confirmed up if sellers exhausted, if you understand the dynamics of share price movement

@smartyalek - If sellers exhausted, how can the share price go up? When there's no seller, there's no higher asking price; then no buyers to bid it up.

You hope? Good luck

@demusangking there goes your fantastic article. Well-written. But predictability wise, not so much.

I think whether to buy or not to buy should be an independent decision rather than asking for opinion, especially opinions coming from public forum. As Hengyuan has shown, following other is dangerous when one doesn't know what he is doing, even if the price he enter represent good value.

1)KING OF EPS RM3.03
EPS has little meaning on the profitability of a company.
Prove: Find a crap company that makes money, shrink their O/S small enough so it has highest EPS amongst Bursa. That doesn't turn a crap into a great.

2)LOW IN PE ONLY 4
Similar to point 1, low PE has little meaning whether a company is undervalued or overvalued
Prove: There are many low PE companies that remain single PE while many high PE companies remain high over their entire existence

3)NEW MEMBER OF MSCI SMALL CAP INDEX COMPONENT.
No correlation with assessing the profitability of a company. Pure speculation in the fact that fund managers have to buy HY because it becomes part of the index

4)NEW MEMBER OF BURSA MIDD CAP INDEX COMPONENT
No correlation with assessing the profitability of a company. Pure speculation in the fact that fund managers have to buy HY because it becomes part of the index

5)BEST COST EFFECTIVE IN EURO4 UPGRADE
No idea what this is

6)NEW WTI CRUDE TO BOOST 2018 EPS
Highly unpredictable variable

@tehka

1. I never argue HY is not a good buy; I'm more against the optimism on HY based on short-term result. Again, good or bad depends on your time horizon, opportunity cost and required return. As long it doesn't result in permanent loss of capital.

2. No stock is a permanent good or bad buy. A stock is great at one price; okay at another; and worse at a higher price.

3. Risk comes from not understanding what you are doing. I can give you a list of stocks that I think is of good potential (2018 IB's stock picks got plenty too), but you could still lose money. Even in the case that you bought at the cheaper price than me.

4. Giving you alternative to HY will perhaps make you slightly rich in the short-term but change nothing in the long-term, because you have not improved your investing skills. In contrast, I am giving you the wrong incentive. If you make money off what I told you, it reinforce the habit that you will come and ask me or others for more stock tips. Rather than setting you down this wrong path, I would rather show you how to think for yourself so you know how to pick stocks.

5. I have written a few articles on here, you can easily find them under my ID. And if you like go to my blog www.musingzebra.com

It isn't how hard or how in depth your analysis is, but whether your analysis has good predictability. And so far I haven't seen anyone that predict qtr earnings can consistently get it right. Credit should be given based on predictive power, not on the basis of amount of information.

“Having more information doesn’t necessarily improve decision-making. We know from studies of horse racing than when handicappers receive more information about horses and riders, they become proportionately more confident even though they are no more likely to pick the winner. When analysts have too much data, there’s a danger they won’t see the wood for the trees.” Marathon Asset Management

"I’m reminded of a study which showed that as the number of variables requiring analysis increase, the odds of success decline, yet the confidence of participants soar due to extensive time and energy invested." Allan Mecham

"The harder you work, the more confidence you get. But you may be working on something that is false" Charlie Munger

Looking at the share price everyday is harmful to your health

Do you think my detailed analysis would help you when the analysis in this forum is enough to filled trilogy of LOTR? lol. That - is the real ego.

The idea of supporting or not-supporting HY has a lot to do with internalism. Associating the stock you own with your own pride and ego makes it hard to change your stance and belief. Thinking that being wrong will damage your reputation. The confusion between self-worth and net-worth is a serious one.

The idea of supporting or not-supporting HY is a funny one. Investing is an operation of probability - being the probability of being right vs probability of being wrong. There's no right or wrong decisions; only good or bad decision. If you support a stock (or your own view) as if it is Manchester Utd, Chelsea or any of your fav football club, you are going to have a hard time in investing.

