Posted by cheoky > 2017-11-12 13:25 | Report Abuse

haiz i tak taruh lo. i impress with author estimation to the extend unbelievable thoroughness. full stop. you cont your accumulation on hrc. good luck

Posted by stockraider > 2017-11-12 13:29 | Report Abuse

SEE U TALK PEOPLE GREAT CHINAMAN GRANDFATHER FOR WHAT LEH ??
ASK ALREADY CAN MAH...NO NEED TO INSULT PEOPLE 9 GENERATION LOH..!!

Posted by cheoky > Nov 12, 2017 12:30 PM | Report Abuse

u work for the shangdong chinaman? so geng. hedging also captured....

Posted by probability > 2017-11-12 13:31 | Report Abuse

unbelievable EPS or thoroughness?

Thought he gave an indicative work based on closing and starting crude price...plus indicative refining margin..kikiki

Posted by cheoky > Nov 12, 2017 01:25 PM | Report Abuse

haiz i tak taruh lo. i impress with author estimation to the extend unbelievable thoroughness. full stop. you cont your accumulation on hrc. good luck

Posted by ks55_ > 2017-11-12 13:46 | Report Abuse

If EPS really 130 sen publish early like Pet Dag. Can out this week no need delay.

Posted by stockraider > 2017-11-12 13:57 | Report Abuse

VERY WRONG SHORT TERM THINKING MAH....!!
RESULT ANNOUNCEMENT BASED ON DIRECTOR AVAILABILITY MAH....AFTER BOARD MTG THEN ANNOUNCE LOH....!!

SO THEY ALREADY PRE BOOKED THE MTG DATES LOH...!!

U MEAN LIKE PUDU MKT VEGE AHFAH MEH, IF VEGE PRICE VERY GOOD, QUICKLY OPEN STALL EARLY AT 4.00AM INSTEAD OF 5.30 AM MEH !!

Posted by ks55_ > Nov 12, 2017 01:47 PM | Report Abuse

If Q3 QR good why dare not out early like Pet Dag?

Posted by Alex Foo > 2017-11-12 14:05 | Report Abuse

I actually scare when future eye is not a naysayer anymore.... Can ur valuation be more conservative? Say 13 sen only will help a lot to balance a bit. I dun want so fast stage 4.

Also, u discounted possible shutdowns, unplanned inefficiencies, awesome hrc forex skill (see q²).

Posted by ks55_ > 2017-11-12 14:07 | Report Abuse

Blog writer bought above RM 10 must cheat EPS 130 sen?

Posted by probability > 2017-11-12 14:09 | Report Abuse

Alex, its more of a game of how close he can get to the bulls eye ma...its not about conservative EPS to justify evaluation...i guess

how if the inventory gain is for the whole stock of 1.2B?

how if they operate at a higher throughput?

how if they manage to hedge the crack spread at higher value than 10?

Posted by Alex Foo > 2017-11-12 14:11 | Report Abuse

Haha... See... Forecast too high... 130sen one quarter how to belief~ now ppl say u cheat d

Better be conservative... And let hrc result speaks for itself.

Alex tp 30 sen beat qoq yoy

Posted by lizi > 2017-11-12 14:42 | Report Abuse

Huat ah !!!

Posted by Alex Foo > 2017-11-12 16:41 | Report Abuse

haha probability sifu...u know la...later all so optimistic RM1.30 eps, and come out 30sen? how? gap down kau kau...aiyoyo....

Posted by probability > 2017-11-12 16:45 | Report Abuse

If people become optimistic with its actually EPS also...do you think it can get to a level where they are optimistic on its PRICE?

if it quickly hit paperplane sexy babe target..next week...then we can say market became optimistic lor..kikiki

Posted by ks55_ > 2017-11-12 16:48 | Report Abuse

Optimistic because you chased HRC above RM 10 so expect likewise QR?

Posted by Alex Foo > 2017-11-12 16:49 | Report Abuse

lol....if want hit paper bro tp, need to limit up tmr. Cannot lar, must be realistic....

1 day up 10 sen ok? if rollar coaster my heart also cannot take =D

Posted by Kesley Tan > 2017-11-12 16:57 | Report Abuse

sometimes I don't understand those people who keep bashing this stock. If you don't really like, you should stay at the stock you invest.

I mean the problem of these people is negativity, the community will only prosper if we spread positive energy ma

Posted by ks55_ > 2017-11-12 16:59 | Report Abuse

A good stock should give dividend why HRC cannot?

Posted by Alex Foo > 2017-11-12 17:04 | Report Abuse

why Berkshire cannot giv div? must be con cash

Posted by ESPESP > 2017-11-12 17:04 | Report Abuse

This KS55 really.
Stay away if you already sell ur share at RM8 last week.

HRC plans to reduce borrowings till nil, before setting up a dividend policy. Just patient ?

Posted by ks55_ > 2017-11-12 17:06 | Report Abuse

Who push up HRC why cannot declare to Bursa? ASB sold must declare why those buying must hide?

Posted by Alex Foo > 2017-11-12 17:06 | Report Abuse

ks55 can start buying after hrc declares its first div =)

Posted by ks55_ > 2017-11-12 17:16 | Report Abuse

Not only dividend price also important for me. RM 2 when can reach again?

