they had increased their inventory stock pile..with appreciation of crude price, next qtr results should be even more explosive if the current refinery margin is maintained
@Speakup, china company have lots problem no doubt on it. But Heng Yuan in china is a giant size company, i dont think they will do any hanky panky things to spoil their company reputation.
I think hengyuan by PE is definitely cheap but there are a few factors working against it
1. not every investor can take pure oil refiner's earnings volatility. crack spread is good now but can change anytime 2. china companies reputation is too bad in Malaysia already, most fund managers won't buy to avoid getting query 3. they already guided will need to spend RM1b in 2018, shut down the plant to upgrade to comply with regulations. so medium to longer term investors may shy away from it 4. high debts and cashflow not as strong. the net debt will only get worse with the RM1b capex upcoming
fair PE is anyone's guess. I don't have hengyuan but happy for hengyuan shareholders as well. just be aware of the downside risk
Hengyuan is not those China company as you see in Xingquan, Msports, XDL these are the real China Company base in China but listed in Malaysia. Hengyuan should be call A China run Malaysia company where its HQ in Port Dickson.
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
soojinhou
869 posts
Posted by soojinhou > 2017-05-25 11:10 | Report Abuse
Since the company is highly geared, maybe it's better to use EV/EBIT rather than PE ratio.