Probability is a measure of 'likeliness' that an event will occur - there are no 100% certainty.
Followers
23
Following
2
Blog Posts
14
Threads
14,466
Blogs
Threads
Portfolio
Follower
Following
2022-05-12 18:29 | Report Abuse
yup, govn is getting money from Petronas thats minting money anyway
2022-05-12 18:15 | Report Abuse
At current market cap, with current cash flow, the payback is only 6 months. Market will again wake up to these facts over the weekend..
2022-05-12 18:13 | Report Abuse
For the last 30 days average refining margin, every single day - had been higher than 20 $/brl . Market got spooked by tech stocks sell off (no logic for such high PE anyway).... Such sell off will only create stronger foundation going forward.
Its a good thing that its happening at such low price level of HRC... you will never regret holding on to it.
After tomorrow, you have only about 10 trading days before results.
2022-05-11 19:05 | Report Abuse
DISTILLATE FOCUS
Gross margins are currently higher for making diesel (almost $60 per barrel) than for gasoline ($45 per barrel) reflecting the relative shortage of middle distillates
https://www.iqstock.news/n/rpt-column-diesel-shortages-lift-refining-margins-record-kemp-3872709/
Like that even Hengyuan give discount by $20/brl and AIR FREIGHT to US can make $30/brl margin already...
2022-05-11 19:00 | Report Abuse
yup, peace guys... thanks klee
2022-05-11 13:37 | Report Abuse
its peaceful coz market is still sleeping on Hengyuan
What Hengyuan delivered at its peak qtr (90 days) in 2017, Hengyuan is delivering every 30 days now...
but market is unable to see this and thinks its an imaginary illusion
unlike 2017 which was a short term phenomenon - a temporary blip due Hurricane Harvey, current situation (lack of new capacity investment) is acknowledged as structural change which can last half a decade to resolve
nevermind, let it be awaken gently (coz it became a heart patient in 2017)..
2022-05-11 10:20 | Report Abuse
i am happy if crack spread stabilize at 13 USD/brl in the near term
long term even 11 USD/brl is enough to propel Hengyuan to RM 40 at PE 10
2022-05-11 09:53 | Report Abuse
gd morning pang72, lets hope market wake up again on hengyuan today
2022-05-11 09:49 | Report Abuse
oil price slight drop has absolutely no effects on hengyuan except on its inventory valuation at end of qtr (its just a stock check), all that matters is solely crack spread
any traders selling hengyuan coz of momentary oil price drop is unbelievable foolish and its opportunity for new comers
i cannot believe the crack spread had been at this level last few days
we only need 13 USD/brl for TP 24 at PE5
2022-05-09 23:46 | Report Abuse
"Refinery margins could nearly double and be sustained at high levels for the next half-decade, with global fuel markets seeing sustained lower supply due to a lack of investments," the brokerage stated.
........
Global research firm Morgan Stanley on Monday said that Reliance Industries Ltd is on a path towards a $20 billion-plus EBITDA
https://www.livemint.com/companies/news/ril-to-clock-20-bn-plus-ebitda-by-end-2022-says-morgan-stanley-11652095391914.html
2022-05-09 23:44 | Report Abuse
"Refinery margins could nearly double and be sustained at high levels for the next half-decade, with global fuel markets seeing sustained lower supply due to a lack of investments," the brokerage stated.
........
Global research firm Morgan Stanley on Monday said that Reliance Industries Ltd is on a path towards a $20 billion-plus EBITDA
https://www.livemint.com/companies/news/ril-to-clock-20-bn-plus-ebitda-by-end-2022-says-morgan-stanley-11652095391914.html
2022-05-09 22:56 | Report Abuse
Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman said on Monday the gap between crude prices and prices for jet fuel, diesel and gasoline was around 60% in some cases due to lack of investment in refining capacity.
https://www.reuters.com/world/middle-east/saudi-energy-minister-says-gap-between-crude-prices-fuel-mobility-prices-around-2022-05-09/
2022-05-09 22:55 | Report Abuse
Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman said on Monday the gap between crude prices and prices for jet fuel, diesel and gasoline was around 60% in some cases due to lack of investment in refining capacity.
https://www.reuters.com/world/middle-east/saudi-energy-minister-says-gap-between-crude-prices-fuel-mobility-prices-around-2022-05-09/
2022-05-09 17:54 | Report Abuse
sifu sslee who had once shaken the management of HRC has now endorsed Hengyuan already...
great news
Posted by Sslee > 5 minutes ago | Report Abuse
Most likely if crack spread can maintain at this level till end of year then many Hengyuan investors can buy a new Tesla or BMW EV car before CNY.
