Volatility has stabilised. Volume & activity have also dropped. Things appear to be ‘calmer’ for Lotte Titan Chemical (recently listed on Bursa Malaysia). We are seeing some sort of support zone at $4.27.
If you choose to believe that the recent poorer than expected result was due to one-off water disruption, then the worse may be over.
My Super High Level View On Fair Value
Strictly For Illustrative and Educational Purpose
My personal view – assuming that the incident was a really really one-off impact from the water disruption, plus assuming that this company can achieve a projected annual EPS of RM0.52 (annualised based on 2 quarters) for FY18 and plus this company can trade at a trading P/E of 12 times (vs Petronas Chemicals’s P/E of >15 times), we may be looking at a target price that is higher than its current price of RM4.37.
One should also be concerned whether there will be further rise in oil price due to geopolitical uncertainty. This may impact on the company’s raw material costs.
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