@leslieroycarter common, attribute HY's serious drop to non-stop barking can just as easily flip around and say it is caused by over optimism and someone giving TP 24-90 right?

You don't apply the strength of the EMH to a market i.e Bursa without taking into account the timeframe. As an example, during extreme end of greed and fear, where homogeneity of the market breaks down, EMH obviously is extremely weak, but during normal period, the market on aggregate is likely to be semi to fully efficient (ignoring the obvious case where collectively doesn't always apply to individual stock)

Rule of thumb: When someone start study/predict forex impact, it is good to stop reading what he has to write

@investor77, what does highest EPS in bursa has to do with business return?

Anyone armed with basic mathematic skills and decent IQ knows how to make predictions and analysis. But what matters is not about making prediction, but understand the difference between what's knowable and unknowable; what's predictable and unpredictable; have an appreciation for randomness and complexity, and most of all - understand that they can be wrong. This goes for those reading someone analysis. How not to be fooled by analysis. Analysing is hardwork; hardwork is appreciated; but it is only meaningful as far as it helps one to make good decision.

Far from trying to say I am right and you are wrong, but this is a wake up call to anyone that likes to throw around macro economics stuffs i.e WTI, crack spreads and make quarterly earnings prediction. Most that come out to support HY is are genuine (of course, there are many that are borderline on being a charlatan), it just goes to show how we underappreciate the complexity of macro stuffs. And trying to use complex variable to predict quarterly earnings, which involve its on level of complexity, is nothing but impossible.

I wrote it many times before and in here (http://musingzebra.com/the-problem-of-reading-someones-work/), many will go and tell you their prediction, but no one ever tells you their error rate - their chance of getting it wrong. And if you know the reality that trying to predict macro variable is as good as flipping a coin, you will know you want to listen to these predictions will huge amount of salt. Not because they're bad, but it's the reality that's complex. And not to mention the fact that every one has access to public information, we haven't even address the issue of market expectation and how this information are priced in. (Asking individual opinion is futile, individual cannot explains the market)

There's no karma in market, only good or bad consequences. And that starts with critical thinking. Avoid overconfidence and know what you don't know. Too many people think they know when in fact they don't know what they don't know. Hence they went an extrapolate that high crack spread will produce high earnings. As I already said, the problem is not facts and figures. All the facts and figures can convince that you think a stock is going to do well next quarter, that's why I am being called a dog when I am being skeptical. The problem lies in how to think well. You can have all the information in the world, but if you can't use what is between your ears, no amount of facts/figures can save you.

What's mind blogging is despite the known fact that no one can consistently predict quarterly EPS, this doesn't prevent investors from continuing to predict them. Overconfidence in the domain of investing is hard to get rid of.

The biggest sins of investors:

1. Confusing between trading and investing. Nothing wrong with trading. But confusing between the 2 is deadly.

2. Trader: Pretty much anyone that uses qtr/annualised EPS x PE. Emphasis much on qtr EPS, but when EPS is off the mark, start emphasise on long-term criteria i.e quality, cash flow etc. The tone change from 'don't miss the boat, with surge when qtr comes out' to 'this quality stock is for long-term hold'

3. Peer comparison: Comparing EPS & Share price with other counter i.e PetDag. As if the relative difference between EPS tells you anything about the value of a business.

Naysayers or no naysayers, this underlies the futility trying to predict qtr EPS. Not just the difficulties to predict it accurately, but more critically, the little relevance between EPS and how business create value, which determine the long-term return of shareholders.

The all so popular valuation (which isn't valuation but shorthand) of EPS x 'PE multiple that one justify for any reasoning (always higher than current multiple)' is a clear confusion of how the stock market works. Everyone wish their stock goes to the PE they desire and everyone can live happily ever after.

Lesson 1: When someone tell you he can predict QR earnings based on macro economics such as crack spread, you should assign his chance of getting it right at 50%.