2022-05-09 13:00 | Report Abuse
Thanks guys, lets hope it will eventually break its all time high soon
Lost a lot of money on other stocks, hope to recover it here
Posted by klee > 24 minutes ago | Report Abuse
Probability.You are the best here.Good luck to us.Cheerio.
Posted by subwayzzz > 22 minutes ago | Report Abuse
this one memang need to thank Probability. Great presentation of facts and figures
2022-05-09 11:00 | Report Abuse
Q1 22' you guys need not worry - as it can never be lower than Q4 21' since inventory itself is equal or more than Q4 21
2022-05-09 10:59 | Report Abuse
yes Pang72, frankly i was thinking of topping up today with whatever balance fund in other stocks but they are all bleeding heavily
market cant ignore hengyuan for too long...every day towards Q1 22'results is a ticking time bomb
2022-05-09 10:53 | Report Abuse
Guys, saw 30 USD/brl against Tapis from this beruang posting.
If this is true, Hengyuan can make higher margin than regional refining margin data we have (asean or asia)
https://klse1.i3investor.com/blogs/stockideas/2022-05-08-story-h1622495595-HENGYUAN_PETRONM_a_new_golden_age_of_oil_refiners.jsp
2022-05-09 10:50 | Report Abuse
30 USD/brl against Tapis? Crazy..
2022-05-08 17:09 | Report Abuse
Simple deduction...its either A or B only
A) Worst scenario :
..............
Posted by probability > May 8, 2022 3:43 PM | Report Abuse X
Guys just imagine now Hengyuan is trading at RM 10, even if Q1 results is out with EPS 60 cents (purely from inventory gain - assume nothing much from refining margin from pure bad luck), would the price drop after results?
I really dont think so...it will look forward for Q2 results already
As such i think its good timing to go all in
B) Best scenario :
.................
If they manage to switch to russian crude in Q1 22' itself
Posted by klee > May 8, 2022 4:16 PM | Report Abuse
40 times 35= 1400 usd profit on top of crack spread differential
2022-05-08 16:23 | Report Abuse
recheck the EPS...it shd be way more that
Posted by klee > May 8, 2022 4:21 PM | Report Abuse
If assume crack spread average usd25 for 2022.Hrc net profit may exceed Rm3 per share
2022-05-08 16:18 | Report Abuse
yes, before covid lock down, in 2019 is 41.9 m barrels
Posted by klee > May 8, 2022 4:14 PM | Report Abuse
Probability.Is hrc's processing capacity at 40 mil barrels per yr?
2022-05-08 15:47 | Report Abuse
This is once in a life time opportunity to make a killing...
with sound judgement and real intelligent calculated risk
2022-05-08 15:43 | Report Abuse
Guys just imagine now Hengyuan is trading at RM 10, even if Q1 results is out with EPS 60 cents (purely from inventory gain - assume nothing much from refining margin from pure bad luck), would the price drop after results?
I really dont think so...it will look forward for Q2 results already
As such i think its good timing to go all in
2022-05-08 15:34 | Report Abuse
Hengyuan can go through Shandong Hengyuan China for payments if necessary
2022-05-08 15:34 | Report Abuse
Hengyuan can go through Shandong Hengyuan China for payments if necessary
2022-05-08 15:28 | Report Abuse
SUPERB NEWS! this is truely fantastic for Hengyuan...
They can guzzle all the RUSSIAN CRUDE they want!!
....................
