KUALA LUMPUR (Feb 26): Shares of Lotte Chemical Titan Holding Bhd (KL:LCTITAN) tumbled to a fresh historical low on Thursday after the petrochemical firm reported its largest quarterly and full-year losses on record. 

Although losses narrowed in the fourth quarter ended Dec 31, 2025 (4QFY2025) compared to the previous quarter and reached about 87% of full-year market forecasts, analysts warned that losses could grow again this year. They expect higher depreciation and interest costs, along with ongoing pressure on profit margins.

“Our bearish view of the petrochemical sector is unchanged at the point of writing,” Maybank Investment Bank, being the most bearish analyst tracking the counter, said in a note on Thursday.

“We believe the glut [will] persist as more plants are being built, aggressively adding to active petrochemical capacities, especially in China. The anti-involution measures in China are yet to be felt, as supplies from larger and more modern plants are still coming onstream,” it added.

LC Titan shares fell as much as 6.5 sen, or nearly 18%, to 30 sen on Thursday morning. It was last traded at 31 sen at 11.08am, with over 13 million shares changing hands, valuing the group at approximately RM706 million. 

All four analysts covering the stock currently recommend 'sell', according to Bloomberg data, with a consensus target price of 36 sen. 

Year to date, Lotte Chemical Titan’s shares have declined more than 18%, extending last year’s steep losses amid persistent earnings deterioration and weakening product prices across the industry.

The group continues to face a “double whammy” — weak olefin prices due to the ongoing supply glut, and margin compression from still-elevated naphtha costs, Maybank added. The research house noted that high-density polyethylene-naphtha spreads below US$300 per tonne could result in the group registering gross losses in the coming quarters.

TA Securities in its note pointed to South Korea’s approval of its first major petrochemical restructuring exercise — including capacity integration and temporary cracker shutdowns supported by government funding — as an early sign of supply-side discipline emerging in North Asia.

This could lend medium-term support to regional olefin spreads and serve as a potential margin relief catalyst for Lotte Chemical Titan. However, the sustainability of any earnings recovery would depend on regional demand strength and the pace of broader capacity rationalisation.

TA Securities highlighted that the group plant utilisation stood at 61% in the latest quarter and 52% year to date, while the LINE project, its US$3.95 billion integrated petrochemical complex in Indonesia, operated at 80%.

“We expect utilisation to trend around 60%-65% going forward. However, despite the higher operating rate, the LINE project continues to operate at a gross loss level,” the brokerage said.

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Lotte Chemical Titan logs largest quarterly and full-year loss