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Lotte Chemical

011170 · KOSPI · ₩011170 · 롯데케미칼

₩47,900▲ ₩1,050 (2.24%)End-of-day · Oct 28, 2026 · End-of-day prices.
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Valuation model · Discounted cash flow (DCF)

We use a 5-year discounted cash flow: the value of the cash the business is expected to produce, in today's money.

Fair value per share

With these assumptions the model gives no positive value.

Enterprise value
−₩21T
Equity value
−₩33T
WACC
4.9%

Model estimate based on the assumptions shown. Not a price target and not a buy or sell signal. This is not financial advice.

Why the model and the price differ

The model gives no positive value at these assumptions. What we can see:

  • To match today's price of ₩47,900, the model needs an operating margin of 5.1% every year (it uses −2.9%).
  • Margins ranged from −5.1% to 8.5% over the last 5 years, so this is a cyclical business. The model uses the average; the price may be set by where the cycle is now. Try the margin fade option.
  • In the projection, spending on equipment, software and working capital takes most or all of the after-tax operating profit, so free cash flow is thin. Companies that invest heavily often look like this until spending slows.

Treat the model as a starting point: change the assumptions to the story you believe, and compare with the multiples check below.

Bear / Base / Bull

Bear
—
Base
—
Bull
—

Bear: revenue growth 3 points lower every year, EBIT margin 2 points lower, WACC 1 point higher. Bull: the opposite.

Assumptions

Sign in to change the assumptions and see the results update. Sign in

Cycle options

Margin path

Every year uses the cycle-average margin (−2.9%).

Revenue growth

  • -6%

    How much sales grow that year, compared with the year before.

    Default: the last 3 years' revenue growth (-6% a year, annual reports), fading to 3% by year 5.

  • -3.8%

    How much sales grow that year, compared with the year before.

    Default: the last 3 years' revenue growth (-6% a year, annual reports), fading to 3% by year 5.

  • -1.5%

    How much sales grow that year, compared with the year before.

    Default: the last 3 years' revenue growth (-6% a year, annual reports), fading to 3% by year 5.

  • 0.7%

    How much sales grow that year, compared with the year before.

    Default: the last 3 years' revenue growth (-6% a year, annual reports), fading to 3% by year 5.

  • 3%

    How much sales grow that year, compared with the year before.

    Default: the last 3 years' revenue growth (-6% a year, annual reports), fading to 3% by year 5.

Business

  • -2.9%

    Operating profit as a share of revenue.

    Default: through-the-cycle average of the last 12 months and the last 5 annual reports' operating margins.

  • 27.5%

    Share of operating profit paid as corporate tax.

    Default: Korea's top corporate tax rate (25%) plus 10% local income tax.

  • 10.2%

    The non-cash cost of wearing out equipment, added back to cash flow (% of revenue).

    Default: not in the statements, so 80% of capital spending (most spending replaces equipment that wears out).

  • 12.7%

    Money spent on factories, equipment, software and other long-term assets (% of revenue).

    Default: average of the last 3 annual reports (cash flow statements; equipment and intangibles).

  • 13.3%

    Stock and unpaid customer bills, less unpaid supplier bills, as a % of revenue. Each year's extra revenue ties up this much more cash.

    Default: working capital (current assets less cash and deposits, minus current liabilities other than borrowings) as a share of revenue, averaged over the last 3 years.

Discount rate

  • 2%

    How fast cash flows keep growing every year after year 5.

    Default: about Korea's long-run inflation plus real growth.

  • 4.08%

    Yield on Korea's 10-year government bond: the return with almost no risk.

    Default: Korea Treasury Bond 10-year yield on 2026-10-29.

  • 0.76

    How much the share moves when the market moves: 1 means just like the market.

    Default: 105 weeks of weekly returns against KOSPI (official index); raw beta 0.64, adjusted toward 1 and kept between 0.6 and 2.0.

  • 5.5%

    The extra return investors want for owning shares instead of bonds.

    Default: a typical premium for Korean shares.

  • 5.58%

    The interest rate the company would pay to borrow.

    Default: the 10-year yield plus a 1.5% credit spread.

