- Euro 4M Mogas Project

This is a crucial project to ensure the going-concern of our Company and sustainability of the business to meet the industry’s future requirements. Our project team is developing the Basic Engineering Design and Front End Engineering Design (FEED) work with a reputable contractor and licensor with support from SHPC to ensure that the product specification is compliant to Euro 4M mogas specifications upon its planned implementation in October 2018. Following our approval process, the Final Investment Decision (FID) for the project will be presented to the Board in 2nd quarter of 2017. Thereafter, the projects and technology teams will focus on project execution, targeting to complete the construction during the second half of 2018. To minimise downtime outside the Turnaround period, both the equipment tie-ins and completion are targeted during Major Turnaround 2018 (TA2018).

RISK: If the refinery is not able to produce Euro IV compliant products by the regulatory deadline, then our customer will import their product requirements, which are Euro 4M compliant. These imports cannot be co-mingled with the products that the refinery is able to produce now as they are Euro 2 compliant. Through the Product Offtake Agreement (POA), our customer can contractually use our facilities to throughput their products. This means that the operations and financial performance of HRC would be significantly impacted during the period in which we are unable to produce Euro 4M products post the compliance date. Management and SHPC’s current perspective is that we are confident that the project is on track and our refinery is able to meet the regulatory timeline by leveraging on SHPC’s technical resources and guidance. Management is reviewing the project progress weekly to ensure challenges and hurdles are effectively dealt with to protect the project schedule.

Major Turnaround 2018 (TA2018)

The major turnaround in 2018 is driven by legislative requirements of the Malaysia Department of Occupational Safety and Health (DOSH). HRC subscribes to the DOSH Statutory Safety Inspection (SSI) programme which is a structured integrity inspection and assurance programme. Part of the requirement is establishing a baseline of equipment inspection status, which requires all equipment to be opened in 2018. A full inspection of the equipment during TA2018 will thus enable us to renew our license to operate as issued by DOSH. With this inspection, our refinery is in a good position to negotiate a four-year turnaround cycle post-2018 with DOSH. During the turnaround, maintenance work will be executed to ensure the integrity and reliability of operation of all equipment. The scope is established based on previous inspections, our technical advisor’s experience and issues we observed during the current plant operation. Scope definition, preparation, resourcing of materials is an important 2017 deliverable. A significant investment for equipment renewal that will take place in TA2018 is the replacement of the internals and top dome of the catalyst regenerator of the Long Residue Catalytic Cracker Unit (LRCCU). The life of these internals is 18 years and replacement is due in 2018, as confirmed during the inspections in the previous turnaround in 2015.

RISK: Planning and execution is crucial to a successful and timely Turnaround. Any unexpected incident or emergent scope arising during the event could result in an extended shutdown resulting in a financial impact. The project team which has been assigned to this crucial project comes with extensive experience in HRC’s previous turnarounds and operates within the well established governance framework. Moreover the regenerator top dome project is executed in partnership with contractors that have experience with the manufacturing and installation in similar units elsewhere. The manufacturing of the new dome is not schedule critical.

Additionally, the Turnaround is crucial as it is the only opportunity to modify equipment for safety, efficiency, reliability, increased capacity or for economic reasons. Several future projects which will be tied-in into the plant during TA2018, are also being developed in 2017.

Potentially a takeover target
http://www.theedgemarkets.com/article/petrochina-trading-chief-take-global-rivals-major-expansion-drive-%E2%80%94-sources

Very good.

Crack spread now higher at USD10.111
http://www.cmegroup.com/apps/cmegroup/widgets/productLibs/esignal-charts.html?code=D1N&title=DEC_2017_Singapore_Mogas_92_Unleaded_%28Platts%29_Brent_Crack_Spread_&type=p&venue=0&monthYear=Z7&year=2017&exchangeCode=XNYM&chartMode=dynamic

Holiday mood already

shallow ...

but then there are many tp now.

joeshare i remember otb sifu was saying buffer 30% for better entry price.

We are not only smart investors we are warrior investors.

http://klse.i3investor.com/blogs/koonyewyinblog/140092.jsp
Hengyuan: Sell, Hold or Buy - Koon Yew Yin
Author: Koon Yew Yin | Publish date: Fri, 1 Dec 2017, 02:23 PM

Thank you everyone. Congratulation!

The schedule is correct. They stick to it.

Posted by Ooi Teik Bee > Nov 29, 2017 09:20 AM | Report Abuse

The management had given a schedule to account department to release quarter result, there is a schedule to follow.
Initial schedule is 30/11/2017, I check out that the quarter result may be released a day earlier in view of good performance.
May be the quarter result will be released on 29/11/2017.

Thank you.
Ooi

Results to be released tomorrow is confirmed.

kimhaolian ... haha
ok will now take note of any selling by the big institution.

Petronm now debt free. So fast!

Can approach ASB's broker to sell a block of shares says 5% if the price is right with a discount (normally willing to consider 10% to 15% less). Holding of HY shares by ASB are currently designated under Trading category. Anyone interested?

Do not discount investors from China! The news could be even more insider in nature.

Can refresh the link to the Reuters news?

Impactful article for investors to make impactful decision. Thank you

Use same raw materials.
http://www.theedgemarkets.com/article/lotte-chemical-sees-petchem-market-stable-firm-2020

dragon ... the banner not only support upstream but lack of refineries to process the crude oil could possibly result in higher crack spread. :-)

http://www.reuters.com/article/us-asia-oil-appec-trafigura/oil-demand-may-exceed-supply-by-up-to-4-million-bpd-by-2019-trafigura-idUSKCN1C10AM

But whenever I pump petrol, I see many cars in the Shell Station not at the Petron Station. I have been observing this scenario at many locations. Is the retail segment of Petron really doing well? I want to know more.