Malaysia does not recognise unilateral sanctions, remains non-aligned to any side
https://www.malaymail.com/news/malaysia/2022/05/08/saifuddin-malaysia-does-not-recognise-unilateral-sanctions-remains-non-alig/2057677
2022-05-08 15:28 | Report Abuse
Indonesia’s Pertamina eyes cheaper Russian oil
https://www.energyvoice.com/oilandgas/asia/399254/indonesias-pertamina-eyes-cheaper-russian-oil/
“Politically, there’s no problem as long as the company we are dealing with was not sanctioned. We have also discussed the payment arrangement, which may go through India,” she told parliament members.
Indonesia holds the G20 presidency this year and has said it will remain neutral amid the Russia-Ukraine conflict, which has sparked the biggest humanitarian and geopolitical crisis in Europe since World War Two. The Indonesian government has raised concerns about the invasion but stopped short of condemning it.
2022-05-08 15:27 | Report Abuse
Indonesia’s Pertamina eyes cheaper Russian oil
https://www.energyvoice.com/oilandgas/asia/399254/indonesias-pertamina-eyes-cheaper-russian-oil/
“Politically, there’s no problem as long as the company we are dealing with was not sanctioned. We have also discussed the payment arrangement, which may go through India,” she told parliament members.
Indonesia holds the G20 presidency this year and has said it will remain neutral amid the Russia-Ukraine conflict, which has sparked the biggest humanitarian and geopolitical crisis in Europe since World War Two. The Indonesian government has raised concerns about the invasion but stopped short of condemning it.
2022-05-08 15:26 | Report Abuse
Indonesia’s Pertamina eyes cheaper Russian oil
https://www.energyvoice.com/oilandgas/asia/399254/indonesias-pertamina-eyes-cheaper-russian-oil/
“Politically, there’s no problem as long as the company we are dealing with was not sanctioned. We have also discussed the payment arrangement, which may go through India,” she told parliament members.
Indonesia holds the G20 presidency this year and has said it will remain neutral amid the Russia-Ukraine conflict, which has sparked the biggest humanitarian and geopolitical crisis in Europe since World War Two. The Indonesian government has raised concerns about the invasion but stopped short of condemning it.
2022-05-08 15:21 | Report Abuse
SUPERB NEWS! this is truely fantastic for Hengyuan...
They can guzzle all the RUSSIAN CRUDE they want!!
....................
Malaysia does not recognise unilateral sanctions, remains non-aligned to any side
https://www.malaymail.com/news/malaysia/2022/05/08/saifuddin-malaysia-does-not-recognise-unilateral-sanctions-remains-non-alig/2057677
2022-05-08 15:19 | Report Abuse
SUPERB NEWS! this is truely fantastic for Hengyuan...
They can guzzle all the RUSSIAN CRUDE they want!!
....................
Malaysia does not recognise unilateral sanctions, remains non-aligned to any side
https://www.malaymail.com/news/malaysia/2022/05/08/saifuddin-malaysia-does-not-recognise-unilateral-sanctions-remains-non-alig/2057677
2022-05-08 12:38 | Report Abuse
any country keep threatening wanting to use nuclear weapon, NATO will slowly choke them till they weaken
2022-05-08 12:29 | Report Abuse
that is my logic too...until people like Putin is exterminated from Russia, Europe & US will never buy their oil
Posted by cactus81 > May 8, 2022 12:26 PM | Report Abuse
Question now is how soon the sanction can be lifted. Even war ended doesn't mean the aanction will be lifted immediately. In addition, there are not many new investments into refinery due to ESG issues. All these are positive for HY.
2022-05-08 12:25 | Report Abuse
once bitten, twice shy phenomenon...but time is in our side
Posted by valueguru > May 8, 2022 12:14 PM | Report Abuse
@probability you brought up a good point. I remember some people used this to extrapolate into many quarters of high profit but it was really just a temporary event. Many people were caught when the price fell. This time round it's structural but yet people see it as temporary!
2022-05-08 12:23 | Report Abuse
valueguru point is valid, for structural change in margin to 10 USD/brl average you do not need the war to sustain
Posted by klee > May 8, 2022 12:18 PM | Report Abuse
If war last forever then it will be structural in nature.Else it cannot be.
