thanks sslee

their procurement head should be sacked for taking such risks in the first place

refineries are supposed to make margin no matter how oil price fluctuates as long as crack spread is positive

even HY did not lose money in 2020 when oil price drop below 10 USD/brl

there is no obligation for them to operate to lose 600 million

they can pay their employee wages for 12 qtr (3 years) without operating for that amount

thanks for the very valid queries sslee, especially on the high crude oil price they bought above selling price

they might as well stop operating and go for MTA activities if they cant buy crude cheaper than what they can sell

to all, i am truly sorry that my insights on HY profit generation is far out from reality

it appears that there are many practical factors that affects their margin such as the way the crude supply contract is made with petronas and sales with Shell..

HY may not had the flexibility to switch crude supplier or sales to other buyer than Shell Malaysia (whose fuel demand for diesel could have been muted during the period) within a very short time

90% if their crude supply and sales are to these parties which they probably cannot change within a short span

the only consolation is no one including HY is disputing the available market margin of diesel and gasoline based on means of platts singapore (MOPS)

good luck

Low crude oil price will drive demand for gasoline and diesel, refining margin will further expand (check out the crack spread tomorrow).

Russian oil price cap seems to be having positive effects on crude oil....and general market.

7 more days before sanction takes place.

well said...thats occam's razor

in fact 50% of their products are imported, their refinery output is much lesser

Posted by kebling98 > Nov 28, 2022 7:42 AM | Report Abuse

Macam petron crude distillation capacity of 88,000 barrels per day
3months =7.92m only lah
But impossible to run 100% rate one mah
3month Sales 8.6m
Obviously
Petron import finished product lah
If you read Agm reports
You know they import gasoline loh
Thats why cost per barrels for petron is so high loh
When gasoline price in July dropped drastically
Petron suffer loh. They import expensive gasoline in June and sell cheap cheap in July lei

ok ok

Posted by UlarSawa > Nov 26, 2022 12:50 PM | Report Abuse

Ular bukan cakap you lah. Ular cakap someone else lah. That one also cakap facts n figures one and cakap eps 2.00 lah. Haiyoh. Correct?

@ular, i have never stated Q3 minimum EPS 2

dont quote something i have not said

@upshare, i didnt get you

i have shared EPS expectation without hedging of inventory and with hedging of inventory (if you see my last posting)

HY has an inventory 3.5 million barrels

As worst case scenario, if you would like to consider inventory loss at 10 USD/brl, the loss will be:

= 3.5 million barrels x 10 USD/brl x 4.5 RM/USD
= 157 million

You can even add the loss above on below if you wish, you will still obtain an EPS of 1.20




Posted by probability > Nov 24, 2022 6:57 PM | Report Abuse X

simple rock bottom EPS derivation for HY going forward:
........................................

Diesel & Jet Fuel combined yield (46% Diesel + 7% Jet Fuel) of 53 %,
lets conservatively use: 50%

Diesel & Jet Fuel crack assumed averages going forward 30 USD/brl (not difficult considering it had averaged 43 USD/brl last 6 months)

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

Gross margin from Diesel & Jet Fuel alone:

= (10.5 million barrels/qtr x 50% yield) x (30 USD/brl) x (MYR 4.50/USD)
= 708 million MYR ....

PBT = 628 million
PAT = 477 million
EPS = 1.59
..........

The above is assuming zero contribution from Gasoline which they had hedged at least 18 million barrels at about 10 USD/brl (good for 4 quarters output, i.e at 3.6 million barrels gasoline per qtr at 35% yield).

HY also hedges their inventory to protect themself from any changes to oil price. This can be seen by their Q1 results which was not helped by the rise in Crude oil price.

