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Lotte Energy Materials

020150 · KOSPI · ₩020150 · 롯데에너지머티리얼즈

₩41,450▼ ₩1,650 (3.83%)End-of-day · Oct 30, 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
−₩421B
Equity value
−₩512B
WACC
8.1%

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 ₩41,450, the model needs an operating margin of 33.7% every year (it uses −2.2%).
  • Analysts' forecasts for 2026: revenue ₩900B, operating profit — (1 broker). The model starts from the last 12 months reported.
  • Analysts' forecasts for 2027: revenue ₩1.4T, operating profit — (1 broker). The model starts from the last 12 months reported.
  • Margins ranged from −21.4% to 11.6% 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 (−2.2%).

Revenue growth

  • -2.4%

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

    Default: the last 3 years' revenue growth (-2.4% a year, annual reports), fading to 3% by year 5.

  • -1.1%

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

    Default: the last 3 years' revenue growth (-2.4% a year, annual reports), fading to 3% by year 5.

  • 0.3%

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

    Default: the last 3 years' revenue growth (-2.4% a year, annual reports), fading to 3% by year 5.

  • 1.6%

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

    Default: the last 3 years' revenue growth (-2.4% 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 (-2.4% a year, annual reports), fading to 3% by year 5.

Business

  • -2.2%

    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.

  • 13.6%

    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).

  • 17%

    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).

  • 40%

    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.

  • 4.01%

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

    Default: Korea Treasury Bond 10-year yield on 2026-10-30.

  • 0.74

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

    Default: 104 weeks of weekly returns against KOSPI (official index); raw beta 0.61, 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.

  • 5.51%

    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)
₩669B
Net debt (borrowings and leases − cash and deposits)
−₩49B
+ Stakes and investments
₩6.4B
Associates, long-term financial assets and deposits (book value)
− Minority interests
₩148B
Shares
52,365,463
Share price
₩41,450
Market cap
₩2.2T

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₩809B₩902B₩678B₩653B₩645B₩647B₩658B₩677B
Growth10.9%11.5%−24.9%−2.4%−1.1%0.3%1.6%3.0%
EBIT₩12B−₩64B−₩145B−₩14B−₩14B−₩14B−₩14B−₩15B
EBIT margin1.5%−7.1%−21.4%−2.2%−2.2%−2.2%−2.2%−2.2%
After-tax EBIT₩8.6B−₩47B−₩105B−₩10B−₩10B−₩10B−₩10B−₩11B
+ Depreciation———₩89B₩88B₩88B₩89B₩92B
− Capital spending₩225B₩111B₩74B₩111B₩110B₩110B₩112B₩115B
− Working capital−₩537B−₩117B−₩11B−₩6.4B−₩2.9B₩775M₩4.1B₩7.9B
Free cash flow———−₩26B−₩29B−₩33B−₩37B−₩42B
Discount factor———0.9250.8560.7920.7330.678
Present value———−₩24B−₩25B−₩26B−₩27B−₩28B

Terminal value −₩427B, worth −₩289B today: 69% 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 ₩32,887 a share)Now 1.26×₩27,4550.83×₩53,4421.63×₩153,2964.66×

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%
7.1%—————
7.6%—————
8.1%—————
8.6%—————
9.1%—————

Now (TTM)

Market cap
₩2.2T
Enterprise value
₩2.1T
P/E
—
P/B
1.3×
P/S
3.2×
EV/EBITDA
—
Dividend yield
0.0%

Over time (at each year end)

20252024202320222021
Price₩30,550₩23,600₩42,050₩51,900₩135,000
Market cap₩1.6T₩1.2T₩2.2T₩2.7T₩7.1T
P/E—196.2×—62.0×112.6×
P/B1.0×0.9×1.5×1.9×7.2×
P/S2.4×1.4×2.7×3.7×10.3×
EV/EBITDA—————
Dividend yield0.0%————

Versus similar companies

CompanyP/EP/BP/SEV/EBITDADividend yield
Lotte Energy Materials—1.3×3.2×—0.0%
Samsung Electro-Mechanics88.7×8.7×7.2×—0.2%
Doosan34.5×4.9×0.6×—0.4%
Hanwha Systems65.1×2.5×2.8×—0.8%
LG Innotek11.6×1.2×0.3×—0.6%
Isupetasys30.8×7.2×4.7×—0.0%
Daeduck Electronics38.8×6.0×4.4×—0.4%
Similar companies (median)36.6×5.5×3.6×—0.4%

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

Also known as: Lotte Energy Materials / 롯데에너지머티리얼즈 / 020150 / KRX:020150

Source: KRX statistical information