We deem the results to be within our expectations (57%) but above consensus (61%) as we believe 3Q22 might post weaker earnings performance as Armada Kraken is slated for maintenance in Sep 2022.

Remark: Armanda major earning driver, Kraken, will on maintenance in Sept, will affect revenue income for Q3

sold off all armanda at 42.5sen, locked all profit, offset slightly on today intraday transaction cost loss

Top up all margin line capital to armanda at 42.5sen

Great news for armanda

Opt to take all handsome profit today to avoid getting trap later if crack spread continue tumbling

hng33

Beware of current refinary crack spread, all 3 refine product are on downtrend.

https://www.tradingview.com/symbols/NYMEX-D1N1!/

https://www.tradingview.com/symbols/NYMEX-GOC1!/

https://www.tradingview.com/symbols/NYMEX-ASD2!/

Remark: Opt to take all handsome profit today to avoid getting trap later if crack spread continue tumbling

Beware of current refinary crack spread, all 3 refine product are on downtrend.

https://www.tradingview.com/symbols/NYMEX-D1N1!/

https://www.tradingview.com/symbols/NYMEX-GOC1!/

https://www.tradingview.com/symbols/NYMEX-ASD2!/

bought Dayang at 1.21

sold all PetronM at 4.91-4.95, locked all handsome profit

sold all hengyuan at 4.94-4.96, locked all handsome profit

TA bullish

:D)

:D)

:D)

Pure refiner, Valero Q3 EPS USD 7.14, share price USD 126.8

Pure refiner, Hengyuan Q3 EPS Est. RM 2.0, share price RM 4.18 !?

Accumulation completed today with fullly invested capital + all margin line.

Top 3 holding are 1. Hengyuan, 2. Bumi Armanda, 3. PetronM

Use margin line, added all to hengyuan at 4.13-4.15

TA bullish now

With absent of RM 80m one of impairement loss incur in previous Q2, the next upcoming Q3 should deliver additional 1sen on top of Q2 EPS. In additional, USD profit is strengthen further by another 5% in Q3 if compared to Q2. Therefore, next Q3 should deliever up to EPS = 4.5sen

Technically, Armanda share price is about turning UP point, reversal chart is expected next

To know better PetronM business, refer to latest PetronM management comment on Q&A in latest annual meeting

https://www.petron.com.my/wp-content/uploads/2022/07/63rd-AGM-Summary-of-Proceedings-and-Appendix-A-Questions-from-Shareholders_2022.pdf

As PetronM refine 20% oil into gasoline, it need to import from its holding company Petron corp in philippines. Therefore, PetronM manage to minimize loss making gasoline
https://www.tradingview.com/symbols/NYMEX-D1N1!/

On the other hand, PetronM maximum handsome profit through refine majority 60% oil into diesel and jet fuel, which profit margin ow at elevated high level
Diesel
https://www.tradingview.com/symbols/NYMEX-GOC1!/
jet fuel
https://www.tradingview.com/symbols/NYMEX-ASD2!/

PetronM refine component product are majority produce diesel and jet fuel, both combined form 60% refine product.

Currently, these 2 refine product command historical highest crack spread range, allow PetronM to realize highest profit margin.

PetronM only product 20% gasoline which is now at loss making margin.

The balance refine product is LPG, at elevated profitable margin

Historical, petronM payout at least 20% net profit as dividend.

Based on 1H and expected 2H EPS, PetronM upcoming dividend could worth at least 48sen, >10% yield

Allocate balance fund to add all armanda at 38sen

sold all affin at 2.25

https://www.qcintel.com/article/euro-oil-products-diesel-cracks-at-fresh-highs-as-strikes-continue-9145.html

https://www.qcintel.com/article/euro-oil-products-diesel-cracks-at-fresh-highs-as-strikes-continue-9145.html

https://www.tradingview.com/news/reuters.com,2022:newsml_L4N31J0T1:0-gasoil-margins-up-further-on-steady-oil-europe-support/

https://www.tradingview.com/news/reuters.com,2022:newsml_L4N31J0T1:0-gasoil-margins-up-further-on-steady-oil-europe-support/

ARMADA steady profit from FSOP is USD denominated, strengthen USD translate to higher RM profit

Built up position few weeks beforehand and at current low depress price to enjoy higher margin of safety.

Built up position few weeks beforehand and at current low depress price to enjoy higher margin of safety.

The earlier limit up ahead of previous Q2 may no repeated in upcoming Q3 result. But, share should still able react positively if Q3 EPS can manage deliver around RM 2 and writeback some earlier hedging loss.

Now is right timing to built up position ahead of Q3 result next month. Although hengyuan expect to deliver lower Q3 earning if compared to Q2, but coming Q3 result EPS still is expect to RM 2 due to sustain elevated crack spread for diessel and jet juel.

Current depress level offer limited downside risk, should gradually on recoveery path ahead of coming Q3 result

bought back hengyuan at 4.16-4.17

bought back PetronM at 4.48-4.50

sold hiaptek at 23sen, locked profit first

Now, only need to wait for next month Q result, expect to deliver EPS = 4.2- 4.5sen

Holding most armanda in portfolio, at cost 38sen.

Added more to armanda, all at 38sen

Current crack spread
1. Gasoline, incur loss making
2. Dissel, continue making good profit
3. Jet fuel, continue making good profit

Remark: the nett impact on EPS is upcoming Q3 is lower than Q2

Hedging position
1. Gasoline, revert to profit making due to slump in gasoline crack spread
2. Dissel, continue loss making due to continue elevated crack
3. Jet fuel, continue loss making due to continue elevated crack.

Remark: the nett impact on comprehensive income is pare down quarterly hedging loss.

Continue strength in USD is added profit to armanda as all its long term rental fees in FSOP is USD denominated.

Armada always response positively on its Q result due to increasing profit and trim debt continuing. Just wait for coming Q next month

Current crack spread
1. Gasoline, incur loss making
2. Dissel, continue making good profit
3. Jet fuel, continue making good profit

Hedging position
1. Gasoline, revert to profit making due to slump in gasoline crack spread
2. Dissel, continue loss making due to continue elevated crack
3. Jet fuel, continue loss making due to continue elevated crack

bought back armanda at 38sen

sold back RHB at 5.72-5.73

sold back HLC at 6.32-6.34

At 21sen, and dividend yield 4.8%, downside risk is extreme minimum

MRT3 + RTS + Penang LRT/tunnel need a lot of local steel.

Associate, eastern steel is highly profitable, earning tax free profit, export mainly to China which is now in the middle pump prime to stimulus massive infrastructure growth