This is a very important news that enable us to ascertain HY is responsive enough with the market changes and had maximized their Diesel yield while reducing Gasoline when crack spread for these had gone on opposite directions.

Currently 1 USD = 4.57 MYR
.............

With such weakening of MYR against USD, seriously HY would be save haven for the long term

you only need average 12.7 USD/brl margin:
..........................................


Gross margin using above hypothetical margin (reversal to mean long term scenario)

= (10.7 million barrels/qtr ) x (12.7 USD/brl) x (MYR 4.57/USD)
= 621 million MYR ....


PBT = 541 million
PAT = 411 million
EPS = 1.37

Posted by probability > Sep 23, 2022 5:07 PM | Report Abuse X

MALAYSIA DATA: DIESEL output at 8-month high, LNG nears record

dont get confused with derivative fair value changes thats get reported in OCI as one time effects with recurring gain from currency strengths

10% rise in gross profit due strengthening USD, easily wipes out this derivative effect in a single quarter

and the gross profit is a permanent recurring event

need some common sense before you open your mouth


Posted by qqq3333 > Sep 23, 2022 10:33 PM | Report Abuse

by kebling98 > 20 minutes ago | Report Abuse

If you read annual report, they mentioned strong USD is not good to profit. Don't simply talk to favour your interestlah
==============

lol.............the AR says 10% rise in USD results in 130 million rgt loss in P/l...................note 4............. goes to show rubbish in rubbish out. .................... outsider know more than the Company/ the CFo eh?

yes, its good for those who are short-sighted, traders, trend followers and the uninformed to sell cheap to those who grasp what is being said

you comeback when the trend changes if the informed sells you cheap later


Posted by kebling98 > Sep 23, 2022 9:56 PM | Report Abuse

Haiyoh market sentiment so bad mah. Share price sure down lah. Q3 profit maybe so good also useless lah. No need promote everyday lah. What data also useless lah. Is downtrend! Downtrend!

HY no longer affected by their inventory gain/loss due to their hedging policy (it gets reported only on OCI but not on P&L)

again, all those linking oil price to refinery is absolutely incorrect

in fact, lower the oil price, the better the margin of refinery

@greatwall, yes as can be seen from above gross profit calculation

crack spread are in USD as per international supply & demand dynamics

LPG yield can be found here:

https://klse1.i3investor.com/blogs/2017/2022-09-02-story-h1627801128-HENGYUAN_How_to_calculate_its_refinery_margin_Why_share_price_hesitatin.jsp

god knows how much more they can increase both Diesel & LPG yield!

MALAYSIA DATA: DIESEL output at 8-month high, LNG nears record!

9 Sep 2022

Quantum Commodity Intelligence – Malaysia’s output of diesel reached an eight-month high in July and LNG topped 3 million mt for only the second time on record, as producers responded to soaring prices for both products.

Diesel production grew 3.9% to 1.24 million tonnes, up around 2.5% on the year to its highest level since November 2021, according to data from the Malaysian Department of Statistics.

And liquified natural gas (LNG) ticked up 1.4% to just over 3 million tonnes for only the second time on record going back to 2009.

Both diesel and natural gas markets have tightened this year sending prices soaring, especially in Europe following the war in Ukraine.


..............


Diesel at 46% yield, at today's crack USD 44.9/brl

www.tradingview.com/symbols/NYMEX-GZ1!/

Gross margin from Diesel alone

= (10.7 million barrels/qtr x 46% yield) x (44.9 USD/brl) x (MYR 4.55/USD)
= 1005 million MYR ....


PBT = 925 million
PAT = 703 million
EPS = 2.34

...

Check out LPG yield of HY in 2020....

MALAYSIA DATA: DIESEL output at 8-month high, LNG nears record!

9 Sep 2022

Quantum Commodity Intelligence – Malaysia’s output of diesel reached an eight-month high in July and LNG topped 3 million mt for only the second time on record, as producers responded to soaring prices for both products.

Diesel production grew 3.9% to 1.24 million tonnes, up around 2.5% on the year to its highest level since November 2021, according to data from the Malaysian Department of Statistics.

And liquified natural gas (LNG) ticked up 1.4% to just over 3 million tonnes for only the second time on record going back to 2009.

