

Several write-ups explained the second quarter profit as a windfall from falling feedstock prices working through inventory with a lag. The conference call transcript, as reported in Korean press, says close to the opposite.

Management described naphtha prices rising through April and May on Middle East conflict, then dropping sharply in June, which widened inventory valuation losses. They said April produced a positive lagging effect and that the May to June collapse in feedstock prices produced a negative lagging effect. The inventory valuation loss was given as roughly KRW 100 billion in basic materials and roughly KRW 100 billion at the Titan operation, about KRW 200 billion in total, with the negative lagging effect described as similar in scale.

Read that way, the second quarter profit is what survived after feedstock movement took roughly KRW 200 billion out, and what survived came from advanced materials and fine chemicals. The company itself credited production optimization and profitability-focused operation, and cited neither feedstock nor selling prices.

This is where my first reading broke. I had assumed the profit was a lagging windfall and would therefore reverse. After the call I still expect it to reverse, but for the opposite reason: the lagging effect has already been booked as a negative and the sell-side consensus is that it deepens.

The Case Against Lotte Chemical Stock

One, the spread sits at a third of breakeven

The margin in this business is the price difference between ethylene and naphtha. Korean press citing government commodity data put the ethylene spread at USD 78 per ton as of Friday, July 31, 2026, with naphtha at USD 801 per ton. The industry breakeven commonly quoted is USD 250 per ton, so 78 divided by 250 is 31.2 percent.

The figures conflict. Another Korean outlet put the spread near USD 200 with breakeven at USD 300 for the same period. The compilers appear to differ and I could not establish which is authoritative, so I am recording both and averaging neither. Under either set the spread is below breakeven, and what changes is how far below.

Two, the credit outlook fell in a year with two profitable quarters

Korea Investors Service, a domestic credit assessor, affirmed the unsecured bond rating at AA minus on Friday, June 12, 2026 while moving the outlook from stable to negative. NICE Investors Service moved in the same direction. The reasons given were four consecutive years of operating losses beginning in 2022, two consecutive years of large net losses, and renewed growth in net debt.

The four-year run is verifiable in the filings: operating losses of KRW 762.6 billion in 2022, KRW 347.7 billion in 2023, KRW 894.1 billion in 2024, and KRW 943.1 billion in 2025. Of those four years, 2025 was the largest. The 2025 net loss was KRW 2,476.2 billion, about USD 1.749 billion.

I have put a credit assessment ahead of an asset value calculation once before at another Korean chemical company, and that ordering is what kept me out of the shares. I used the same ordering here.

Three, a third quarter loss is the shared premise

NH wrote that the positive lagging effect from input timing disappears in the third quarter and the company swings back to a loss. Mirae Asset flagged the same period for the full negative lagging effect. Yuanta, which carries a buy rating, described the second quarter as panic buying of petrochemical products on Iran-related disruption pushing the spread temporarily into profitable territory. The constructive houses do not treat this quarter as a structural recovery either.

Four, funding terms

The company issued KRW 200 billion of three-year public bonds in July 2026 to refinance an equal amount of commercial paper, and Korean press reported the issue carried a bank guarantee. Net debt stood at KRW 8,063.1 billion (about USD 5.694 billion) at the end of the first quarter of 2026 on the credit assessor basis, against KRW 6,840.9 billion at the end of 2025. Yuanta put the figure closer to KRW 4,900 billion after reflecting the Daesan debt transfer. The two bases clearly differ and I could not reconcile them, so both are recorded.

Lotte Chemical Stock Next to LyondellBasell

The closest listed comparison I could verify is LyondellBasell Industries (NYSE: LYB), and I picked it for one specific reason: both companies are in the same down cycle with no trailing earnings multiple, and only one of them has a forward multiple attached.

LyondellBasell figures are as displayed on August 11, 2026. I reproduced two of them before using the table: USD 63.98 times 323.04 million shares gives USD 20.668 billion against the displayed USD 20.67 billion, and earnings per share of USD -1.12 times the same share count gives USD -361.8 million against a displayed USD -359.0 million, a 0.78 percent difference explained by rounding in the per-share figure. LyondellBasell reported second quarter 2026 net income of USD 559 million on July 31, 2026.

