First quarter is usually the worst quarter based on historical performance.

Considering strengthening of ringgit against usd in quarter 1 it is not unusual that results in lower qoq profit. However revenue qoq grew by 28% which is significant.

Can add on weakness.

I think he meant the earnings per share for Petronm. Which ranges between 30-40 sen per quarter. It may not be as good as the last time so probably projection of about 30 sen.

Based on the Philippines petron quarterly results, Petronm improved in sales volume by 14% industrial and 3% retail in Malaysia. But there may be margin compression due to increase in oil price. We will see...

Pls look beyond the results. Q2 large gains are due to one off gain for mandatory disposal to MRT Corp. if u look based on qoq results improved alot

Public is usually very stingy at valuation of stocks. For it to promote a buy with TP 14.46 consider very good le...meaning the actual traded price should be much higher

Revenue by Geographical Segment based on Petron Corp Quarter 3 Report

International includes China,
Vietnam, Taiwan, Cambodia, Malaysia, Thailand, Indonesia, South Korea and Singapore.

Q1 2017
PH = 67308 Mil PHP
International = 39104 Mil PHP

Q2 2017
PH = 51093 Mil PHP (shutdown plant 35 days)
International = 49453 Mil PHP

Q3 2017
PH = 59756 Mil PHP (shutdown plant 18 days)
International = 46791 Mil PHP

Indication points toward a better than expected revenue internationally, which includes Malaysia.

The missing link is the contribution of revenue by other Asian countries such as South Korea.

If the missing link can be identified, the revenue of Malaysia operations can be identified. Thoughts?

http://www.theedgemarkets.com/article/spotlight-web-ownerships-antidumping-probe

This news is related to Prestar. Hmm, thoughts on this?

http://www.thestar.com.my/business/business-news/2017/10/13/press-metal-plans-to-issue-up-to-rm1pt7bil-notes/

Think the crack spread drop as the spread is the difference in price between the final product and the crude. As we know crude appreciated over the previous quarter. Therefore current quarter the reference crude price reflected is higher. Hence crack spread drop. But all of this is dependent on the reference price only.

http://www.cmegroup.com/apps/cmegroup/widgets/productLibs/esignal-charts.html?code=D1N&title=SEP_2017_Singapore_Mogas_92_Unleaded_%28Platts%29_Brent_Crack_Spread_&type=p&venue=0&monthYear=U7&year=2017&exchangeCode=XNYM&chartMode=dynamic

Crack spread falls to 16.4. Let's hope it sustains 15 in the near future.

http://www.cmegroup.com/apps/cmegroup/widgets/productLibs/esignal-charts.html?code=D1N&title=SEP_2017_Singapore_Mogas_92_Unleaded_%28Platts%29_Brent_Crack_Spread_&type=p&venue=0&monthYear=U7&year=2017&exchangeCode=XNYM&chartMode=dynamic

Kindly verify on this info dear sifus.

Posted by stockraider > Sep 1, 2017 07:51 PM | Report Abuse
WOW...CRACK SPREAD USD 17 PER BARREL SO HIGH MEH ??

I dunno..

Waiting for experts to verify haha

Is this the correct page for crack spread?

Currently at 17 USD already...

http://www.cmegroup.com/apps/cmegroup/widgets/productLibs/esignal-charts.html?code=D1N&title=SEP_2017_Singapore_Mogas_92_Unleaded_%28Platts%29_Brent_Crack_Spread_&type=p&venue=0&monthYear=U7&year=2017&exchangeCode=XNYM&chartMode=dynamic

Thanks for sharing David, as always.

Highly educational.

Logically looking at it, Q2 may not be as good as Q1 if stock losses or margins are slightly compressed. However, the Q3 will definitely make a strong comeback if current crack margin persists.

ASB selling could be due to no dividend provided by HYC thus far. Thus, it's a means of locking in gains and paying dividends to their shareholders.

EPF buys and sells all the time too. ASB is just doing the same. Remains to be seen if they are disposing the full 10%...

Any drop in this counter is temporary and is a good opportunity to top up.

They have been consistently earning more every Quarter. Just look at their past results for more information.

They also own ~50% of guardrail market in Malaysia. ECRL is coming and they are currently bidding for this too to my knowledge.

Disposal of Vietnam plant will provide additional cash to reduce debt. If its reported in the next QR, current price is still cheap.

http://www.thestar.com.my/business/business-news/2017/08/21/petronas-dagangans-profit-boosted-by-higher-selling-prices/

The main domestic arm of Petroliam Nasional Bhd said this stemmed from an increase in average selling prices by 28% following the increase in Mean of Platts, offset by 5% lower sales volume.

So, if average selling price increase, Petronm huat together?

25.5 eps (q1 2017) vs 24.8 eps (q2 2017). Marginal change. Means petron and hy can sustain q2 too hopefully.

