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HENGYUAN: 58th AGM minutes and update on Notice of Requisition received

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Publish date: Tue, 27 Mar 2018, 09:13 AM
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Dear Hengyuan Shareholders,

Good morning, I send out below email last night (with minor edit on misspelling and sentence)

If you have not send in your “Notices of Requisition” please do so when you are free.

Thank you.

Subject: 58th AGM minutes and update on Notice of Requisition received.

Dear Surya Suharman

Corporate Affairs Department

Email: HRCPD-Corporate-Affairs@hrc.com.my

Dear Ms. Gene,

Corporate Legal Department.

Please kindly give an update every Friday on the number of “Notice of Requisition” received.

I intend to attend the upcoming 59th AGM with my prepared questions group under: (Draft)

  1. Review of 58th AGM minutes
  2. Review of Financial report 2017.
  1. Inventories (Breakdown list).
  2. Trade Receivables (Breakdown list and credit term given)
  3. Other receivables and prepayments (Breakdown list and credit term given)
  4. Deposits with banks and bank balance (Breakdown list and interest rate)
  5. Trade and other payables (Breakdown list and credit term obtained)
  6. Borrowings/refinancing (Breakdown list, interest rate and financial study of refinancing)
  1. Plant performance
  1. Plant capacity and storage tank capacity?
  2. Plant yield (material balance)?
  3. Plant chemical usage (dosing rate)?
  4. Addition plant upgrade and expansion (progress, addition capacity, quality improvement, yield improvement, capex and etc)?
  1. Major share holder Shandong Hengyuan Petrochemical Group Company Limited.

http://hrc.com.my/index.php/shandong-hengyuan-petrochemical-company/

Refer above:

  1.  SPHC is one of the Top 100 Leading Enterprises in Shandong and one of the Top 500 Chinese Chemical Enterprises, achieving multiple accolades over the years.

Question: Any China official website to verify above accolades?

  1. The completion of the acquisition of a 51.0% equity stake in HRC via MHIL in December 2016, marks the dawn of a new era for HRC. The natural synergy within the Group, which is equipped with the latest production technologies and know-how, will only serve to further enhance HRC’s profitability and continue to strengthen its position as a leading regional refinery products supplier.

Question: Please list down what are the derived synergies achieved so far?

  1. Corporate governance and transparency.
  1. Currency hedging, done by whom at what frequency and how much each time.
  2. Forward purchase/sale, done by whom at what frequency and what lot size.
  3. Crude oil: Suppliers purchase price control and management.
  4. Products: Customers selling price control and management.
  5. Inventories and trade receivable control and management.
  6. Cash and bank balance control and management.
  7. Publishing monthly data of Crude oil received, Products dispatched and opening/closing stocks.
  8. Crack spread? (Any internet website figure to make accurate reference to)
  9. “Our success in securing this new financing package is testament to HRC’s commitment to enhance our performance in a compressive and tangible manner. We continue to reach out and engage our stakeholders, including the banking community with the aim of building long-lasting and mutually-beneficial relationships,” Wang added.

http://hrc.com.my/index.php/hengyuan-refining-company-berhad-secures-favourable-financing-of-rm1-7-billion-usd430-million/

Question 1: Any dialogues, presentations to Research Analysts and Fund Managers in Malaysia or China to provide constructive communications on matters concerning the Company and the Group during 2017?

Question 2: Does the board aware of any China or Foreign Fund Invested in Hengyuan share?

  1. Market share price.
  1. Price volatility. Any pump and dump or dump to benefit Call warrant insurer?
  2. What are the rules and regulation governed Call warrant? Is Henngyuan get to share any profit from the call warrant insurers made?
  3. Market share price: Fair/undervalue/overvalue?
  4. Refer to below blog author David Tan: Valuing Hengyuan - Discounted Cash Flow Method.

Using the discounted cash flow method of valuation based on the assumptions and estimates presented above, HRC is valued at RM19.55 per share.

Question: Any comment on the valuation and assumptions make to come out with RM19.55?

  •  
  1. What should be Hengyuan intrinsic value? (Please give the method, assumptions and calculation use to arrive at this intrinsic value)
  1. Dividend
  1. Why only 2 cents interim dividend for financial yearend 2017 when company make EPS of RM 303 cents?
  2. Does BOD agree with China Securities Regulatory Commission Chairman Liu Shiyu's Speech at the 2nd Assembly of CAPCO Members' Representatives on important of dividend?

