warren buffet fund sapu petronm looks like after Chevron

yes Pang72..

petron i am not expecting much on Q1 as their actual refining capacity is too small and product mainly gasoline have not benefitted unlike diesel (crack spread shot up in Q1 itself) which hengyuan produce significantly..

just want to reduce expectation here - of course if EPS turns out very good the better for all

Posted by pang72 > May 20, 2022 10:05 AM | Report Abuse

...... Every number every news are pointing to record price..
Hopefully petron QR out today so we can digest the earning this weekend..

a 580k bpd refinery shutting down at this time is unimaginable...

OMG..

The fire and the possible shutdown of a large refinery come at a time when global refining margins are sky-high amid insufficient refinery capacity worldwide.

Refinery capacity globally is now lower than before the pandemic after some refineries closed permanently after COVID crippled fuel demand in early 2020.

Firefighters received a report of an explosion at the refinery in the Onsan Industrial Complex in Ulsan owned by S-Oil shortly before 9 p.m. local time on Thursday. The explosion took place during the processing of crude oil into petroleum, Yonhap quoted authorities as saying.

The Onsan refinery has three crude distillation units with a combined capacity of 580,000 barrels per day (bpd), according to Argus, which reports that market participants say a full shutdown of the refinery is likely.

@cactus, looks like crack spread will shoot even higher with that event, RM3 is secured for Q2

people are missing such precious opportunity...stock price is grossly undervalued

a lot of investors are confused on its hedging effects

when you hedge, you had already secure the margin during the time of hedging

the hedging loss or gain is merely the accounting of 'lost opportunity' if you had not hedged earlier when maturity of the contract takes place - this does not affect the already hedged margin

the hedged margin is always secured

@searchingmoney, i had hunch this was happening..

that means summer there will further boost demand for gasoline from here

i am estimating it would take half a decade for the margin to drop to $13/brl from current value above $20/brl

to add new refining capacity takes ages

Posted by TakeProfits > May 18, 2022 11:24 PM | Report Abuse

Hi probability...you mean Hengyuan won't ever reach mr23. Please enlighten me and all of us. Thank you very much !

market is still in denial mode, it wants to treat this refinery margin rise phenomenon like gloves

it has not figured out that the required margin for Hengyuan to hit RM 24 at PE 5 is only $ 13/brl
it can wait half a decade for the margin to reach that level..
the more you ponder deep on what is actually happening globally the increasingly evident the above would become

even Putin died, EU is not gonna tap into Russian oil & its refined products for the next few years till Russian economy collapse

FYI, the Hurricane season in U.S begins June and runs through November.

https://www.nbcnews.com/business/consumer/why-gas-prices-high-when-will-back-down-rcna28314

JP Morgan forecasts “higher for longer” refining margins
May 17, 2022
https://currencytrader.review/jp-morgan-forecasts-higher-for-longer-refining-margins/

after results may be HLIB will come with TP

scenario 3, should be hedging gain

hedging is only done when margin is thin, Q2 onwards you can be certain they wont hedge

quite a strong statement from HLIB:

“Our findings have led us to believe that the surge in refining product margins is a lingering problem arising from structural issues: surge in demand post-pandemic, supply shortage due to years of underinvestment and ESG-related pressures, and sanctions on Russian oil — all of which would not be able to be addressed in the immediate term,” it said."

well said..totally agree

MAY 15 2022

Read more at: https://www.deccanherald.com/opinion/how-russian-is-it-a-very-crude-question-1109435.html

While Europe may stop buying Russian crude, it’s unlikely to be able to avoid diesel fuel made from that crude. The direct diesel trade between Russia and European countries may halt, but products made from Russian crude in overseas refineries will still arrive at European ports. Russian crude processed in overseas refineries ceases to be Russian. Diesel produced at, say, an Indian refinery is Indian diesel, no matter whether the crude came from Saudi Arabia, Russia, or anywhere else. Products are made to tight specifications required in consuming countries and there is no mechanism to determine where the crude they were produced from originated.

Post removed.Why?

Updated with 3 more Russian vessels. April itself 4 vessels now!

https://klse1.i3investor.com/blogs/2017/2022-05-15-story-h1623242016-Twitter_tracker_shows_Russian_Urals_crude_coming_to_Malaysia.jsp

Since Urals dipped, they have actively increase the intake beginning April. At least 4 vessel per month now

updated with more vessel

https://klse1.i3investor.com/blogs/2017/2022-05-15-story-h1623242016-Twitter_tracker_shows_Russian_Urals_crude_coming_to_Malaysia.jsp

If every month 1 - 2 vessel, thats already huge savings...

Some news in Mar 22'- to show significance of Russian crude

https://english.alarabiya.net/business/energy/2022/05/11/Hungary-says-its-backing-of-EU-s-Russia-oil-ban-hinges-on-millions-of-dollars

MOL’s refining margins have been boosted by its cheap Russian oil intake and also a jump in its diesel and gasoline crack spreads.

