David..i admire you for the amount of hardwork you had placed for compiling all these hard to obtain information and present it in a relatively easy format for people to go through and understand.
Nice to see the information in all your posting has the 'required flow' / continuity to it. My sincere appreciation.
Thanks probability and soojinhou for your comments. I corrected Rapid to 2019 but normally with some technical challenge and big investment required, it has the possibility to delay.
paper , so many articles posted on these to explain it..but the core factor is the 'constraint for refining within the region'....
for HRC, one needs not worry if the current good crack spread is sustainable..but only just value it with a reasonable long term high complexity refinery margins.
as can be shown, even 6 USD/brl should easily value it at RM 16 with a PE less than 10.
the current good refinery margin exceeding 9 USD/brl should be taken as a blessing to par down their Debts in the short term and even sustain a better net profit in the future with the finance costs completely eliminated.
The already low crude price had also eliminated risks of significant stock loss in the future ensures that HRC is rightly placed to kill the Debts.
I increased the size of the cash flow chart for a more comfortable view. Previous chart font size is too small. U can check again the article as I hv done some corrections
Thanks David for the hard works and efforts. Also many thanks on your selfishnless sharing here. I learnt a lot from reading all hardwoods here. Yours surely a must read!
A few things come to my mind as well. 1. Auto sales! If more cars on the road, it will lead to more demand, so more volume of business. So it might help to have some studies or forecast on future of autocar business in Malaysia? Will hybrid car be a threat , electronic car etc? 2.ROE is used here. It has also substantial debts. Is ROA more relevant? Assets is equity plus liability. 3. ROE my view could be misleading. Equity is not the price we paid now. We paid now market price RM6.36xoutstanding shares 300mil. If I were to takeover this Hengyuan now, I am buying it at open market this prices of RM1.91bil. isn't this more relevant, compared to equity of RM1.27bil above.
3. ROE my view could be misleading. Equity is not the price we paid now. We paid now market price RM6.36xoutstanding shares 300mil. If I were to takeover this Hengyuan now, I am buying it at open market this prices of RM1.91bil. isn't this more relevant, compared to equity of RM1.27bil above.
Yes. Debts might not be a major concern now unless interest keep rising too fast. But still it is manageable after considering inventory, which can easily convert into cash. But in term of return should we use ROA?ROE?
I always use ROA to ensure its definitely way way above Cost of Debt (COD, the interest rate). Their difference is basically 'the sea depth' for the Ship to stay afloat.
This way we know we dont get cheated by high ROE due to high Debt while the ROA is just barely above the COD.
If the ROA too near to COD and sinks just a little lower the ship may just hit the seabed..and stall.
New IPO: The onshore and offshore support services provider for the O&G industry, Steel Hawk Bhd aims to list on the Ace Market!
MQ Trader 3393 views | 3 d ago
0:17
New IPO: The largest mini-market player and a leading groceries retailer in Malaysia, 99 Speed Mart Retail Holdings Bhd aims to list on the Main Market!
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....
probability
14,466 posts
Posted by probability > 2017-07-27 18:23 | Report Abuse
http://in.reuters.com/article/asia-refinery-idINL4N1JY2A3