“Thirdly, commitment to cash dividends: Paying cash dividends is the primary way to return wealth to investors, the underlying duty of a joint-stock corporation, and the source of a stock's intrinsic value. Investing in stocks is said to have eyes on the future. As long as a company has growth potentials, its stock price will rise and bring returns to its shareholders, regardless of paying dividends or not. This notion is only partially right. But the returns here are not profits generated by the issuing companies but gains from trading at premium. If a listed company never offers cash dividends, trading of its stocks is nothing but a speculative rolling game, the one like passing flowers until the drum beat stops, not to mention the uncertainties in a company's growth. A company who chooses not to pay dividends but to expand blindly by taking on new project may fail to pay in the future when these projects go south.

Listed companies are allowed to withhold dividend payments if it is for long-term considerations and with approval by the shareholders' meeting. However, indefinite and unjustified withholding is not acceptable. In international practices, steady and stable cash dividend payout often signals financial health and operational soundness of a listed company. In other words, sustained failure to pay dividends for no reason could be signals of accounting fraud or internal mismanagement. There are listed companies who generously pay out dividends. We commend the practice.  However, there are also "iron roosters" who haven't plucked a single feature for many years. The China Securities Regulatory Commission (CSRC) has been noted of this problem. We won't fail to ensure accountability and will respond with firm measures as warranted.”

  1. Formal Dividend policy?
  2. Will the board consider rewarding the shareholders with share split, bonus share, and free warrant?
  3. Minority shareholders proposed resolutions.

 

I need the 58th AGM minutes to know what had been discuss so that I can follow up with any outstanding issues discussed during the 58th AGM. Thus please send me a copy of the minutes or email me the company secretary email address so that I can directly email and ask for a copy. 

Once the 2017 audited financial report is available. I will prepare the Questions in its complete form and will send a soft copy to you so that you can forward to the BOD for them to prepare the answers. This I believe will speed up the Q&A during the 59th AGM

 

Thank you

 

Best Regards

Lee Soon Sheng

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Discussions
3 people like this. Showing 12 of 12 comments

Jeffbkt

If you compare Q3 and Q4, it is quite obvious that Q4 manufacturer expenses and admin expenses in Q4 are 20M and 10M more respectively if compare to Q3. if you attend the AGM, you should ask this question why cause such a volatility and how the management is going to reduce such volatility. I think you should avoid question 3 as I dont think any listed company can answer your question on the price volatility and the IV of the company share.

2018-03-27 10:27

Sslee

Dear Jeffbkt
Sorry for the late reply, I just come back from colleague birthday dinner.
Refer Q4 2017 financial report: http://hengyuanrefining.listedcompany.com/newsroom/HRC_Q4_2017.pdf
Higher operating expenditure in the current quarter was attributed to increased maintenance activities and spend on basic engineering design packages relating to regulatory-driven projects. (Page 17/18)
As of higher Admin expenses most likely due to addition yearend bonus pay to the staffs for making record breaking profit for Year 2017.
I had asked INSAS BOD of intrinsic value of INSAS during AGM and suggest a value of RM3 for INSAS. Dato’ Sri Thong agreed with the figure but cannot tell me why market undervalue INSAS share price. I had learned my lessons and this time, I will email my questions to the board and ask them to prepare in black and white answers with facts and figures.
No question is off limit at the AGM. BOD should treat minority shareholders as if we are fund managers interest to invest in this company.

Thank you

2018-03-27 22:45

YJInvest

Hello Mr Lee, my family and I have sent our notices to HRC but have not received any confirmation from them despite sending a follow-up e-mail and calling them this morning. What do you suggest I do to ensure that HRC does not wriggle themselves out by saying they did not receive our notices? Thanks.

2018-03-28 12:17

YJInvest

An additional note. My friend who is also a shareholder received an auto reply from Surya Suharman's e-mail address stating that he is away on leave till Monday 5/6. Who else at HRC can be contacted to ensure that our requisitions have indeed been received? Thank you.