This is the advantage HY has over other refineries like Petron while having almost zero output of Fuel Oil as a complex refinery (Fuel oil is at negative 31 USD/brl crack spread)

its very straight forward

the only risk i see possible is if HY had not hedged their inventory sufficiently causing a dip in margin along with the drop in oil price

in whichever case, i see the effects in HY will be way more cushioned or dampened by their active refining margin hedging

Q4 will be good too considering that now even gasoline margin had risen up


Posted by Permutation > Nov 24, 2022 7:08 PM | Report Abuse

@ probability.
Looking at petron result, what is your take on HYC coming result ? What possible shock can one expect? TQ

@sslee,

PetronM did not hedge their inventory (probably insufficiently hedged), they had to sell at their retail gas stations as per the latest market price for the refined oil they bought from their refinery at high price earlier..

thats the only simple explanation i can think of

Mogas95 crack spread had also risen more than 10 USD/brl against Brent:

https://www.tradingview.com/symbols/NYMEX-AV01!/

https://www.investing.com/commodities/brent-oil

simple rock bottom EPS derivation for HY going forward:
........................................

Diesel & Jet Fuel combined yield (46% Diesel + 7% Jet Fuel) of 53 %,
lets conservatively use: 50%

Diesel & Jet Fuel crack assumed averages going forward 30 USD/brl (not difficult considering it had averaged 43 USD/brl last 6 months)

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

Gross margin from Diesel & Jet Fuel alone:

= (10.5 million barrels/qtr x 50% yield) x (30 USD/brl) x (MYR 4.50/USD)
= 708 million MYR ....

PBT = 628 million
PAT = 477 million
EPS = 1.59
..........

The above is assuming zero contribution from Gasoline which they had hedged at least 18 million barrels at about 10 USD/brl (good for 4 quarters output, i.e at 3.6 million barrels gasoline per qtr at 35% yield).

HY also hedges their inventory to protect themself from any changes to oil price. This can be seen by their Q1 results which was not helped by the rise in Crude oil price.

This is the advantage HY has over other refineries like Petron while having almost zero output of Fuel Oil as a complex refinery (Fuel oil is at negative 31 USD/brl crack spread)

@i3lurker, thanks for the details

@Bob, 8% refining gain means.... for 10.5 million barrel sales volume per qtr, they needed to process only 9.7 million barrel of crude oil

you do the maths, what will be the gross profit they make even with average product margin of 1 USD/brl (crack spread of 1 USD/brl against crude) when crude oil price is 80 USD/brl

HY refined oil output is higher than crude oil processed. Below is the last 2 annual report information before they stopped disclosing this.

Imagine the profit they make at current high crude oil price when output is higher than input (refinery processing gain).



2012 annual report Page 52:
.................

Revenue and Gross Margin

In 2012, your Company recorded a 29 per cent increase in sales volume
which resulted in a 35 per cent year-onyear revenue growth to RM15 billion.

Your Company sold 40 million barrels of products with a yield of
8 per cent over the 37 million barrels of crude processed.


2013 annual report Page 12:
.................

Revenue and Gross Margin

Your Company registered RM14.7 billion of revenue in 2013 and this is
lower by 3 per cent compared to year 2012 of RM15.1 billion mainly due to
lower average product prices. In 2013, total volume sold reduced by 0.2 million barrels to 40 million barrels of products.

The refinery processed 37.1 million barrels of crude and with a refinery
yield of 8 per cent.

there is only two enemy...PAS and corruption...

fcuk you religion and racial advocacy..for your own short term political interest..

you are just dust n bones at the end..simple fact all of us deny

you are not going to be reborn as your childrens with same race and religion...

live like water or chose to be a rock

MCA and MIC should have the balls now tp voice or never....

else dont advocate on a losing battle for own short term interest

ask all chinese and indian to convert to islam or migrate.. (i totally support this)

simple as that

its time for MCA and MIC to put a stand to UMNO....to join PH or withdraw from the BN coalition

only reason malaysia has not become like afghanistan or pakistan...economy is still in goodshape with oil ressrves..

yes..it would have take over the grassroot....root cause of all issues to begin with

Posted by Sslee > Nov 20, 2022 1:41 PM | Report Abuse

Once PAS take over minister of Education then its gameover for Malaysia.

so then...what business has future in Malaysia?

at least HY is an international business located in Malaysia

LOL...legalizing LSD would be better as will provide greater tolerance to multireligious and multiracial country

Posted by Sslee > Nov 20, 2022 11:20 AM | Report Abuse

The cure or solution to solve Rakyat suffering is legalised ketum. So that everyone can feel heaven from earth.