Both diesel and natural gas markets have tightened this year sending prices soaring, especially in Europe following the war in Ukraine.

Europe has been scrambling to find alternative supplies of natural gas after political tensions with its biggest supplier – Russia – ratcheted up after the invasion.

But Europe will have to compete with Asia for LNG supplies this winter.

Fuel oil was the only other oil product to increase in July, up 14.5% from June to 172,000mt.

Malaysia’s output of gasoline fell 2.6% to 580,000mt in July, down 3% from a year earlier.

Naphtha was 16% lower at 259,000mt, down 21% from last July.

And jet fuel production fell 11% to 243,000mt, down 34% from a year earlier.

https://www.qcintel.com/article/malaysia-data-diesel-output-at-8-month-high-lng-nears-record-8378.html

Germany Seizes Control of Russian Refineries but Has No Oil to Refine

https://www.youtube.com/watch?v=ZRZBVeNi76w

https://www.bbc.com/news/business-62924071

In a similar move in April, Germany took control of subsidiaries of Russian gas giant Gazprom.

On Friday, the German government handed control of the PCK Schwedt refinery in Brandenburg to the national energy regulator, along with stakes in two other refineries in the south of the country.

Diesel at 46% yield, at today's crack USD 44.9/brl

www.tradingview.com/symbols/NYMEX-GZ1!/

Gross margin from Diesel alone

= (10.7 million barrels/qtr x 46% yield) x (44.9 USD/brl) x (MYR 4.55/USD)
= 1005 million MYR ....


PBT = 925 million
PAT = 703 million
EPS = 2.34

expect crack spread to strengthen further tomorrow

before blindly comparing with gloves...

have you done the maths, what level of margin needed by HY to obtain an EPS of RM 1? and whats the current margin?

do you know despite current relatively good margin no one is investing further on refineries as it takes years to built and successfully commission?

do you know when the sanction on russian oil will take effect and when it will be aborted?



Posted by Phoebe > Sep 21, 2022 4:17 PM | Report Abuse

Buy and hold for 1 year? Super profit? I think this is exactly the reason HY cannot go up. TGlove plunce from RM 9 to 70c? Everyone has been bitten once. Scared of 2nd bite. I know many will says that glove and refinery is different. You cannot built refinery in 3 months. That is very true. But do remember super profit is not forever. Also, all the earning is meaningless if it is not distributed out to shareholder. Supermax earns billions and have cash of RM3billion which translate to cash per share of RM 1 but yet it is selling less than 70c. You pay 70c and in the piggy bank have RM1 waiting for you. This is excluding other asset. So why is nobody buying it?

Dont't believe..from John Lennon

https://www.youtube.com/watch?v=Dr2efHjt5Cs

when you invest on HY
.....................

you dont need to look into oil price..

you dont need to look into their hedging contracts...

you dont need to look into Other Comprehensive Income statement...

you dont need to study their management..

you dont need to see if its red chip or blue chip...

you dont need to see if any sifu recommends or not...

you dont need to believe in probability..

....

all you ever need to monitor is the fcuking 'crack spread'

nothing else matters

its so damn simple..we dont need to believe in anything else

To all naysayers that are of the opinion HY price will go down further, even to the level like MM said - RM 3, and it will never rise, you may certainly be correct. Not disputing this at all...

However, the above has no connection with the below facts that remains true:

.........

For those who cannot comprehend high level maths and pure logics, below is the minimum EPS going forward if today's current margin of Diesel maintained (assuming all other refined products barely breaks even with cost feed crude. i.e ZERO crack spread):
.........................


Diesel at 46% yield, cracks USD 45/brl

www.tradingview.com/symbols/NYMEX-GZ1!/

Gross margin from Diesel alone

= (10.7 million x 46%) x (45 USD/brl) x (MYR 4.5/USD)
= 996 million MYR .....


PBT = 916 million
PAT = 696 million
EPS = 2.32

For those who dont like very detail maths, minimum EPS going forward if today's current margin of Diesel maintained (all other refined juts breaks even with cost. i.e zerp crack spread):
.........................


Diesel at 46% yield, cracks USD 45/brl

www.tradingview.com/symbols/NYMEX-GZ1!/

Gross margin from Diesel alone

= (10.7 million x 46%) x (45 USD/brl) x (MYR 4.5/USD)
= 996 million MYR .....