Petdag results out. Maybe can use as reference.

http://www.thestar.com.my/business/business-news/2017/08/17/fire-breaks-out-at-major-petrochina-refinery-in-dalian/

http://www.thestar.com.my/business/business-news/2017/08/17/fire-breaks-out-at-major-petrochina-refinery-in-dalian/

Will this affect the crack spread further?

Good share. Thanks tonynet

Can someone estimate the possible earnings from the tax?

Amount of Tax
Q1 2017 (MYR + PH) = 792 mil PHP = 66.6 mil RM
Q2 2017 (MYR + PH) = 992 mil PHP = 83.4 mil RM
Q1 2017 (PHP) = 26.659 mil RM
Q1 2017 (MYR) = 39.941 mil RM
Q2 2017 (PHP) = ?? mil RM
Q2 2017 (MYR) = ?? mil RM

Thank you for sharing David.

I checked on the term loan. It seems you are right. I shall remove that from the other blog post.

Thank you for sharing. This is a balanced view. The numbers seem to check out. Perhaps David or Probability may share their views on this.

Thank you David for your calculations. My estimate wasn't accurate previously as I did not account for the retail sector..shall refer to your calculations and tune for future reference.

Dear Raider,

Thank you for your comments. I did include another line for stock loss in Q2 2017 to account for ~3 USD drop in price and based on 18-days inventory. Is this not the impairment loss due to inventory?

Dear Khye Lock Tneoh,

I did not include forex appreciation due to difficulty estimating gains from forex. I will have a look and see if I can update to include later.

The calculation by sales volume serve as a conservative estimate only.

Feel free to comment. Do let me know if the assumptions are unreasonable so I can try and calculate again.

Estimate via Sales Volume
Q1 2017 (Malaysia) 8,300,000 bbl
Q1 2017 (Overall) 26,200,000 bbl
Q2 2017 (est. Malaysia) 8,458,397 bbl (ratio accordingly)
Q2 2017 (Overall) 26,700,000 bbl
================================================================
Q1 Results
Est. Crack spread Q1 2017 5.01 USD/bbl
1 USD to MYR 4.4
Gross Estimated profit Q1 2017 182965200 MYR
Operating Expenses etc 74428200 MYR
Net Profit Q1 2017 108537000 MYR
Basics EPS (sen) 40.20

Est. Q2 Results
Est. Crack spread Q2 2017 5.26 USD/bbl (assuming 5% improve)
1 USD to MYR 4.30
Gross Estimated Profit Q2 191330208 MYR
Operating Expenses 74428200 MYR (assume same)
Estimated Stock Loss 21822664 MYR (18-days inventory)
Net Profit Q2 2017 95079344 MYR
Basic EPS (sen) 35.21

Alex if u observed the eps of q3 2016 is -ve around -30 cents. If q3 2017 can be better than q12017 I am optimistic that they can achieve higher than 250 eps for 2017. Whether they can achieve 300 eps depends on the q4 results.

That is true but forex gains are difficult to gauge and it's best to be conservative in estimating profit growth.

That way investors don't get spooked when results are announced such in the case for LCtitan.

Disclaimer: I own hengyuan shares too.

Based on the rosy pictures being painted here, I would like to provide a balanced view on Hengyuan.

Investors please be reminded that there will be stock loss of equivalent to ~40 million and payment of Term Loan I (equivalent to 44 million) in Q2 2017.

As such, assuming everything else remains the same as previous quarter, expected EPS will be around 55 - 65, lower than Q1 2017.

Looking forward to Q3, if the crack spread maintains, the results going forward will be good (perhaps even better than Q1 2017).

Based on the rosy pictures being painted here, I would like to provide a balanced view on Hengyuan.

Investors please be reminded that there will be stock loss of equivalent to ~40 million and payment of Term Loan I (equivalent to 44 million) in Q2 2017.

As such, assuming everything else remains the same as previous quarter, expected EPS will be around 55 - 65, lower than Q1 2017.

Looking forward to Q3, if the crack spread maintains, the results going forward will be good (perhaps even better than Q1 2017).

Thanks KClow and Patrick for the clarification.

Another question, as the conversion price has been fixed to 10.99, does it matter when the ICULs is subscribed?

Since the time period of ICULs is 3 years, will there be any significant change between if a person subscribed today versus say 2 years down the road? Trying to wrap my head around this as this concept is new to me.

So, after the ICULS is subscribed, will the share price be adjusted downwards or will it remain at current share price?

Just use google translate...

First article excerpt:

Petron Malaysia (PETRONM, 3042, Main Board Industrial Products Unit) believes that the company's "money plan" will be even more overwhelming after the local refinery expansion program is completed, Kuala Lumpur said.

Peterson, president of Petron Corp., the parent company of Petron, a Malaysian parent company, said in an interview with Bloomberg that the profitability of Malaysian companies would continue after the plant repair and plant brand remodeling.

"In the future, we think the performance of the Malaysian subsidiary will be better."