BN top head confirmed barbarian ma...

Posted by UlarSawa > Nov 19, 2022 2:20 PM | Report Abuse

Ular not a weatherman also cakap ular emotional kah. You see PH supporter barbarian or not. Haiyoh. Correct?

dont be emotional ular...

Posted by UlarSawa > Nov 19, 2022 1:24 PM | Report Abuse

Ular not weatherman leh. Haiyoh. Correct?

yes, you are stating what will happen...i am stating what should happen..

different interest and arguments here

Posted by UlarSawa > Nov 19, 2022 1:13 PM | Report Abuse

To you is National Issue first and you can win all the Urban seats but you cant win all the rural seats as they more concern what the improvement for their constituency leh. Thats the Urban & Rural divide lah. Haiyoh. Correct?

nope, national issue is far too big...to be overweighed by constituency short term needs

Posted by UlarSawa > Nov 19, 2022 1:08 PM | Report Abuse

What happen even chg gorment again the same MP is elected. That means another 5 yrs no development like the 4 yrs ago. No lah. Enuf of that lah. Haiyoh. Constituency improvement first then National Issue. Haiyoh. Correct?

yes as long as ruling govn is changed to PH

Posted by UlarSawa > Nov 19, 2022 1:03 PM | Report Abuse

Ular more on candidate not party this time leh. After voted PH won. But MP n State Assembly man pun takda kerja one. What the candidate can do for the constituency is more important leh. Even your party win and your constituency no improvement for what lah. Other ppl constituency get alot of improvement but your own constituency kanasai nothing being done. You want like this kah. Haiyoh. Correct?

i see, yes winnable candidate... but what is the benefit on stating it....we can bet like stocks to make money ma?

we are here to tell which is a better candidate..so by these debates we may have a better outcome in the far future if not near



Posted by UlarSawa > Nov 19, 2022 12:59 PM | Report Abuse

Ular ada own opinion siapa are winnable candidates leh. Not emotional like you all leh. Win or Lose is depend on rakyat vote leh. Not Ular can decide one leh. Ular only tilik siapa can win only leh. Haiyoh. Correct?

@ular, on your tebrau or sg buloh fruits

these fruits though sweet are from branches that is coming from a big tree with rotting roots...eating it will only sustain the rotting tree

its time to chop of this tree (BN or PN) and replace with a healthy one (PH)...though you can expect some of its initial fruits can be sour..

simple rock bottom EPS derivation for HY going forward:
........................................

Diesel & Jet Fuel combined yield (46% Diesel + 7% Jet Fuel) of 53 %,
lets conservatively use: 50%

Diesel & Jet Fuel crack assumed averages going forward 30 USD/brl (not difficult considering it had averaged 43 USD/brl last 6 months)

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

Gross margin from Diesel & Jet Fuel alone:

= (10.5 million barrels/qtr x 50% yield) x (30 USD/brl) x (MYR 4.50/USD)
= 708 million MYR ....

PBT = 628 million
PAT = 477 million
EPS = 1.59
..........

The above is assuming zero contribution from Gasoline which they had hedged at least 18 million barrels at about 10 USD/brl (good for 4 quarters output, i.e at 3.6 million barrels gasoline per qtr at 35% yield).

This is the advantage HY has over other refineries like Petron while having almost zero output of Fuel Oil as a complex refinery (Fuel oil is at negative 31 USD/brl crack spread)

latest crack spread update: Diesel @42 USD/brl, Gasoline @7 USD/brl, Jet Fuel @31 USD/brl
..........................