2022-05-08 11:46 | Report Abuse
Just for everyone info the average gross refining margin Hengyuan captured during Hurricane Harvey in 2017 - Q3 2017 (peak EPS exceeding RM 1), was only 10 USD/brl
this is because the spike in margin due to Hurricane Harvey was a temporarily blip in the qtr (less than a month)
2022-05-08 11:37 | Report Abuse
yup, totally agree and aware
Posted by valueguru > May 8, 2022 11:35 AM | Report Abuse
@probability, I track years of daily crack spread data from reuters (minus weekends and holidays). What I observe is Jan and Feb have been higher than past few years average (most likely due to lifting of pandemic restrictions). The real spike started in March due to the war. In the article I just posted, it mentioned that analysts forecast of average GRM USD12 for this year but this was before the war. Though GRM plays a big role for refiners, another area is how they run their operations (hedging, cost management, maintenance etc). For HYR, I believe their main weakness is hedging (and hopefully I'm wrong here!!!). This time round because the GRM has risen so high, I hope this will negate any hedging loss, if not increase the gain!
2022-05-08 11:22 | Report Abuse
many investors have phobia of hengyuan due to 2017 experience like sslee etc...they hate the stock thinking management lied to them...
the truth is its the Hurricane'fault... as fast as it came...it left
the price from RM 17 immediately came down as the refineries were back in production after halting temporarily for the Hurricane in US
Now, can anyone immediately help to tap the 3rd largest refiner in the world - russia to Europe?
Another Important fact to remember is that the crack spread shot up higher than the 2017 Hurricane Harvey level even before the war started simply due shortage of refinery (ESG issues as valueguru highlighted) and demand was picking up after covid
Bloody 2 years no additional refining capacity were made but existing ones ceased production
2022-05-08 11:11 | Report Abuse
agree pang72, no matter what the Q1 results, Hengyuan share price will be forward looking for Q2 and ahead..
2022-05-08 11:08 | Report Abuse
Remember i was saying margin is shocking it its unfolding earlier..it will come in news... i was aware that it shot to 28 USD/brl last week itself
The Feb & March refining margin spike is contributed by Diesel & other refined products
2022-05-08 11:06 | Report Abuse
@valuegure, I have data for Feb & March - it shot up significantly
Posted by valueguru > May 8, 2022 11:04 AM | Report Abuse
As mentioned in my post, I don't expect much impact on March quarter result (I might be wrong) but rather the June quarter will be interesting.
2022-05-08 11:03 | Report Abuse
USD 26/brl....LOL!
i really hope readers can do the simple maths
2022-05-08 10:23 | Report Abuse
i see at least 2 million barrels additional sold in Q1 22'vs Q4 21'
leave readers to do the maths on implication on bottom line
Posted by pang72 > May 8, 2022 10:13 AM | Report Abuse
https://www.theedgemarkets.com/article/some-petrol-stations-run-out-su...
FIRST TIME HAPPENS OIL SHORTAGE IN MSI
2022-05-08 08:22 | Report Abuse
Shandong-based independent refinery buying Russian crude discounted $35 per barrel against Brent crude
MAY 4 2022
https://www.ft.com/content/4f277a24-d681-421a-9c94-29d6fd448b20
China’s independent refiners have been discreetly buying Russian oil at steep discounts as western countries suspend their own purchases and explore potential embargoes because of the war in Ukraine.
An official at a Shandong-based independent refinery said it had not publicly reported deals with Russian oil suppliers since the Ukraine war started in order to avoid attracting scrutiny and being hit by US sanctions.
The official added that the refinery had taken over some of the purchase quota for Russian crude from state-owned commodity trading firms, which are seen to represent Beijing and have mostly declined to sign new supply contracts.
Many western companies are self-sanctioning or struggling to secure the insurance, shipping or financing needed to buy Russia’s commodity exports, raising expectations that energy-hungry China will step in and buy the unsold barrels.
The purchases from China’s independent refineries reveal how some importers are bypassing traditional routes to access cheap Russian oil, helping Beijing maintain a low profile as the west barrages Moscow with sanctions.
Brian Gallagher, head of investor relations at Belgian tanker group Euronav, said the consolidation of Russia oil on to larger ships for transport to Asia was “unusual”. But with Urals discounted $35 per barrel against Brent crude, he added that Chinese refineries were motivated to buy.
............
