Lotte Fine Chemical earns money from two businesses: "chemicals," which makes ECH, caustic soda and ammonia used as raw materials for paint, textiles and fertilizer, and "green materials," high-value specialty materials made by processing cellulose from wood. It holds Korea's largest ammonia storage facilities and continues to expand capacity toward a world-leading position in cellulose. In April it confirmed sharply higher operating and net profit in its 2025 annual results and decided on a dividend of ₩1,500 per share (about 3.3%), and it also entered the ammonia bunkering business for carbon-free ship fuel. The notable point right now is that, among large chemical companies that posted losses, it maintains profitability, a net-cash position and a 3.3% dividend, and trades below net assets at a P/B of 0.48x, while ECH, caustic soda and ammonia are cyclical products whose profit swings with international prices, so if the chemical economy slows again profit could be pressured with it.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt ratio, current ratio and interest burden all look healthy.
- Revenue rose 4.9% year over year, and the pace is quickening (3-year trend: mixed).
- Most recent quarter (Q1 2026) revenue was 14.6% higher than a year earlier.
- ROE is 4.4% (controlling-interest basis). It is above the sector average.
- Operating margin is 4.2%.
- The forward P/E sits below the sector median.
Ownership & governance As of 2025-12-31
Largest shareholder Lotte Chemical 43.5% (corporate)
Controlling bloc incl. related parties 43.52%
With the controlling bloc holding 44%, the ownership structure is stable.
🔎 In-depth analysis
- Lotte Fine Chemical earns money from two broad businesses.
- One is "chemicals," led by ECH (epichlorohydrin), a raw material for paint and epoxy; caustic soda, a base raw material for textiles, paper and detergent; and ammonia, used as a fertilizer and chemical raw material.
- The company holds Korea's largest ammonia storage facilities and handles a substantial part of domestic ammonia distribution.
- The other is "green materials," high-value specialty materials made by processing cellulose extracted from wood.
- These include Mecellose, a construction additive; Hecellose, used in paint and cosmetics; and Anycoat, used for pharmaceutical capsules and coatings.
- The company continues to expand capacity in this cellulose business toward a world-leading production position.
- The latest close is ₩42,950 and market capitalization is ₩1.1 trillion.
- The price sits below its 20-day line (₩45,862) and below its 60-day line (₩52,380).
- Trading below both the short- and mid-term moving averages, the trend looks depressed.
- The RSI (a supplementary gauge that compares upward and downward force over the past 14 days on a 0-100 scale) is 37.0, a neutral level.
- The one-month change is -7.7%, the three-month change is -11.4%, and the position versus the 52-week high is -39.7%.
- Relative strength against the KOSPI is 30 (on a 1-99 scale, converting the past year's return versus the index with more weight on recent periods; higher means stronger than the market).
- That places it in roughly the top 71% of all stocks by strength.
- Over the past three months it lagged the index by 31.6%.
- Chart reading is best done alongside trading volume and the dates disclosures occur.
- Its valuation metrics are noticeably low within the chemicals sector.
- The P/E ratio (how many times one year's earnings the price represents) is 10.44x and the P/B (how many times net assets the price represents) is 0.45x — meaning it trades at less than half its net assets.
- Its finances are very solid: the debt ratio (debt relative to equity) is low at 12.7%, the current ratio is 4.25x and the interest coverage ratio is 9.45x.
- In particular, net debt (total borrowings minus cash) is -₩171.2 billion, a "net-cash" position, meaning it holds more cash than debt.
- On top of this, EV/EBIT (a P/E-like measure that also reflects debt, enterprise value divided by operating profit) is 13.5x and EV/Sales (enterprise value divided by revenue) is 0.57x.
- The FCF yield (the ratio of cash actually generated to market cap) is 2.5%.
- ROE (how much it earns in a year on equity) is 4.4%, not high, but unlike large chemical companies that posted losses it steadily stays profitable.
- That said, the P/E of 11.1x shown in the table is based on 2025 results when profit was at a trough, so with profit now recovering it looks higher than it feels in practice.
- The five-year figures show a cyclical sector where profit swings sharply.
- Net profit fell from ₩585.4 billion in 2021 to ₩146.1 billion in 2022 and down to ₩36.4 billion in 2024, then rose again to ₩106.0 billion in 2025.
- 2024 was the trough.
- 2025 revenue grew 4.9% over the prior year, while operating profit surged 47.6% and net profit 191.6% — a signal that it has passed the low point and entered a recovery phase.
- The first quarter of 2026 shows a clearer recovery: revenue rose 14.6%, operating profit 73.9% and net profit 57.4% year over year.
- Expanded sales of a semiconductor developer raw material (TMAC), higher international ECH prices, and sales of added cellulose paint-additive capacity all contributed.
- If this trend continues, 2026 profit is positioned to step up another notch over 2025.
- So on this year's expected earnings the price computes cheaper than it does on the P/E based on 2025 results.
- Recent disclosures show an earnings rebound and shareholder returns together.