Tqvm sifu OTB. Sell gasoline in RM should be more than enough to offset RM denominated expenses.

Q1 when USD dropped 1.4% against RM, HRC made FX gain due to trade receivable in RM.
Q2 when USD dropped 2.9% against RM, HRC made FX losses due to certain RM denominated expenses.
Q3 will see USD drops further.

OTB sifu can you enlighten us why it is FX favourable to HY. Tqvm.

Don't think high oil price can sustain. Better oil price hovers at 50 to 60 per barrel. Good for everybody.

Refiners normally operate better in low crude price environment. Less volatile.
Here is the mitigating factor since crude oil price has shot up.
http://www.enanyang.my/news/20170926/%E4%B8%8E-opec%E6%AC%A1%E8%BD%AE%E7%AB%9E%E4%BA%89br-%E7%BE%8E%E5%9B%BD%E9%A1%B5%E5%B2%A9%E6%B2%B9%E4%B8%9A%E5%BC%BA%E6%94%BB%E4%BA%9A%E6%B4%B2/
美国于2015年取消原油出口管制，加上页岩石油产量激增，且国际油价站上每桶50美元，促使更多美国业者向海外寻求买主，重点是强化与亚洲炼油厂的关系。今年迄今，至少已对中国、日本及韩国共出口3800万桶，比2016年全年对亚洲出口量还多出6倍。

Having China independent refiner on board is good. Synergy on sourcing for cheaper crude.

https://www.japantimes.co.jp/news/2017/09/25/business/corporate-business/japans-cosmo-oil-evaluates-new-sources-crude-market-braces-new-standards/#.WcjQ2LIjHIU

Refiners in the world’s top oil-consuming region, including Chinese independent processors known as teapots, are sourcing more oil from across the world as OPEC-led output curbs limit the group’s exports and make barrels priced off Middle East benchmark crude more expensive than cargoes from other regions such as the U.S. and Europe.

https://www.platts.com/latest-news/oil/brussels/refinery-margins-to-benefit-from-low-product-26808915

http://www.thestar.com.my/business/business-news/2017/09/25/margins-of-refiners-petrochemical-companies-seen-improving/

I am puzzled.
Q1 when USD dropped 1.4% against RM, HRC made FX gain due to trade receivable in RM.
Q2 when USD dropped 2.9% against RM, HRC made FX losses due to certain RM denominated expenses.

Can someone explain. Thx

Bonus issue ex-ed

https://www.cnbc.com/2017/09/14/north-korea-conflict-could-cripple-these-oil-and-chemical-facilities.html

The area at risk represents about half of Asia's crude-refining capacity, or roughly 2.2 million barrels per day, along with much of the chemical production that supplies the region.

Morgan Stanley sees strong refining margins into 2020
in General Energy News 09/09/2017

Lower oil prices, strong demand and limited new refining capacity additions are expected to boost global refining margins to the end of the decade, Morgan Stanley said in a note.
Oil demand growth is expected to reach 1.4 million barrels per day (bpd) in 2018, similar to this year’s expected growth, Morgan Stanley said.
Crude oil distillation unit (CDU) additions are set to increase by 700,000-800,000 bpd next year, leading to a higher crude intake from existing refining capacity and stronger margins as a result.
New regulations aimed at lowering sulphur content in marine fuel from 2020 will further boost margins as demand for gasoil and diesel will grow.
As a result of the stronger outlook for refining, the bank upgraded Spain’s Repsol and Turkish refiner Tupras to ‘overweight’ due to both companies’ strong refining performance.
The bank maintained the existing ‘overweight’ rating for European oil majors Royal Dutch Shell and BP, whose downstream operations represent around 30 percent of cashflow.
Source: Reuters (Reporting by Ron Bousso; Editing by Edmund Blair)

Why IOI is selling its downstream business for RM3.9 billion now?
Is IOI bullish on upstream oil palm business? If true then good news.

You are right Esos is like a bonus the company P&L will be hit.
Why not if win-win! You need a team to scale the company higher and higher.

Another ex date on 19/9/2017. Great counter because the directors are willing to share. You have quarterly dividend payment, periodic bonus issue and increase in share price ... for those complain about issuance of new share via ESOS.

Today dividend entitlement ex-ed. But price up again to pre-ex level. Great counter!

CPO price up!
IDR strengthens against USD!
Unbilled property sales up!
Borrowing down!

Can't ask for more up except the price :-)

Petrol price up 4 sen! Refined products price up.

Both affordable housing developers but very different. 拍馬屁也不能趕上 Matrix Concept.

Unbilled sales set to go higher. Stay invested!
Melbourne property near completion. Profit will up.

Defending government a defense to the counter?

Still too rich yes too rich the valuation for yield investor.

If he is willing to sell his shares to institutional investors, do you think he will accept to receive lower dividend? After bonus issue he should at least be getting same, if not larger, amount of dividend.

Boring but it is value investing. Underlying assets are getting stronger with the completion of the MRT and the Kajang-Bangi flyover. With the good take-up rate in the TR Residence and North Shah Alam projects, the unbilled property sales are set to go higher. Plantation earnings are also set to go higher with higher CPO prices and higher production. IDR/USD had stabilised at 13,300 level. Its USD borrowings are being liquidated with the free cash flow from plantation. Its value is trailing Matrix with RM300 million gap, will be happy to see the gap narrowing.

Unbilled property sales are set to go higher. Stay tuned.

The disposal of shares is a sign of confidence to the company prospects. The acquirers are institutional investors who have managed to convince Dato Lee to sell down. Dato Lee is confident that his interest will not be diluted as the pie will get bigger. Kudos to Dato Lee!

Sell is always harder than buy.

Where to find.
Yield + growth.
Darling to institutional funds. Hold on and stayed invested.