The comparison I am drawing is narrow. These two companies do not have the same asset base, the same feedstock slate, or the same geography, and Lotte Chemical is 8.49 percent of the American company by market capitalization. What I wanted was how the market currently treats each of them. Both are loss-making on a trailing basis. One has a forward multiple of 7.80 sitting on its screen, which means estimates have converged enough to divide by. The Korean name has no forward earnings per share and no forward multiple on my vendor screen at all. That absence is consistent with what the four Korean reports showed: the houses have not agreed on a number to divide by, so they are arguing about book value fractions instead.

Reaching Lotte Chemical Stock From a US Brokerage Account

The shares trade on the KOSPI, the main board of the Korean exchange, which lists the country’s larger established companies. The KOSDAQ is the separate secondary board for growth and technology names. This is a KOSPI listing.

I found no American depositary receipt for this company, so a US-based investor buying the local line needs a broker with direct Korean market access and needs to handle won settlement and Korean transaction taxes. The broad Korea funds most American accounts already hold, such as the iShares MSCI South Korea ETF or the Franklin FTSE South Korea ETF, will contain this name only at a very small weight, because at USD 1.755 billion of market capitalization it sits far down a capitalization-weighted index dominated by semiconductors and autos.

There is a second access point worth naming. There is no US-listed pure play on the Korean petrochemical cycle, and the sector consolidation described below is being carried out through private joint ventures between listed Korean companies. An American investor cannot express a view on the restructuring itself, only on the individual listed participants, and this company is one of several.

Lotte Chemical Stock Loses Its Comparison Base in September

The share count itself has not moved. I found no rights issue, bonus issue, stock split, capital reduction, convertible bond, or warrant-linked bond in the past six months. There are no preferred shares, and treasury holdings are 608,272 shares, or 1.42 percent of shares issued.

Something else does move. On Sunday, March 29, 2026 the company resolved to spin off its Daesan plant into a wholly owned entity, and the new company launched on Monday, June 1, 2026. That entity is being absorbed into HD Hyundai Chemical, with Lotte Chemical receiving newly issued shares in exchange. The end state is a 50-50 split between Lotte Chemical and HD Hyundai Oilbank, with completion targeted for September 2026. Management said on the call that roughly KRW 1,600 billion (about USD 1.130 billion) of borrowings transferred with the Daesan restructuring.

The Yeosu complex is moving as well. A restructuring approved by the Korean government on Wednesday, July 22, 2026 brings together Lotte Chemical, Hanwha Solutions, DL Chemical, and Yeochun NCC to cut regional ethylene capacity from 3.52 million tons to 2.13 million tons, a reduction of about 1.39 million tons. The combined entity is to be owned one third each by three of the participants. Korean sell-side commentary notes the launch date has slipped.

The share count is stable, so I should explain why I am calling this a break in the comparison base. Once Daesan leaves the consolidation and moves to equity accounting, the revenue and segment profit series stop continuing from the third quarter. The KRW 3,940.3 billion basic chemicals line above will not mean the same thing in the next release. I decided not to judge trend from this company’s quarterly series until one full quarter has been reported on the new basis.

What I Watch, and What Breaks My Thesis on Lotte Chemical Stock

My stance is watching without a position. I have placed no order and hold none of these shares as I write.

My reading is a single sentence. The argument about this company is about the multiple and not about earnings. The evidence is that four houses agreeing on second-half losses published values 2.13 times apart, and that 94.60 percent of the measurable part of that spread came from the multiple.

Numbers I left out

Dividends are a separate case. The 2025 fiscal year dividend was KRW 1,000 per share, down from KRW 2,000 for 2024, KRW 3,500 for 2023, and KRW 10,500 for 2018. At the August 11 close that is a yield near 1.64 percent. That the payment continued through four consecutive loss-making years is recorded, and it is not part of what I am arguing.

Two figures I am watching

First, third quarter basic chemicals operating profit. Whether it falls from KRW 2.3 billion into a loss, and how deep, is the test of the shared sell-side premise. Because the Daesan restructuring closes in September, I also want to see whether the company presents the segment on both the old and new bases.

Second, controlling-interest equity and net debt in the semi-annual filing. The KRW 129,423 book value discrepancy resolves there. I will look at whether the reported figure lands nearer to KRW 280,000 or KRW 288,595.

