After falling stock prices due to last year's liquidity crisis, Lotte Group is showing signs of recovery this year. Last week, LOTTE Chemical and Lotte Shopping continued their upward trends, drawing investors' attention.
According to the Korea Exchange on the 23rd, LOTTE Chemical closed at 70,500 won on the 21st in the KOSDAQ. The stock price increased by about 32% over seven trading days from 53,400 won on the 12th. The expectation of a rebound in LOTTE Chemical's performance has grown recently due to forecasts that the Russia-Ukraine war, which has persisted for three years, will soon come to an end.
If Russian oil and petroleum products are supplied to the global market again, the burden of material and supplies procurement costs for domestic petrochemical companies is likely to decrease significantly. According to the Korea Petroleum Association (KPA), South Korea imported 5.4% of its total crude oil volume and 24% of naphtha, a raw material for petrochemicals, from Russia before the war in 2021.
Lotte Shopping closed at 66,000 won, up 2,000 won (3.13%) compared to the previous day on the 21st. The stock price, which had been hovering around 50,000 won since liquidity crisis rumors at the end of last year, surged 10.73% in just three days. The stock price skyrocketed after global investment bank Morgan Stanley raised its investment opinion on Lotte Shopping by two notches in a report published on the 18th. Morgan Stanley changed its previous 'sell' (reduce weight) opinion to 'buy' (increase weight) and adjusted the target price from 59,000 won to 74,000 won, an increase of 25%.
Lotte Group's ranking by market capitalization has been steadily declining for several years. After ranking 10th in 2021 with a market cap of 13.077 trillion won, Lotte Group fell to 11th in 2022, 12th in 2023, and plummeted to 19th as the liquidity crisis intensified last year. At the end of last year, amid concerns about liquidity, Lotte Group began implementing self-rescue measures, including providing Lotte World Tower as collateral and selling low-yield assets.