There are enough facts and figures in here to fill the trilogy of LOTR, but it didn't improve prediction accuracy. Welcome to non-linearity and randomness.

Yes of course. Anybody that has no intention of owning HY for at least a time frame that encompass 12 Chinese Zodiac signs shouldn't buy at all.

TP RM24-90, of course you need to be long-term to get there.

The one that tout patience yet explain everyday minute changes in price

Interesting to see so many trolls in here. They feel better when they put others down.

You are right. Insanity means when someone can 'know' who push up RM2 in a single day.

You know what's really pondan? That is coming out with a reasoning that China FM is 'aggressive' after CNY. A reasoning border on insanity.

Why would the share price gap up if QR is above expectation? Since above expectation is the market EXPECTATION.

When result meets market expectation - high frequency, low magnitude.
When result lays outside market expectation - low frequency, high magnitude

Yes unlike someone that can value replacement value > earnings power value, I truly don't dare to value. World champion HY as valued by world class investor.

"The probability of HY price going below 15 is almost zero, going above is a certainty" - A lack of imagination and a true sign of overconfidence. When someone assign something with a probability of either 0% or 100%, he will give you a sign of certainty, comfort and assurance, the so called hedgehog, the one that appear on the TV program to convince people, but as often, the one that get it so wrong.

A good company has to have the ability to pay dividend to shareholders. But whether a company choose to pay dividend or not to has no bearing on whether a company is good or bad. Just as there are many good companies that never pay a single cent of dividends, there are equally many good companies that do.

That's why I say it is a good one from you. You just invented a new security analysis and valuation that surpass Ben Graham. More emphasis on something that has more uncertainty than one that provide more certainty.

Nice one. Earnings based valuation is more 'practical' than replacement value. Good on you.

That is a weird logic. If I am smarter as you like to think, I would've give you a precise valuation down to 2 decimals figures, don't you agree? The issue is not 'smart' or 'dumb'. But because what I am saying goes against your belief, that's why you think im being a smartass, whereas you have no issue when other smart sifu tell you what you want to hear, right? You would gladly laud their intelligence and knowledge when what they say AGREE with your viewpoint, but despise those that is going to pull apart your deep belief. You call them paid by IB's, conman, deceptive, disrupt community, create confusion.

Those that goes against your viewpoint usinig nonsense, you call them talk cock. Those that goes against you using logic reasoning, you call them 'trying to be smart but fail in life'.

It is precisely I am 'smart' to know what I don't know that I am being careful and conservative rather than giving nonsense TP, which all of you crave and take it as a sign of certainty, comfort and confirmation.

If one is not ready to take contradictory information or question his belief, no amount of logic, reasoning, facts and figure can change his mind. But it only takes a trivial information (china funds is buying!) to convince themselves that they're sitting on a gold mine.

@satan118, do you find much comfort from someone that can give you a TP of 24-90 compare to another person that can't offer you a TP? And will the person that can give you a TP be more 'accurate' than one that can't?

@EngineeringProfit, I am not smart to know how much HY would be at the end of the year. That's no different from asking me where KLCI will be at the of the year. Anyone that can tell you will be either has really good forecasting skills, but more often than not, being overconfident.

@Kingchek, the problem is not whether what I say is backed with factual figures. If factual figure can make everyone great investors, won't HY be trading at the price where you want it to be right now? Since all factual figures are public, why can't the market be more rational and efficient?
Clearly it lies in the person's way of thinking. And your way of focusing on the outcome (Where the share price is right now) to make judgement (that someone saying HY should worth RM2 is wrong) than the process shows factual figures is not the issue, it is your own thinking, of focusing on outcome rather than process that is going to create bad decisions.

This reminds me of the scammer that send newsletter to 10,240 investors, making market prediction. Half of newsletter predict markets to go up next week; down for the other half. Do this for consecutive 10 weeks, and 10 out of those investors will fall for it because the chances that one can correctly predict the market 10 times in a row is so small. That's the problem with focusing on outcome to make judgement.