Shandong Hengyuan Petrochemical Company Limited (SHPC) is a state-owned enterprise based in Linyi County, Shandong Province, China.
http://hrc.com.my/shandong-hengyuan-petrochemical.html
...............
22 Dec 2021 - COSA agreement between HRC & Shell to buy their Brent crude is over
2022-05-08 08:22 | Report Abuse
Shandong-based independent refinery buying Russian crude discounted $35 per barrel against Brent crude
MAY 4 2022
https://www.ft.com/content/4f277a24-d681-421a-9c94-29d6fd448b20
China’s independent refiners have been discreetly buying Russian oil at steep discounts as western countries suspend their own purchases and explore potential embargoes because of the war in Ukraine.
An official at a Shandong-based independent refinery said it had not publicly reported deals with Russian oil suppliers since the Ukraine war started in order to avoid attracting scrutiny and being hit by US sanctions.
The official added that the refinery had taken over some of the purchase quota for Russian crude from state-owned commodity trading firms, which are seen to represent Beijing and have mostly declined to sign new supply contracts.
Many western companies are self-sanctioning or struggling to secure the insurance, shipping or financing needed to buy Russia’s commodity exports, raising expectations that energy-hungry China will step in and buy the unsold barrels.
The purchases from China’s independent refineries reveal how some importers are bypassing traditional routes to access cheap Russian oil, helping Beijing maintain a low profile as the west barrages Moscow with sanctions.
Brian Gallagher, head of investor relations at Belgian tanker group Euronav, said the consolidation of Russia oil on to larger ships for transport to Asia was “unusual”. But with Urals discounted $35 per barrel against Brent crude, he added that Chinese refineries were motivated to buy.
............
Shandong Hengyuan Petrochemical Company Limited (SHPC) is a state-owned enterprise based in Linyi County, Shandong Province, China.
http://hrc.com.my/shandong-hengyuan-petrochemical.html
...............
22 Dec 2021 - COSA agreement between HRC & Shell to buy their Brent crude is over
2022-05-07 23:14 | Report Abuse
Shandong-based independent refinery buying Russian crude discounted $35 per barrel against Brent crude
MAY 4 2022
https://www.ft.com/content/4f277a24-d681-421a-9c94-29d6fd448b20
China’s independent refiners have been discreetly buying Russian oil at steep discounts as western countries suspend their own purchases and explore potential embargoes because of the war in Ukraine.
An official at a Shandong-based independent refinery said it had not publicly reported deals with Russian oil suppliers since the Ukraine war started in order to avoid attracting scrutiny and being hit by US sanctions.
The official added that the refinery had taken over some of the purchase quota for Russian crude from state-owned commodity trading firms, which are seen to represent Beijing and have mostly declined to sign new supply contracts.
Many western companies are self-sanctioning or struggling to secure the insurance, shipping or financing needed to buy Russia’s commodity exports, raising expectations that energy-hungry China will step in and buy the unsold barrels.
The purchases from China’s independent refineries reveal how some importers are bypassing traditional routes to access cheap Russian oil, helping Beijing maintain a low profile as the west barrages Moscow with sanctions.
Brian Gallagher, head of investor relations at Belgian tanker group Euronav, said the consolidation of Russia oil on to larger ships for transport to Asia was “unusual”. But with Urals discounted $35 per barrel against Brent crude, he added that Chinese refineries were motivated to buy.
............
Shandong Hengyuan Petrochemical Company Limited (SHPC) is a state-owned enterprise based in Linyi County, Shandong Province, China.
http://hrc.com.my/shandong-hengyuan-petrochemical.html
Stock: [HENGYUAN]: HENGYUAN REFINING COMPANY BERHAD
2022-05-13 14:28 | Report Abuse
One thing we can be certain is at least 16% of its feed for Q1 22'would have been Russian oil at that by Feb 22'differential between Ural & Brent had averaged USD 5/brl and by March it averaged USD 30/brl.
Savings:
.......
(1) Feb 22'
3.3 m barrel per month x $5/brl x 16%:
MYR 11 m
(2) Mar 22'
3.3 m barrel per month x $ 30/brl x 16%:
MYR 67 m
Total = MYR 78 m