According to MOL’s data, its refinery margin rose to $33.7 per barrel in March from $3.4 in February.

Difference between Urals and and Brent oil price from December 31, 2021 to May 5, 2022

https://www.statista.com/statistics/1298092/urals-brent-price-difference-daily/

Thu, Apr 28, 2022

Russian oil – oil tanker data revelation

https://www.express.co.uk/news/world/1602687/south-korea-news-russian-oil-tanker-data-ukraine-war-spt

Fifty-two were going to China, 28 to South Korea, 25 to India, nine to Japan and one to Malaysia


How many barrels can load in VLCC?

https://www.mol-service.com/blog/how-large-is-the-very-large-crude-carrier

Then, how much crude oil can load in VLCC, the Very Large Crude Carrier?
The size of cargo tanks varies from ship to ship, but many of the recently built VLCCs are designed to load about 2 million barrels of crude oil.

.....

Hengyuan processing capacity per Quarter is 10 million barrels, at 16% Russian Crude, it needs about 1.6 million barrels

https://twitter.com/RUTankerTracker

Need to scroll down to the particular date i mentioned in the posting to check & verify yourself

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

REPOSTING IMPORTANT INFORMATION JUST DISCOVERED.


Posted by probability > May 14, 2022 11:20 AM | Report Abuse X

Difference between Urals and and Brent oil price from December 31, 2021 to May 5, 2022

https://www.statista.com/statistics/1298092/urals-brent-price-difference-daily/


Thu, Apr 28, 2022

Russian oil – oil tanker data revelation

https://www.express.co.uk/news/world/1602687/south-korea-news-russian-oil-tanker-data-ukraine-war-spt

Fifty-two were going to China, 28 to South Korea, 25 to India, nine to Japan and one to Malaysia


How many barrels can load in VLCC?

https://www.mol-service.com/blog/how-large-is-the-very-large-crude-carrier

Then, how much crude oil can load in VLCC, the Very Large Crude Carrier?
The size of cargo tanks varies from ship to ship, but many of the recently built VLCCs are designed to load about 2 million barrels of crude oil.

.....

Hengyuan processing capacity per Quarter is 10 million barrels, at 16% Russian Crude, it needs about 1.6 million barrels

the above will have profound implication to Hengyuan's earnings, if only they manage to continue sourcing russian crude after the war..

i see its not that difficult considering its just a continuation of what they had already been doing in 2021

sorry, wrong calculation on russian oil savings above, the savings calculated was per month, for a quarter you need to multiply above savings by 3

Difference between Urals and and Brent oil price from December 31, 2021 to May 5, 2022

https://www.statista.com/statistics/1298092/urals-brent-price-difference-daily/

havent bring russian oil into the equation yet

just 16% of russian feed (as per annual report) at 30 USD/brl discount against brent

will be saving HRC 67m or net additional PAT of MYR 52m per qtr. That itself is like additional 17.4 cents pert qtr or 69 per annum, PE5 already RM 3.50

forget about all this refining margin rise, HRC share price rise havent even justify Russian crude oil savings which they had already been consuming....

who knows may be they can raise it more to 50% of their feed

It should gap up above RM7.33..with this kinda crack, if market really realize it should rise more than RM 1 the first trading day

the rise in crack spread we are seeing daily itself - used to be the average net refining margin per barrel in a year

Just 1 USD/brl refining margin translates to EPS of 11.5 per qtr. Thats 46 cents per annum. At PE 10 already RM 4.60

HRC price only rose from RM 5 to RM 7 now, merely RM 2 while crack spread rose from 15 to 29 now (about 14 USD/brl)...


again,

we only need $ 13/brl margin near term for TP RM 24 with PE 5 or $ 11/brl super long term margin with TP RM 40 at PE 10


Posted by pang72 > May 14, 2022 10:08 AM | Report Abuse

RECORD DAY FOR CRACK..
HRC WILL OVER 7.33 NEXT WEEK LIAO

6 months payback period, any regional refiners (asean) will be willing to take over just to satisfy local demand..

Even our old friend SHELL retail in Malaysia will be willing to buy back the refinery at triple the market cap now..easily

These western companies (shell) better give up their ESG stand.


Posted by probability > May 13, 2022 8:49 PM | Report Abuse X

US refiners will take over HRC company lor...LOL! HRC limit up lor...

No matter what Saudi Arabia do to increase oil output...they can only make crude oil price come down, but refining margin will keep going higher......
people will be desperately buying as long as there are refiners willing to sell their refined products.....crude oil not refined is useless

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

yup, govn is getting money from Petronas thats minting money anyway

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..

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.

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...

yup, peace guys... thanks klee

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)..

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

gd morning pang72, lets hope market wake up again on hengyuan today

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

Post removed.Why?

"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

"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

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/

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/

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.