KUALA LUMPUR (May 2): CIMB IB Research has downgraded Lotte Titan Chemical Holding Bhd (LCT) to “Hold” at RM3.67 with a lower target price of RM3.69 and said LCT’s 1Q19 core net profit was only 6% of house old full-year estimate (4% of consensus) due to compressed spreads, and higher depreciation and taxes.

In a note April 30, the research house said it cut house earnings forecasts and target price to RM3.69 as a result of the 1Q underperformance, based on unchanged CY20F EV/EBITDA of 4x.

“We downgrade from Add to Hold; spreads in Apr are even weaker than in 1Q19 due to the naphtha price rally, putting 2Q19F earnings at risk,” it said.