Starting point

Revenue (TTM to H1 2026)
₩20T
Net debt (borrowings and leases − cash and deposits)
₩8.3T
+ Stakes and investments
₩2T
Associates, long-term financial assets and deposits (book value)
− Minority interests
₩5.2T
Shares
42,775,419
Share price
₩47,900
Market cap
₩2T

TTM = trailing 12 months: the last four reported quarters added together. "TTM to H1 2026" is the 12 months up to the latest quarterly or half-year report (H1 = to the end of June). Year 1 grows from there.

Past years and projection

Grey columns are reported results from the annual reports (after-tax EBIT at the model's tax rate), so you can check the growth and margin assumptions against the past. Years 1–5 are the model.

FY2023FY2024FY2025Year 1Year 2Year 3Year 4Year 5
Revenue₩20T₩20T₩18T₩19T₩18T₩18T₩18T₩19T
Growth−10.5%2.4%−9.5%−6.0%−3.8%−1.5%0.7%3.0%
EBIT−₩348B−₩894B−₩943B−₩550B−₩529B−₩521B−₩525B−₩540B
EBIT margin−1.7%−4.4%−5.1%−2.9%−2.9%−2.9%−2.9%−2.9%
After-tax EBIT−₩252B−₩648B−₩684B−₩399B−₩384B−₩378B−₩380B−₩392B
+ Depreciation———₩1.9T₩1.9T₩1.8T₩1.8T₩1.9T
− Capital spending₩3.6T₩2.3T₩1.6T₩2.4T₩2.3T₩2.3T₩2.3T₩2.4T
− Working capital−₩89B−₩1.2T−₩233B−₩161B−₩96B−₩36B₩17B₩72B
Free cash flow———−₩712B−₩744B−₩791B−₩850B−₩930B
Discount factor———0.9530.9090.8670.8260.788
Present value———−₩679B−₩676B−₩685B−₩702B−₩733B

Terminal value −₩22T, worth −₩18T today: 84% of enterprise value. It assumes spending settles at 110% of depreciation once growth slows to the terminal rate.

Cross-check: what the market has paid before

For cyclical businesses, analysts check a DCF against the multiples the stock has traded at through past cycles. Price / book is the usual anchor for them: P/E looks highest at the bottom of a cycle, when earnings are smallest, and lowest at the top. The price each band would give today:

LowTypicalHigh
Price / book (book value ₩311,664 a share)Now 0.15×₩56,0110.18×₩99,7210.32×₩176,0880.56×

Low, typical and high are the 10th percentile, middle and 90th percentile of month-end multiples since 2021, each against the latest report out by then, per share at today's share count; loss years and P/E above 100 are left out. Run-rate earnings are one quarter × 4, not a forecast. Model estimate based on the assumptions shown. Not a price target and not a buy or sell signal.

Sensitivity

Fair value per share as two inputs change; the middle is the current case.

WACC ↓ · Terminal growth →1.0%1.5%2.0%2.5%3.0%
3.9%—————
4.4%—————
4.9%—————
5.4%—————
5.9%—————

Now (TTM)

Market cap
₩2T
Enterprise value
₩10T
P/E
—
P/B
0.2×
P/S
0.1×
EV/EBITDA
—
Dividend yield
2.1%

Over time (at each year end)

20252024202320222021
Price₩70,300₩59,800₩153,200₩178,500₩206,694
Market cap₩3T₩2.6T₩6.6T₩7.6T₩8.8T
P/E———274.5×6.2×
P/B0.2×0.2×0.4×0.5×0.6×
P/S0.2×0.1×0.3×0.3×0.5×
EV/EBITDA———248.6×4.3×
Dividend yield1.4%3.3%———

Versus similar companies

CompanyP/EP/BP/SEV/EBITDADividend yield
Lotte Chemical—0.2×0.1×—2.1%
LG Chem—0.5×0.3×—0.8%
Hanwha Solutions—0.6×0.4×—0.0%
Hanwha6.3×0.4×0.1×—1.4%
SKC—2.1×2.0×—0.0%
KCC0.9×0.3×0.5×8.9×0.0%
Kumho Petro Chemical5.3×0.4×0.4×—1.6%
Similar companies (median)5.3×0.4×0.4×8.9×0.4%

Calculated from end-of-day prices and filed financial statements. Not a recommendation. This is not financial advice.

Also known as: Lotte Chemical / 롯데케미칼 / 011170 / KRX:011170

Source: KRX statistical information