Does it matter how you derive your valuation? I can use countless valuation method to value a stock, but they still count as valuation. Just because you are not using earning, does that mean your RM90 per share is BS number? Or you just put it out there to shiok yourself and everyone.

And honestly, 90 per share does create a lot of questions:

1. How can costing based valuation higher than earnings based valuation? RM90 vs RM24 per share

2. Costing based valuation is presumably more 'reliable' than earnings based valuation since the former relies on assets, whereas latter rely on predicting future earnings. Generally, it should be other way round, reliable figure such as NTA (asset valuation) tend to be lower than earnings based valuation.

3. So either one get his cost based valuation totally wrong, or earnings based valuation totally wrong, but either way, the logic falls apart. Since if cost valuation > earnings valuation, it implies that the business is destroying shareholders value!

Just in case one doesn't want to explain because it is complicated. Just call it too 'academic'.

@Formerbank As far as my understanding the title on this page writes 'Hengyuan (4324) Hengyuan Refining Co | Overview', i don't see any 'supporters only' or 'anyone who own HY only' kind of words on here. So I believe, anyone can participate in this forum, less those that enjoy personal attack and talk BS.

It can be quite productive to see who has a better calibration skill even if one doesn't own HY.

You sure you didn't? Not hard to Google. Maybe you got too confused after issuing so much TP from RM15 to RM100.

"THATS THE REASON RAIDER ASK U ALL NOT TO SELL MAH...BCOS THERE ARE PLENTY OF VALUE AND ROOM FOR APPRECIATION LOH...!!
IF MKT CAN ACCORD SAME AS NESTLE 3% RETURN ON FREE CASHFLOW....THEN HENGYUAN SHOULD WORTH RM 27 BILLION OR STAGGEERING RM 90 PER SHARE LOH...!! "

How does a discussion about coefficient between a stock that carry low PE and imply undervaluation turn out to be talking cock because HY is 'cheap' is beyond me. Did I say HY isn't undervalued? Stupid.

RM42 is your lower bound TP. You told me at least RM90 few months ago

Yes, when you can't argue logically, you just call him talk cock. Easy right.

Probability, yes I don't understand your statement.

Your best friend come out with a statement that it is logical that all low PE stock should be undervalued, so I refute his statement by showing those example. And you come out to explain both statements provided by me is the same, which clearly isn't.

And i've no clue now you started to explain 'as long earnings are the same..' which adds nothing to explain both statements are the same. So I don't get you either.

We are not talking about E or P, we are talking about those 2 statements. And clearly saying those 2 statements carry the same meaning is wrong. One more:

1. All mammals are animals
2. All animals are mammals

Statement 1 is not the same as Statement 2. Mammals is a subset of animal class, not 100% of all animals. Undervalued stocks are only a subset of all low PE stocks, not 100% of all low PE stocks.

Probabilistic thinking is counterintuitive. So one shouldn't make intuitive assumption before thinking properly.

@probability really? They are the same? Wow. Let's make this exciting:

1. All buddhists are terrorists
2. All terrorists are buddhists.

Is this the same? If all terrorists are buddhists, does that logically mean all buddhist are terrorists? Similarly, if all undervalued stocks have low PE, does that really mean all low PE stocks are undervalued? Think properly.

Based on your statement, you find the logic that 'low PE stock is not undervalued' as absurd. So it seems like you're confused by assuming there is zero probability that low PE stock cannot be undervalued. Hence you should read those 2 statements again. You confuse my writing because you don't understand those statements.

Don't confuse between these 2 statements:

1. All low PE stocks are undervalued
2. All undervalued stocks have low PE

Does your TA requires the praying to work or that's optional?

@Zhuge_Liang All promoters extrapolate current trend is going to continue - This 300+ mil. per qtr can continue, which is what, 40-50% ROIC a year is sustainable for the long-term. They could be right. I am just a skeptic. OF course, this doesn't factor in the price you buy. It depends on the degree of your belief if this can be realised.

You won't like what I suggest. I buy things that are out of trend.