PBT = 916 million
PAT = 696 million
EPS = 2.32

when you invest on HY
.....................

you dont need to look into oil price..

you dont need to look into their hedging contracts...

you dont need to look into Other Comprehensive Income statement...

you dont need to study their management..

you dont need to see if its red chip or blue chip...

you dont need to see if any sifu recommends or not...

....

all you ever need to monitor is the fcuking 'crack spread'

nothing else matters

its so damn simple, only the less educated could think other wise

confirmed..

Posted by probability > Sep 20, 2022 7:23 PM | Report Abuse X

expect crack spread to strengthen up tomorrow

expect crack spread to strengthen up tomorrow

you can use whatever lowest figures for crack spread of gasoline, diesel and jet fuel based on the crack spread chart

you will never be able to obtain EPS below the record EPS of 2017

Hi guys, just a reminder on below info. Do not blindly dispose using herd mentality. The crack spread of all products presently are way higher than what i used on below derivation.

We can wait for 1 month for our salary, 2 months is not that long.. NTA will shoot up by RM 4 by Q3 results along with below EPS.

........

Q3 - Rock bottom EPS analysis

(using lowest possible average crack spread during the period - as if it was this level every single day of 90 days in a quarter)
.........................

Using extreme conservative scenario where 50% of HY throughput is hedged where they will only reflect hedge margin at extra low 10 USD/brl, with the balance free to capture market margin

1. Diesel at 46% yield, cracks USD 39/brl

www.tradingview.com/symbols/NYMEX-GZ1!/

2. Jet fuel at 7% yield, cracks USD 29/brl

www.tradingview.com/symbols/NYMEX-ASD1!/

3. Gasoline at 35% yield, cracks USD 7/brl

www.tradingview.com/symbols/NYMEX-D1N1%21/
www.tradingview.com/symbols/NYMEX-SMU1!/

3. Rest of product yield at 12%, using Mogas 95 cracks USD 7/brl

Gross profit from (Hedged) portion:
..............................

= (10.7 million x 50%) x (10 USD/brl) x (MYR 4.5/USD)
= 240 million MYR .....(1)



Gross profit (UN-HEDGED) portion:
............................

Refining margin/brl:

= (0.46 x 39) + (0.07 x 29) + (0.35 x 7) + (0.12 x 7)
= (17.9 + 2.0 + 2.5 + 0.8)
= US $ 23.2 / brl

Gross profit:
= (10.7 million x 50%) x (23.2 USD/brl) x (MYR 4.5/USD)
= 558 million MYR ......(2)



Total gross profit (1) + (2)
= 240 + 558
= 798 million MYR

PBT = 718 million
PAT = 545 million
EPS = 1.81

Cost of Hedging Reserve at above mark-to-market pricing was 100 million gain at end of Q1.

As such for Q3 results, NTA will increase RM 4 assuming closing of Q3 (30th Sep) is at above crack spread level...

Q3 - Rock bottom EPS analysis

(using lowest possible average crack spread during the period - as if it was this level every single day of 90 days in a quarter)
.........................

Using extreme conservative scenario where 50% of HY throughput is hedged where they will only reflect hedge margin at extra low 10 USD/brl, with the balance free to capture market margin

1. Diesel at 46% yield, cracks USD 39/brl

www.tradingview.com/symbols/NYMEX-GZ1!/

2. Jet fuel at 7% yield, cracks USD 29/brl

www.tradingview.com/symbols/NYMEX-ASD1!/

3. Gasoline at 35% yield, cracks USD 7/brl

www.tradingview.com/symbols/NYMEX-D1N1%21/
www.tradingview.com/symbols/NYMEX-SMU1!/

3. Rest of product yield at 12%, using Mogas 95 cracks USD 7/brl

Gross profit from (Hedged) portion:
..............................

= (10.7 million x 50%) x (10 USD/brl) x (MYR 4.5/USD)
= 240 million MYR .....(1)



Gross profit (UN-HEDGED) portion:
............................

