Posted by Equityengineer > 2017-02-22 23:56 | Report Abuse

Nicely written...

Posted by cheoky > 2017-02-23 00:02 | Report Abuse

Hard sell ar? Still Sumato gogogo. Bravo. Reborn esso definately better in reducing debt. Government removal of fuel subsidy remove the price ceiling bully factor on all refinener. Gogogo

Posted by Equityengineer > 2017-02-23 00:06 | Report Abuse

EV/EBITDA (Sector Median: 11.2) 2.9
No Brainer also

Posted by Equityengineer > 2017-02-23 00:12 | Report Abuse

Graham Number 6.91

Posted by Jay > 2017-02-23 07:39 | Report Abuse

Thanks for the article

1. USD appreciate does hit them as expected, this is consistent with what they guided in annual report. but the increase in revenue and GP margin just blew all these away

2. is it possible for your friend to share which crack spread does M'sia companies like Petronm relies on? I tried looking at various crack spread and so far Petronm results seems to have higher correlation with the European ones rather than the Asia Tapis one

Posted by sumato88 > 2017-02-23 08:11 | Report Abuse

Hi, Jay

1) USD appreciation does have negative impact to them if they never do hedging. If you look through the past 10 quarters, the co tend to record unrealized, realized and derivative gain when USD appreciate. So that's the positive impact that I refer to. However, 4Q16 they report forex/derivatives loss, so I think the crude oil hedging derivatives was the culprit. Anyway, all these are well covered by the expanding crack spread and crude oil inventory gain in the quarter.

2) Tapis crack spread is the crack spread that Malaysian refineries use, according to him.

Posted by bluelight > 2017-02-23 08:28 | Report Abuse

How to get/calculate crack spread? Thanks

Posted by sumato88 > 2017-02-23 09:15 | Report Abuse

I think only the industry website will have, but u need to subscribe the service. Another indication is our petrol price that government release every month. Just like the Feb price where we have a petrol price hike even though the crude oil price was stable mom.

Posted by xcelcap > 2017-02-23 09:55 | Report Abuse

dont simply take this article for buying Petronm. You will need to have to look at EPS growth rate and PATAMI full year to take the assumption on the price target.
EPS year on year actually drop 5%. Nett profit only grow 7% year on year. I would rate it to SELL on Rally.

Posted by xcelcap > 2017-02-23 09:57 | Report Abuse

SELLLLLL............

Posted by Jay > 2017-02-23 09:58 | Report Abuse

thanks sumato88

although I find the correlation between tapis and petron's results weaker, shall dig more into it.

Posted by Jay > 2017-02-23 09:59 | Report Abuse

@xcelcap please sell to me if you have any. more than willing to take it

Posted by xcelcap > 2017-02-23 09:59 | Report Abuse

Target Price to SELL around 7

Posted by xcelcap > 2017-02-23 10:36 | Report Abuse

Another thing , by using simple PE multiples you are able to more or less predict the price of a stock. The last time PetronM traded at 10 times PE is in year 2007. Bull Run period before collapse. so my 2 cents worth. If assumption PetronM is trading at 6.50x multiple which is fair. The stocks should be price around $6.50 which does not give much of upside. the only positive catalyst is EPS growth assumption which only GOD knows! so Fire your ##@$ analyst

Posted by xcelcap > 2017-02-23 14:22 | Report Abuse

already sold some at 5.90

Posted by wltan22 > 2017-02-23 14:48 | Report Abuse

xcelcap, I might have different opinions, for this company you based on EPS, historical PE, now we are talking around RM300m FCF each year (if can maintain) turn out to RM1.12/share, what a mind blowing cash cow, not many bursa companies can do that....

Posted by wltan22 > 2017-02-23 14:50 | Report Abuse

FCF is a real cash...

Posted by xcelcap > 2017-02-24 16:57 | Report Abuse

up to you to hold. for me i will sell on rally. clear all my position today..bye....

Posted by dusti > 2017-02-24 21:00 | Report Abuse

Content not enough to make educated decision.

Posted by probability > 2017-02-24 21:08 | Report Abuse

you are right wltan22, TTM cash yield at 18% (using current price of 6.09). Even at 25% payout your dividend yield is at 4.5%.

And the above is without taking consideration on the latest qtr developments due to phenomenal growth in Sales, and price differential between current finished product - locally due to government policy vs crude price.

If recent qtr results are repetitive...then definitely upside is another 100% at the least.

I am confident the crude price wont move up further...it can only go down due to Iran exports and our government will only keep raising the petrol price.


Posted by wltan22 > Feb 23, 2017 02:48 PM | Report Abuse

xcelcap, I might have different opinions, for this company you based on EPS, historical PE, now we are talking around RM300m FCF each year (if can maintain) turn out to RM1.12/share, what a mind blowing cash cow, not many bursa companies can do that....

Posted by probability > 2017-02-24 21:16 | Report Abuse

and if they can eliminate the finance cost (easily done with a year's cash flow), thats another minimum 10% upside.

Posted by wltan22 > 2017-02-24 21:24 | Report Abuse

@probablity, agreed, don't forget they are Philippines owned company, if days be net cash company, the dividend only can go up, not go down...

Posted by wltan22 > 2017-02-24 21:28 | Report Abuse

that's the beauty of the market, we can't get all the people agree with us, stay true with your understanding, everyday got sell and buy... haha

Posted by probability > 2017-02-24 21:34 | Report Abuse

thats a very good point wltan22...on dividend payout policy.

may be they are waiting for RM to strengthen against dollar or at least against Peso..

http://www.xe.com/currencycharts/?from=MYR&to=PHP&view=1Y

when RM strengthens , petron business or profit in terms of RM would not change (i think it improves for the same crude price in dollar) but the dividend value in dollar makes a big difference to Owners.

Posted by wltan22 > 2017-02-24 21:39 | Report Abuse

just wait and see, to me this company is one of the most undervalued company in Bursa, my2cent

Posted by paperplane > 2017-12-26 12:54 | Report Abuse

haha, what a dig back! great