Petron Malaysia recorded its first quarter results in May, recording a net profit of RM155 million in the quarter ended March, up 554 percent from 16.6 million ringgit last year.

Net profit soaring can be attributed to the expansion, as well as operational efficiency.

Jacquard, who is also chairman of Petron Malaysia, also revealed that Malaysia is now completing the refinery upgrade program in order to reach the Euro-5 soaring, followed by the higher Euro-6 standard.

Petron Corp., the largest oil producer in the Philippines, bought the oil and gas downstream business assets to Exxon Mobil International for RM610 million in 2011 -

So far this year soared 86%

Petron Corp. is part of San Miguel, one of the largest companies in the Philippines, with a wide range of businesses, including energy and infrastructure.

So far this year, Petron Malaysia's stock has surged 86%, one of the top 100 listed companies in Malaysia. But the same period, listed in the Philippines, the parent company Petron Corp., the stock was poor performance, down 3.6%.

Tsai pointed out that in the third quarter of this year, Petron Corp.'s operating profit would be between 2 billion and 2.5 billion pesos per month (169 million to RM212 million), which means that the company will begin to reverse its weaknesses.

Petron Malaysia closed at MYR7.88, up 16 cents, or 2.07%, trading at 1,530,700 shares.

Interesting, spinoff of Tashin steel. Wonder how will the new shares be priced and how much Prestar will trade afterwards. Anyways, currently at proposal stage.

Not yet. It has 150mil short term debt, but this has to do with inventories and common for steel companies.

Its long term debts are around 10 million, however disposal of Vietnam factory will service that debt.

Probably will only have short term debt left in 1-2 quarters.

According to the news, naphta is currently trading at 60.50 USD per tonne. $15 dollar discount to Japan is $45.50 USD.

This translates to approx. EPS of 3 cents. Hopefully more to come.

http://www.brecorder.com/2017/06/22/355824/asia-naphthagasoline-gasoline-gains-stock-draws-in-asia-us/

- Separately, Malaysia-based Hengyuan sealed its first deal to sell up to 48,000 tonnes of light naphtha to an oil major after acquiring a stake in Shell Refining Company.

- The fuel, most likely to be used as a gasoline blendstock, was sold at a discount of about $15 a tonne to Japan quotes on a FOB basis.

http://www.nasdaq.com/article/mercuria-petrochina-selling-fuel-oil-stored-offshore-singapore-malaysia-20170616-00189

Interesting news on demand for fuel oil.

That guy has been disposing since awhile back.

http://m.economictimes.com/industry/indl-goods/svs/steel/steel-sector-is-ripe-for-re-rating-says-clsa/articleshow/59050206.cms

Re rating of steel sector may come soon.

http://www.hellenicshippingnews.com/asia-fuel-oil-cracks-jump-to-2-12-year-high-as-inventories-dive/

http://www.hellenicshippingnews.com/u-s-refiners-process-record-volume-of-crude-as-demand-climbs-kemp/

Price adjusted down by 2 cents for div payout date later.

Suregain I think u misunderstood probability. Check his posting history for further understanding.

Let's put things in perspective.

1st Q2016 EPS = 31.5 cent

Fuel price has doubled since then (2016 -> 2017), so assume 1st Q2017 = 31.5/2 = 15.75 cent.

USD price increased from 4.2 to 4.5 during 1Q2017 = 15.75 x 4.2/4.5 = 14.7 cent.

Based on preliminary results shared previously, total number of passengers improved y-o-y by 13% from 1Q2016.

Hence, est. 1Q2017 EPS = 14.7 x 1.13 = 16.61 cent

Total number of outstanding shares = 3,342,000,000

Estimated profit after tax = 16.61 x 33420000 = 555.1 million RM

Let's be conservative and add a discount factor of 0.8 due to possible other losses not included.

Conservative estimate = 555.1 x 0.8 = 444.1 million RM

From what I see, China wants to be the major stakeholder in the HSR project, by using IWH-CREC as a possible means to get the project.

However, it seems Malaysia govt is not comfortable with the fact that such key assets fall under the control of China Govt.

Hence, they chose not to pursue further and took back the 100% stake for Bandar Malaysia.

But, this in turn results in the possibility of China withdrawing all other possible investments in Malaysia in the future. This is a govt to govt project mind you.

If there is such a huge outflow of capital from Malaysia, IWC is just the beginning..the whole Bursa will be impacted negatively..

It may be the case whereby payment is made to a similar sounding company but its in fact the wrong company...

Adui, only happens in Malaysia.

It's good that IWC/ IWH may be raising the cash necessary to pay TRX what is due, but could it be too late?

Well, I think the ball is in TRX's court now...They may not play ball as the deal has lapsed according to them.

Don't get me wrong...I am hoping that the deal goes through as well as I have shares in Ekovest, however all aspects should be considered. They may put the land out to the highest bidder.