LOW SULPHUR GASOIL CRACK SPREAD (1000MT) FINANCIAL FUTURES (CONTINUOUS: CURRENT CONTRACT IN FRONT)GOC1!
GOC1!NYMEX
42.115
D
USD
+0.312
(+0.75%)
MARKET CLOSED


SINGAPORE MOGAS 92 UNLEADED (PLATTS) BRENT CRACK SPREAD FUTURES (CONTINUOUS: CURRENT CONTRACT IN FRONT)D1N1!
D1N1!NYMEX
2.027
D
USD
+0.646
(+46.78%)
MARKET CLOSED

SINGAPORE MOGAS 95 UNLEADED (PLATTS) VS. SINGAPORE MOGAS 92 UNLEADED (PLATTS) FUTURES (CONTINUOUS: CURRENT CONTRACT IN FRONT)SMU1!
SMU1!NYMEX
See more on advanced chart
5.052
D
USD
+0.067
(+1.34%)
MARKET CLOSED

SINGAPORE JET KEROSENE (PLATTS) DUBAI (PLATTS) CRACK SPREAD FUTURES (CONTINUOUS: CURRENT CONTRACT IN FRONT)ASD1!
ASD1!NYMEX
See more on advanced chart
30.992
D
USD
−0.452
(−1.44%)
MARKET CLOSED

crack spread is strengthening further, you will see it rise further tomorrow

Even Q4 is going to be excellent..

HY will be a net cash company that is going to regularly provide dividends.

simple rock bottom EPS derivation for HY going forward:
........................................

Diesel & Jet Fuel combined yield (46% Diesel + 7% Jet Fuel) of 53 %,
lets conservatively use: 50%

Diesel & Jet Fuel crack assumed averages going forward 30 USD/brl (not difficult considering it had averaged 43 USD/brl last 6 months)

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

Gross margin from Diesel & Jet Fuel alone:

= (10.5 million barrels/qtr x 50% yield) x (30 USD/brl) x (MYR 4.50/USD)
= 708 million MYR ....

PBT = 628 million
PAT = 477 million
EPS = 1.59
..........

The above is assuming zero contribution from Gasoline which they had hedged at least 18 million barrels at about 10 USD/brl (good for 4 quarters output, i.e at 3.6 million barrels gasoline per qtr at 35% yield).

This is the advantage HY has over other refineries like Petron while having almost zero output of Fuel Oil as a complex refinery (Fuel oil is at negative 31 USD/brl crack spread)

simple rock bottom EPS derivation for HY:
........................................

Diesel & Jet Fuel combined yield (46% Diesel + 7% Jet Fuel) of 53 %, conservatively use: 50%

Diesel & Jet Fuel crack assumed averages going forward 30 USD/brl (not difficult considering it had averaged 43 USD/brl last 6 months)


Gross margin from Diesel & Jet Fuel alone:

= (10.5 million barrels/qtr x 50% yield) x (30 USD/brl) x (MYR 4.64/USD)
= 730 million MYR ....

PBT = 650 million
PAT = 494 million
EPS = 1.64
..........

The above is assuming zero contribution from Gasoline which they had hedged at least 18 million barrels at about 10 USD/brl (good for 4 quarters output, i.e at 3.6 million barrels gasoline per qtr at 35% yield).

This is the advantage HY has over other refineries while having almost zero output of Fuel Oil (at negative crack spread) as complex refiner

Going forward, simpler derivation to use on minimum possible EPS per QTR:
......


Diesel & Jet Fuel combined yield (46% Diesel + 7% Jet Fuel) of 53 %, conservatively use: 50%

Diesel & Jet Fuel crack assumed averages going forward 30 USD/brl (not difficult considering below news)

Worst of Europe’s Diesel Crunch Will Hit in Spring

https://www.bloomberg.com/news/articles/2022-11-09/worst-of-europe-s-diesel-crunch-won-t-hit-until-spring?utm_source=google&utm_medium=bd&cmpId=google

Gross margin from Diesel & Jet Fuel alone

= (10.5 million barrels/qtr x 50% yield) x (30 USD/brl) x (MYR 4.64/USD)
= 730 million MYR ....

PBT = 650 million
PAT = 494 million
EPS = 1.64
..........