- In April it confirmed its 2025 annual results, reporting sharply higher operating and net profit.
- In the same month it decided on a dividend of ₩1,500 per share (about 3.3% at the current price).
- The May quarterly report confirmed the Q1 2026 recovery.
- In addition, the company entered the bunkering business of supplying ammonia — drawing attention as a carbon-free fuel — as ship fuel, showing a move to get ahead in the clean-ammonia field.
- The recovery of the existing chemical business and the two axes of green materials and eco-friendly new business are confirmed through disclosures.
- The strengths are clear.
- Among large chemical companies that posted losses, it is one of the few maintaining profitability, a net-cash position and a 3.3% dividend.
- At a P/B of 0.48x it is cheap relative to net assets, and profit is recovering after passing a 2024 trough.
- It also has defensive qualities in a high-value cellulose green-materials business and ammonia infrastructure.
- There are points to watch.
- ECH, caustic soda and ammonia are cyclical products whose profit swings widely with international prices.
- As the current recovery leans on rising prices, profit could be pressured with them if the chemical economy turns down again.
- An ROE of 4.4% is not yet high.
- In sum, it is a structure that is strong when chemical prices recover and cellulose and semiconductor-material demand continue, and weak when the chemical economy slows again.
🔎 Valuation vs peers Undervalued
Domestic listed chemical companies whose business substance is comparable, considering large diversified chemicals (LG Chem, Lotte Chemical) alongside specialty chemicals (SK Chemicals).
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Lotte Chemical | 0.00x | 0.21x | -16.19% |
| LG Chem | 0.00x | 0.55x | -5.54% |
| SK Chemicals | 15.81x | 0.31x | 1.98% |
The large chemical companies being compared are mostly in the red. Lotte Chemical has an ROE of -16.2% and LG Chem -5.5%, both in loss, and SK Chemicals is also low at an ROE of 2.0%. Amid that, Lotte Fine Chemical is profitable with an ROE of 4.4% and maintains a net-cash position and even a 3.3% dividend. Yet its P/B is 0.45x, less than half net assets. The P/E of 11.1x shown in the table looks high because it is based on 2025 when profit was at a trough, but with profit recovering from a 2024 low, the multiple falls further on this year's expected earnings. Taking business quality (profitable, net cash, dividend) together with valuation (P/B 0.48x), this reads as undervalued if the earnings recovery continues.
Price history Close · MA20 · MA60
The latest close is ₩42,950 and the market capitalization is ₩1.1 trillion. The price sits below its 20-day moving average (₩45,862) and below its 60-day moving average (₩52,380). It is under both its short- and medium-term moving averages, so the trend looks subdued. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 37.0, a neutral level. The one-month change is -7.7%, the three-month change is -11.4%, and the position relative to the 52-week high is -39.7%. Relative strength versus the KOSPI is 30 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 29% of all stocks. Over the past three months it lagged the index by 31.6%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Relative performance stock vs index · start = 100
Excess return vs index · 3M -31.64% / 6M -37.72% / 12M -55.45%
Key metrics vs sector median
Valuation
The P/E of 10.44x is below the sector median (14.79x). The P/B of 0.45x is below the sector median (0.97x). Both metrics are low versus peers, so the price is not expensive relative to earnings and assets. That said, this P/E is based on last year's (trailing) results. With recent quarterly earnings up sharply, the trailing P/E can look higher than it really is, so a precise read is best done on this year's expected (forward) earnings.
Enterprise value (EV)
EV = market cap + net debt. It reflects cash and debt, so it captures the real cost of the whole business that market cap alone misses; lower multiples are cheaper relative to earnings or sales.
Intrinsic value (DCF estimate)
DCF (discounted cash flow) estimate — discount rate 9.8%, initial growth 10.0%→terminal 2.0%, 10-yr forecast, free-cash-flow basis, forward earnings power normalized 1.454x. A reference range that shifts materially with assumptions.
Profitability & financials
Return on equity (ROE) is 4.4%, in line with the sector average (4.0%). The operating margin is 4.2%. The debt ratio is 12.7%, so the financial structure is stable.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $1.2B | $1.1B | $1.2B | +4.92% ↑ faster |
| Operating profit | $102.6M | $33.4M | $49.3M | +47.62% ↑ faster |
| Net profit | $120.6M | $24.1M | $70.3M | +191.62% ↑ faster |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $1.2B | $1.6B | $1.2B | $1.1B | $1.2B |
| Operating profit | $162.1M | $268.0M | $102.6M | $33.4M | $49.3M |
| Net profit | $388.0M | $96.9M | $120.6M | $24.1M | $70.3M |
| Revenue CAGR | 4-yr avg -0.39% | ||||
Revenue rose 4.9% year over year (2023 ₩1.8 trillion → 2024 ₩1.7 trillion → 2025 ₩1.8 trillion), and the three-year trend is 'mixed'. The pace of growth also quickened from the prior year. Operating profit rose 47.6% year over year. Profit is growing at an accelerating pace. Over the 5 years on record, revenue compound annual growth (CAGR) is -0.4%. The two-year revenue CAGR is -0.4%. In the most recent quarter (Q1 2026), revenue was 14.6% higher than the same period a year earlier.