Refining margin/brl:

= (0.46 x 39) + (0.07 x 29) + (0.35 x 7) + (0.12 x 7)
= (17.9 + 2.0 + 2.5 + 0.8)
= US $ 23.2 / brl

Gross profit:
= (10.7 million x 50%) x (23.2 USD/brl) x (MYR 4.5/USD)
= 558 million MYR ......(2)



Total gross profit (1) + (2)
= 240 + 558
= 798 million MYR

PBT = 718 million
PAT = 545 million
EPS = 1.81

Q3 - Rock bottom EPS analysis

(using lowest possible average crack spread during the period - as if it was this level every single day of 90 days in a quarter)
.........................

Using extreme conservative scenario where 50% of HY throughput is hedged where they will only reflect hedge margin at extra low 10 USD/brl, with the balance free to capture market margin

1. Diesel at 46% yield, cracks USD 39/brl

www.tradingview.com/symbols/NYMEX-GZ1!/

2. Jet fuel at 7% yield, cracks USD 29/brl

www.tradingview.com/symbols/NYMEX-ASD1!/

3. Gasoline at 35% yield, cracks USD 7/brl

www.tradingview.com/symbols/NYMEX-D1N1%21/
www.tradingview.com/symbols/NYMEX-SMU1!/

3. Rest of product yield at 12%, using Mogas 95 cracks USD 7/brl

Gross profit from (Hedged) portion:
..............................

= (10.7 million x 50%) x (10 USD/brl) x (MYR 4.5/USD)
= 240 million MYR .....(1)



Gross profit (UN-HEDGED) portion:
............................

Refining margin/brl:

= (0.46 x 39) + (0.07 x 29) + (0.35 x 7) + (0.12 x 7)
= (17.9 + 2.0 + 2.5 + 0.8)
= US $ 23.2 / brl

Gross profit:
= (10.7 million x 50%) x (23.2 USD/brl) x (MYR 4.5/USD)
= 558 million MYR ......(2)



Total gross profit (1) + (2)
= 240 + 558
= 798 million MYR

PBT = 718 million
PAT = 545 million
EPS = 1.81

agree ular sawa of course digest slowly...but once its able to see the opportunity...he wont let go...

i must admit this ular IQ higher than everyone here

Posted by UlarSawa > Sep 14, 2022 10:41 AM | Report Abuse

Bcos Ular OKU mah. You IQ so high leh. Tulis long thesis Ular pun take very long time to digest it leh. Haiyoh. Correct?

aiyo ular, only now you are asking such a critical question, this is what all my effort to enlighten everyone, haiyo correct?

Posted by UlarSawa > Sep 14, 2022 8:35 AM | Report Abuse

Is crackspread is the only variable that important until all also use it as the main variable to calculate refinery profit. Must be something else also right. Haiyoh. Correct?

ular, isnt borrowing is actually investment...investment with a stable return unlike volatile crack spread? haiyo, correct?


Posted by UlarSawa > Sep 14, 2022 10:33 AM | Report Abuse

Budget tak cukup pakai so borrow more and more. Mana can afford to pay leh. Poor country lah. Haiyoh. Correct?

wtf..malaysia is heading to disaster if bullies are allowed to rule

aiyo Ular, what case study on HY? no case to study..its an open book....all numbers are crystal clear...haiyo, correct?

you will be surprised to see tomorrow's crack spread...live data showing refining margin is rising...

@Ular, its time people move out from volatile tech stocks to refineries...LOL!

@MM.

your lay man theory ABSOLUTELY WRONG, as they have hedged with maturities up till 2024

YOU NEED TO IMPROVE YOUR IQ..

9 million barrels of hedged instruments cannot expire within 3 months

if that happens, Q2 would have reported EPS as if its 100% hedged at 12 USD/brl margin but they reported above 20 USD/brl after derivative loss of 400 million!!

1 QTR revenue is 10 million barrels

that should be simple common sense to layman...

.........


@MM simple question to you...

what is the difference between Cash flow hedge reserve and Cost of hedging Reserve...

you do not know IFRS 9...

MM - OBVIOUSLY DO NOT KNOW A SINGLE THING ABOUT OCI...LOL!

Q3 - Rock bottom EPS analysis (using lowest possible average crack spread during the period)
.........................