2018-03-28 12:19

Sslee

Dear YJInvest,
Thank you very much for your support. I manage to make a call to Mr. Surya and he explained, so far Corporate Affairs Department had received about 30 emails and he had printed out the Notice of Requisition form from each email. Once he had collected not less than 50 voting members he will send the file to Company Secretary to do verification with share register on the ownership of the share. If the share ownership and number of voting members are confirmed by company secretary, the Corporate Affair Department will send an acknowledge notice to all the senders saying that the legal requirement of not less than 50 voting members where the average paid-up sum for each member exceeds RM500 per member had been fulfilled therefore the: REQUISITION TO MOVE AND VOTE ON RESOLUTIONS REQUIRING SPECIAL NOTICE UNDER SECTION 322 OF THE COMPANIES ACT 2016 AT THE 59TH HENGYUAN AGM, is legally valid and binding. The proposed resolutions will be put to vote during the upcoming HENGYUAN 59th AGM.
To those HENGYUAN Shareholders that had yet to send in their Notice of Requisition, please spare some of your time during the coming weekend to prepare and send in your Notice of Requisition. Together we will and shall make history as the first group of minority shareholders to move and vote on our proposed Resolutions in the AGM. Our names will be forever recorded in BURSA Malaysia History for achieving such feat.
Thank you.

2018-03-28 19:34

YJInvest

Thank you Mr Lee. I am sure that our fellow minority shareholders will meet the call and send in their respective notices. My family and I thank you for being pivotal in spearheading this move to look after the interests of all shareholders, especially the minority ones. We will continue to monitor your blog for updates. Thank you again.

2018-03-28 20:52

CharlesT

All shareholders better support this exercise io crying father crying mother or dreaming for skyhigh tp....

2018-03-28 20:57

Ekkram

Copy paste and email to HRCPD-Corporate-Affairs@hrc.com.my only? Easy.

2018-03-28 20:59

Sslee

Repost from my Hengyuan comment.
Dear paktua73, joekit, depeche and Henyuan shareholders,
Thank you for sharing your inspiration poems. Sharing is caring. Hard times will always reveal true friends. When tough times come, you know who your true friends really are. Who run and who are always there for you, console you and help you to rebuild.

I received a WhatsApp update from Mr. Surya (Hengyuan Corporate Affairs department) this morning “As at yesterday, we have now breached 40 notices” My profound thanks to you for your support you gave to me.
To Hengyuan shareholders that yet to send in their Notice of Requisition, please spare some of your time during the coming weekend to prepare and send in your Notice of Requisition. (You need to just hold 1 lot to qualify as voting members)
https://klse.i3investor.com/blogs/Sslee_blog/151687.jsp
Together let us make history as the first group of minority shareholders to move and vote on our proposed Resolutions in the AGM. Our names will be forever recorded in BURSA Malaysia History for achieving such feat

To our Christian Brothers and Sisters,
God loved his human children so much that he sent his only begotten son to suffer, to be crucified & take on all the sins on the world and save humanity. Let’s us in this Good Friday and everyday to serve, and to show compassion, empathy and love for our fellow human beings. Have a blessed day!

Thank you.

2018-03-30 11:36

kaliaoki

same vote as ekovest and Iw city ?

2018-03-30 11:38

Sslee

Repost from Hengyuan comment.
Dear Hengyuan shareholders,
Received another WhatsApp message from Mr. Surya; “Hi Mr. Lee Correction total as to date is only 29. Few of the same people sending in several times which we have corrected. Thanks.”
Week 1 we have 29 notices not a very bad result. Let see what we will get in week 2?
The Notices of Requisition is not about whether the resolutions will be voted for or against by Major shareholder. It is everything about exercise our collective minority shareholders right and change the current culture/mindset where major shareholder with the control of the board can do whatever he like and not answerable to the shareholders. I had drafted a guide questions and once the 2017 audited financial report is available. I will prepare the Questions in its complete form and will send a soft copy to the BOD for them to prepare their answers. I believe no question is off limit at the AGM. BOD should treat minority shareholders as if we are big fund managers interest to invest in this company.
https://klse.i3investor.com/blogs/Sslee_blog/151963.jsp
As a fallback plan if Board is really unable to give addition dividend due to the need of reserving earning for the immediate Capex. I will hard pressed them to make a commitment of better dividend in the future and meanwhile reward us the minority shareholders immediately with share split, bonus share, and free warrant?
I really need not less than 50 shareholders to send in their Notice of Requisition to put the resolutions to vote and make history so that the major shareholder can no longer treat us the minority shareholders lightly.

Thank you.

2018-03-30 13:21

YJInvest

Good morning Mr Lee and Other HRC Shareholders, I just received a confirmation from HY's Corporate Affairs Dept on receipt of my notice. I assume that the minimum 50 notices have been received and hence the reason why HRC is now confirming accordingly. Mr Lee, would you mind reconfirming the same with Mr Surya at HRC. Thank you.

2018-04-02 10:11

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