Latest quarterly results Q1 2026 · vs year-ago
Technical indicators
What stands out
- P/E and P/B are both low versus peers, so the price looks inexpensive relative to earnings and assets.
- The dividend yield, at 3.5%, is on the high side.
- The balance sheet is stable in terms of debt and liquidity.
Points to watch
- The figures shown are based on the last annual report as of the writing date, so it is best to review the latest quarterly results and filings alongside them.
Recent news & events searched · sourced
- 2026-04-28EarningsConfirmed 2025 annual results. Operating profit up 47.6% and net profit up 191.6%, confirming recovery after the 2024 trough.Confirms in figures that it passed the profit bottom and entered a recovery phase. Positive for the medium-term earnings direction. Source
- 2026-04-20DividendDecided on a cash dividend of ₩1,500 per share. Yield of about 3.3% at the current price.Continued shareholder returns backed by net-cash finances. Maintains the dividend even during the earnings recovery. Source
- 2026-05-29FilingFiled the Q1 2026 quarterly report. Revenue ₩510.7 billion and operating profit ₩32.7 billion, up 14.6% and 73.9% respectively year over year.Confirms the recovery continued into the start of the year. Semiconductor materials, ECH prices and cellulose capacity additions drove results. Source
- 2026-05-15FilingFiled the March 2026 quarterly report. Reflects detailed Q1 financials.Reinforces the basis for the recovery trend by disclosing detailed quarterly results. Source
Figure cross-check computed ↔ external
Recent filings
- 2026-05-29Large-business-group status disclosure
- 2026-05-29Corporate governance report
- 2026-05-15PeriodicQuarterly report
- 2026-05-07OwnershipLargest-shareholder ownership change report
- 2026-04-28EarningsFair-disclosure notice
- 2026-04-20EarningsEarnings disclosure
- 2026-03-19Disclosure
- 2026-03-19Shareholders' meeting notice
- 2026-03-11PeriodicAnnual business report
- 2026-03-11Audit report
- 2026-02-27Large-business-group status disclosure
- 2026-02-25Disclosure
📖 Plain-language glossary — expand if you are new to this
- P/E
- How many times a year's net profit the price is worth (lower is cheaper relative to earnings). The P/E here is on trailing (last full-year) results; for companies whose earnings swing fast (memory chips and other cyclicals/high-growth), a forward P/E on this year's expected earnings is more accurate.
- P/B
- Price relative to net assets (equity). Around 1x means it trades near book value; below 1x means below book.
- P/S
- Price relative to a year's revenue — useful for growth companies with thin earnings.
- Net debt / EV
- Net debt = interest-bearing debt − cash. Negative means more cash than debt (net cash). EV (enterprise value) = market cap + net debt, closer to what it would cost to buy the whole business.
- EV/EBIT · EV/EBITDA · EV/Sales
- Enterprise value against operating profit (EBIT), EBITDA, or revenue. Unlike P/E these reflect debt and cash; lower is cheaper relative to earnings power or sales.
- FCF / FCF yield
- Free cash flow = operating cash − capex, the cash actually left over. FCF yield = FCF ÷ market cap; higher means more cash generated per unit of market value.
- Intrinsic value (DCF)
- Future free cash flow (or, for some capex-heavy but profitable names, forecast earnings) discounted to today to estimate per-share value. Because it shifts a lot with the discount-rate and growth assumptions, it is shown as a bear/base/bull range, and the basis and assumptions are disclosed in one line beneath it.
- ROE
- How much profit the company earns in a year on its equity (%). Higher means better returns on capital.
- EPS / BPS
- Earnings per share / net assets (book value) per share.
- Operating / net margin
- Profit left from the core business / final profit after tax and interest, per unit of revenue.
- Debt ratio
- Debt relative to equity (%). Higher means more reliance on borrowing (norms vary by sector).
- Current ratio
- Assets convertible to cash within a year against debt due within a year. Above 100% leaves some short-term headroom.
- Interest coverage
- How many times operating profit covers the interest owed. Below 1x means operating profit alone struggles to cover interest.
- Dividend yield / payout ratio
- The year's dividend as a % of today's price / the share of earnings paid out as dividends.
- Revenue CAGR
- Multi-year growth expressed as a single yearly average (compound annual growth rate).
- RSI (short-term signal)
- Whether recent price action is overheated or beaten down. Above 70 is overbought, below 30 oversold.
- MA20 / MA60 (moving averages)
- The 20- and 60-day average price. Price above them signals a firmer short-term trend.
- vs 52-week high
- How far below the past year's peak the price sits now (%).
All figures are for reference only; how they read varies by sector and over time.
Sources: Korea FSC market-price API (data.go.kr), OpenDART, KRX/KIND — public data only.
Bong Stocks presents public-data-based information for reference only. It is not investment advice and contains no target prices, ratings, or buy/sell recommendations. Verify independently before making any decision.