Posted by probability > Oct 2, 2022 9:21 PM | Report Abuse

Malaysia Diesel output (MT):

Apr: 728,887
May: 886,360
June: 1,189,158
July: 1,237,929
August: 1,633,000

It cannot be too far from below:
..................................

Posted by probability > Oct 7, 2022 10:52 PM | Report Abuse

Diesel at 46% yield, at say crack spread of USD 43.6/brl

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

Gross margin from Diesel alone

= (10.5 million barrels/qtr x 46% yield) x (43.6 USD/brl) x (MYR 4.64/USD)
= 977 million MYR ....


PBT = 897 million
PAT = 681 million
EPS = 2.27

petron corp would have huge impact from gasoline price dip at the end of qtr from their retail segment, you cannot compare with pure refiner like HY

below remains

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

MALAYSIA DATA: Diesel output jumps 32%

https://www.qcintel.com/article/malaysia-data-diesel-output-jumps-32-gasoline-up-14-9038.html

Malaysia’s diesel production jumped 32% month-on-month to 1.633 million mt in August

Posted by probability > Oct 2, 2022 9:21 PM | Report Abuse

Malaysia Diesel output (MT):

Apr: 728,887
May: 886,360
June: 1,189,158
July: 1,237,929

a naysayer repeating a demoting post...once already read by the invested in HY will no longer have any value by reposting

however, a promoter repeating a valuable information that often gets swept away by flood of nonsense post (including those which does not add any info on the stock like some of Ular's chit chats - but i admit Ular does at time adds value to the valuation by the forumers)...needs to be repeated.

reason, these info can be overlooked by investors elsewhere (non HY) and may pull them in to HY when they read...as fresh buyers comes in it may help the stock

one can argue demoters post may act as a deterrant to the newcomers but..but the odds are high that its fueled more by jealousy than any real intention to helps others selflessly..

it deprives healthy discussion to debate on what should be the fair valuation...

However, i must add that simply posting with the objective of speculating others objective, talking about the promoters or demoters without a more concrete justification...all the time and flooding the forum is truly annoying

Give a like to these statements from Ular..:)

Posted by UlarSawa > Oct 9, 2022 10:55 AM | Report Abuse

Haiyoh. Keep reposting the same post pun very much like playing broken record also leh. Be creative sikit leh. At least change the banner leh. Same one see few times pun basi leh. Haiyoh. Correct?

Posted by UlarSawa > Oct 9, 2022 11:03 AM | Report Abuse

Playing broken records is like no new idea to post and keep reposting the same post repeatedly leh. Be creative sikit leh. Can rephrase it or add new words or not. So boring leh. Read once is ok. Read twice still ok. Read thrice getting boring leh. Not to mention want to read countless times siapa so c2pig want to read again lah. Haiyoh. Correct?

@cactus81,

we do not have crack spread chart for mogas95 against brent as such we use the below two charts (mogas92 crack against brent and the difference between mogas95 and mogas92 to derive the crack spread of mogas 95 against brent)

Gasoline Mogas 92: https://www.tradingview.com/symbols/NYMEX-D1N1%21/
Gasoline Mogas 95 premium: https://www.tradingview.com/symbols/NYMEX-SMU1!/

from above, current crack: -1.17 + 2.84
= 1.67 USD/brl

Posted by cactus81 > Oct 8, 2022 7:19 PM | Report Abuse

@Probability
Malaysia petrol is ron95 but the d1n1 is refer to ron92. Any relation?

Amazing its 59.5 USD/brl now...the way its going it may even deliver its marker cap in a single quarter..


Posted by probability > Oct 7, 2022 10:52 PM | Report Abuse

Diesel at 46% yield, at say crack spread of USD 45/brl

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

Gross margin from Diesel alone

= (10.7 million barrels/qtr x 46% yield) x (45 USD/brl) x (MYR 4.64/USD)
= 1027 million MYR ....


PBT = 947 million
PAT = 720 million
EPS = 2.40

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

today's Diesel crack spread: 55 USD/brl

Expect Monday reading to be even higher...

ok thanks for the explanation Rabbit2..