What breaks the thesis

If published values still sit more than two times apart after third quarter results, my reading holds. If the four houses converge in one direction after those results, then this spread was an argument about earnings all along and I was holding the wrong end of it. In that case the whole frame above goes, and I do not try to adjust around it.

The conditions under which I would consider buying are separate and both must hold: net debt visibly lower in the semi-annual filing, and a basic chemicals loss in the first post-restructuring quarter that is smaller than the KRW 433.5 billion consolidated operating loss of the fourth quarter of 2025. One without the other does not move me.

Frequently Asked Questions About Lotte Chemical Stock

The second quarter is called a return to profit. Was the first quarter a loss?

It was not. The first quarter was also positive, at KRW 73.5 billion of operating profit against KRW 110.1 billion in the second, so this is a second consecutive profitable quarter. The phrase in the coverage compares with the same quarter a year earlier. The quarter that ended the consecutive loss run was the first quarter, and nine quarters preceded it. Counting standalone quarters in the filings, the last positive quarter before that was the third quarter of 2023 at KRW 28.1 billion, and every quarter from the fourth quarter of 2023 through the fourth quarter of 2025 was negative.

At 0.2 times book, is this not simply cheap?

Calling it cheap assumes the book value being divided into holds. The NH report is titled around asset value continuing to decline, and Mirae Asset cut its applied multiple from 0.40 to 0.23. Those houses are marking down what the multiple is applied to, while leaving the earnings estimate roughly where it was. On my side, the net asset estimate for this company splits three ways between the vendor screen at KRW 294,208, iM at KRW 288,595, and Mirae Asset at KRW 280,000, which is why I kept price to book out of my reasoning.

What does the Daesan spin-off change for a shareholder?

Share count does not change. The plant was spun into a wholly owned entity that is being absorbed by HD Hyundai Chemical, with Lotte Chemical taking newly issued shares, so existing holders are not diluted. What changes is the consolidation perimeter. After completion in September 2026, the Daesan cracker becomes a 50 percent-held affiliate, and revenue and segment profit stop being comparable with prior periods on the same basis. Roughly KRW 1,600 billion of borrowings moves with it, per the company call.

What I Can Record From the August 11 Close

First-half 2026 operating profit is KRW 183.6 billion, about USD 129.6 million. The 2025 full-year operating loss was KRW 943.1 billion. The two profitable quarters have recovered 19.47 percent of what the prior year gave up.

And one line below operating profit on the first quarter income statement sits interest expense of KRW 217.3 billion (about USD 153.4 million) against operating profit of KRW 73.5 billion. Operating profit covers 0.34 times the interest bill, which reproduces the interest coverage figure of 0.34 on my vendor screen to the decimal. The turn to positive earnings is accurate for exactly one line of that statement.

So what I can put down against the August 11 close of KRW 58,100 is a set of conditions instead of a value. What the semi-annual filing settles the net asset figure at, and what the remaining segments earn in a quarter without Daesan. Until those two numbers exist I am not adopting any point between 0.23 and 0.35 as mine.

The date I reopen this file is already set. Friday, August 14, 2026, the semi-annual filing deadline.

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Price and market capitalization basis: closing price of KRW 58,100 on August 11, 2026. Indicator data is from Kiwoom, screen refreshed on the evening of August 10, 2026, and market capitalization is my calculation using the 42,775,419 shares reported by the company as of May 15, 2026. Earnings figures are from Korean regulatory filings and the company’s preliminary release of August 7, 2026. Currency conversions use KRW 1,416.10 per US dollar, the Seoul market close of August 7, 2026, which is two business days ahead of the price date used here; conversions are indicative and included once for each figure. Segment shares, sequential growth rates, price to book, and the decomposition of the two published valuations are all my calculations.

Sources. Korean-language outlets below are rendered into English by me, so the wording is my translation: Money Today, August 7, 2026, on the second quarter release · Asia Today on the conference call · ZDNet Korea on the debt transfer · Newspim on the Mirae Asset report · Newsway on the NH and Yuanta reports · Sidae on the ethylene spread compilation · Etoday on the credit outlook change · Bloter on the guaranteed bond issue · Stock Analysis for LyondellBasell figures · LyondellBasell second quarter 2026 release · Lotte Chemical investor relations share data

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