Using extreme conservative scenario where 50% of HY throughput is hedged where they will only reflect hedge margin at extra low 10 USD/brl, with the balance free to capture market margin

1. Diesel at 46% yield, cracks USD 42/brl

www.tradingview.com/symbols/NYMEX-GZ1!/

2. Jet fuel at 7% yield, cracks USD 30/brl

www.tradingview.com/symbols/NYMEX-ASD1!/

3. Gasoline at 35% yield, cracks USD 7/brl

www.tradingview.com/symbols/NYMEX-D1N1%21/
www.tradingview.com/symbols/NYMEX-SMU1!/

3. Rest of product yield at 12%, using Mogas 95 cracks USD 7/brl

Gross profit from (Hedged) portion:
..............................

= (10.7 million x 50%) x (10 USD/brl) x (MYR 4.5/USD)
= 240 million MYR .....(1)



Gross profit (UN-HEDGED) portion:
............................

Refining margin/brl:

= (0.46 x 42) + (0.07 x 30) + (0.35 x 7) + (0.12 x 7)
= (19.3 + 2.1 + 2.5 + 0.8)
= US $ 24.7 / brl

Gross profit:
= (10.7 million x 50%) x (24.7 USD/brl) x (MYR 4.5/USD)
= 594 million MYR ......(2)



Total gross profit (1) + (2)
= 240 + 594
= 834 million MYR

PBT = 734 million
PAT = 557 million
EPS = 1.85

Sustainability?
...............

what a state of chronic paranoia due to past volatility on earnings of refinery

one shall talk about sustainability of earnings when stocks are trading above PE 20 may be..or the least PE 10

panicking now for a stock that barely moved up from its historic avg low?

refinery stock like HY only needs 13 USD/brl avg refining margin to deliver EPS above RM 1 consistently

now its averaging above 26 USD/brl

and we dont need RM 1 EPS per qtr to justify current price, even 40 cents consistently would do...

there are too many structural changes GLOBALLY that indicates constraints will remain due to shortage in global refining capacity and takes years (more than 5 years to build a refinery and investors are not keen despite high margin currently) unlike gloves for supply to catch up with demand...

its earnings can certainly be volatile, but the mean avg of the crack is expected to be significantly higher than previous years as intermittent shortage due to refinery maintenance, break down etc is high....

as such the odds of margin spiking intermittently is just too high going forward

this especially so considering russian sanction (which is the core of the structural changes that we are basing here)

keyword: sanctions are expected to last years

@JConnor, good sharing...

Posted by JConnor > Sep 13, 2022 7:48 PM | Report Abuse

https://oilprice.com/Energy/Energy-General/The-Global-Fuel-Market-Will-Remain-Tight-For-Years-To-Come.html

The Global Fuel Market Will Remain Tight For Years To Come

spot on sslee... great to have you here

well if my hunch is right on your age, my hunch on your thought process is also likely to be correct then

i have nothing to learn from your advise... TQ


Posted by anthonytkh > Sep 13, 2022 6:09 PM | Report Abuse

Probability, I can be a teenager or a really old dude or even be another Lee Thiam Wah. That’s below the belt from you. And I ain’t a lady that gets sensitive about age questions

what a boring rhetoric..

are you in late 60s or 70s?

Posted by anthonytkh > Sep 13, 2022 5:55 PM | Report Abuse

A public listed company is not defined by opportunities and circumstances when it comes to its share price. Why are we here? The company’s performance or its share price movements?

Record breaking profits with no real enthusiasm from “investors”. Cash balance reduced, debtors and creditors both increased, liabilities way higher than equity. That’s at least 3 quarters in a row last time I checked

The MTN? Look at my above paragraph…

hope by then (mid 2020s..) we have anthonytkh repeating the same rhetoric here...LOL!

Posted by BoomBerg > Sep 13, 2022 5:53 PM | Report Abuse

Fuel markets to stay tight till mid-2020s as refining shrinks
Reuters |
Sep 13, 2022 05:09AM

By Ahmad Ghaddar
LONDON (Reuters) - Crude oil refining capacity has shrunk by a record 3.8 million barrels per day from March 2020 to mid-2022 as demand expanded, setting the stage for fuel markets to remain very tight until at least mid-decade, International Energy Forum and S&P Global (NYSE:SPGI) research showed.
The fall in capacity comes as oil demand rose by 5.6 million bpd over the same period, the report released on Tuesday said.

@tehka, MM defeated by these:


Posted by probability > Sep 13, 2022 4:16 PM | Report Abuse X

@MM.

your lay man theory ABSOLUTELY WRONG, as they have hedged till 2024

YOU NEED TO IMPROVE YOUR IQ..

9 million barrels of hedged instruments cannot expire within 3 months

if that happens, Q2 would have reported EPS as if its 100% hedged at 12 USD/brl margin but they reported above 28 USD/brl!!

1 QTR revenue is 10 million barrels

that should be simple common sense to layman...


Posted by probability > Sep 13, 2022 4:26 PM | Report Abuse X

@MM simple question to you...

what is the difference between Cash flow hedge reserve and Cost of hedging Reserve...

you do not know IFRS 9...

MM - OBVIOUSLY DO NOT KNOW A SINGLE THING ABOUT OCI...LOL!

you should know why i never came to HY forum since 2017, but only after Mar 22...

a company is not a like an animal where it has inherent property that never changes..

a company is defined by the opportunities & circumstances that arise..

its extremely dynamic and even more so - stock trade/investments

Posted by anthonytkh > Sep 13, 2022 5:33 PM | Report Abuse

Lol probability wants to know the truth

Truth’s been there for 5 to 7 years when it comes to the company. Truth’s been there for the past 5 months when it comes to the share price

Trade it like I said before

aga agak numbers ok...but not agak agak feelings

agak2 numbers thats what i am providing

Posted by UlarSawa > Sep 13, 2022 4:37 PM | Report Abuse

Not agak agak then how to predict leh. Ada lesen punya analist pun pakai agak agak to TP mah. Not like this meh. Haiyoh. Correct?

no we cannot use feelings..and agak agak

we must debate and find the truth...

take the challenge?

Posted by MoneyMakers > Sep 13, 2022 4:30 PM | Report Abuse

Aiyaa if confident HY just buy lo..cheap ma

If scared (smart) then stay away lo..simple ma

Alot info provided alrdy..ownself decide lo - later dont cry mother father when collapse to rm3

@MM simple question to you...

what is the difference between Cash flow hedge reserve and Cost of hedging Reserve...

you do not know IFRS 9...

MM - OBVIOUSLY DO NOT KNOW A SINGLE THING ABOUT OCI...LOL!

those chose to listen to MM will lose out big opportunity to make money!


Posted by MoneyMakers > Sep 13, 2022 4:23 PM | Report Abuse

Aiyaa whatever calculation/explanation no use alrdy

At this stage all alrdy made their bed (choose side) - those choose ignore ‘pending’ 1.07Bil hedging loss need sleep with huge stock loss lo

Pending to become unrealized half a billion gain be end of Q3!!


Posted by MoneyMakers > Sep 13, 2022 4:21 PM | Report Abuse

Aiyaa whatever calculation/explanation no use alrdy

At this stage all alrdy made their bed (choose side) - those choose ignore ‘pending’ 1.07Bil hedging loss need sleep with huge stock loss lo

OCI accounting has COHR which is forecasted mark-to-market valuation of forward contracts based qtr closing date....

these are forecasted transaction at prevailing spot rate..the hedging instrument has not expired

it changes the moment spot rate changes back to to how it was at Q1 closing

@MM.

your lay man theory ABSOLUTELY WRONG, as they have hedged till 2024

YOU NEED TO IMPROVE YOUR IQ..

9 million barrels of hedged instruments cannot expire within 3 months

if that happens, Q2 would have reported EPS as if its 100% hedged at 12 USD/brl margin but they reported above 28 USD/brl!!

1 QTR revenue is 10 million barrels

that should be simple common sense to layman...

yes, its distributed with front end loading...

Posted by BobAxelrod > Sep 13, 2022 4:12 PM | Report Abuse

Moreover, to be Hedging for 24 months down the road, seems like a task for Hercules........or God of Thunder, Thor Ordinson.

Post removed.Why?

@MM.

your lay man theory is wrong, as they have hedged till 2024

9 million barrels of hedged instruments cannot expire within 3 months

if that happens, Q2 would have reported EPS as if its 100% hedged at 12 USD/brl margin but they reported above 25 USD/brl

1 QTR revenue is 10 million barrels

that should be simple common sense to layman...