Posted by cheoky > 2017-11-12 17:46 | Report Abuse

si stockraider i respect you but you too emotion in hrc. you should disconnect from hrc for like 2 days. that should be ok for your wealth and wellbeing. let me correct myself regarding author article view. I admire author thought thoroughness in covering all aspect of refinery's parameters just as per q2 estimation. i keep asking hedging previously. this author also provided. u disconnect pls. two days will do.

Posted by veln82k6 > 2017-11-12 21:22 | Report Abuse

Hedging loss not yet taken up.. Result may not so good..

Posted by pang72 > 2017-11-12 23:17 | Report Abuse

futureeye, i am awaiting your write up for HRC for so long.
Finally it is out. It is matching my assumption.
Good work!

Posted by FutureEyes > 2017-11-12 23:23 | Report Abuse

yes, your request motivated me to write. Thanks

Posted by Invest_168 > 2017-11-13 00:18 | Report Abuse

Good sharing! The earning will be great for Hengyuan this Q3.

Posted by Ricky Yeo > 2017-11-13 07:20 | Report Abuse

Just a thought experiment. Not saying your assumptions are wrong but an experiment. The assumption of 130 cents EPS rest on 10 variables, which 7 out of 10 are macro factors. To build in the uncertainty of reality, assume all variables are off by 5%. So what is suppose to 'benefit' will adjust downward by 5% and likewise revise upward 5% for any cost.

So:

A) 106k bpd x 85 days x 9.5 USD/brl x 4 RM/USD = 342 mil

B) 47.6% hedging x 4700K = 2237k x USD 49/brl = 109 mil (Starting)
2237k barrels x USD 53/brl = 119 mil (Ending)
Gain = 10 mil x 4 RM/USD = 40 mil

342 mil + 40 mil = 382 mil - 126 mil (SGA) = 256 mil or 0.85 cents

So a mere 5% swing on all the variables is enough to swing EPS by 35%

Posted by ESPESP > 2017-11-13 08:56 | Report Abuse

5% swing is a lot for all variable.. >.<
Nvm..

Even at 85 cent, this share is worth RM15, easy lo.. so undervalue.

Posted by Ricky Yeo > 2017-11-13 09:15 | Report Abuse

Given the unpredictable nature of macro factors, you want to be roughly right not precisely wrong. And it is common even for analyst to miss actual EPS by 10-30% +/-

Again this underlie a huge misassumption. EPS of a quarter has little to do with value, hence it rarely changes the fundamental valuation of a company. If share price does change, it has more has to do with market sentiment that true fundamental, disagree as you like. It is not that hard to test this hypothesis. That is why I can never fathom why someone would enjoy estimating EPS, throw in a multiple, 10x just to make it convenient, and assume the market will agree with him. And worse, when the actual EPS came out and confirmed his prediction and the share price followed, he started to think he is skilful. I think this misconception of fundamental is worse than the estimation of EPS, which itself is a futile exercise to begin with.

Posted by Alex Foo > 2017-11-13 09:55 | Report Abuse

good intelligent discussion here. i like. alex listen.

Posted by Alex Foo > 2017-11-13 09:56 | Report Abuse

If i were to follow Graham's advice, he said not to emphasize so much for the future, but to buy for what it is today. His thesis is that the future is uncertain and earning forecast is often a miss. HRC provides attractive price entry (if you want Graham's 22.5 law), with improving fundamental like crude oil price and favorable crack spread, and guaranteed sales, and sustainability post euro4m.

Posted by dusti > 2017-11-13 11:45 | Report Abuse

Any argument will have a nice fit for Hengyuan.

Posted by stockraider > 2017-11-13 12:45 | Report Abuse

NOT TRUE LOH...SHARE PRICE IS DRIVEN BY BOTH SENTIMENT AND FUNDAMENTAL LOH....IF BOTH TANGO...IN WHICH HENGYUAN WILL...CAN BE VERY VERY POWERFUL LOH...!!

osted by Ricky Yeo > Nov 13, 2017 09:15 AM | Report Abuse

Given the unpredictable nature of macro factors, you want to be roughly right not precisely wrong. And it is common even for analyst to miss actual EPS by 10-30% +/-

Again this underlie a huge misassumption. EPS of a quarter has little to do with value, hence it rarely changes the fundamental valuation of a company. If share price does change, it has more has to do with market sentiment that true fundamental, disagree as you like. It is not that hard to test this hypothesis. That is why I can never fathom why someone would enjoy estimating EPS, throw in a multiple, 10x just to make it convenient, and assume the market will agree with him. And worse, when the actual EPS came out and confirmed his prediction and the share price followed, he started to think he is skilful. I think this misconception of fundamental is worse than the estimation of EPS, which itself is a futile exercise to begin with.

Posted by 3iii > 2017-11-13 17:36 |

Post removed.Why?

Posted by 3iii > 2017-11-13 17:39 | Report Abuse

The true margin on refining maybe much lower than the simple crack spread would suggest.

Posted by stockraider > 2017-11-13 17:44 | Report Abuse

I thought warren buffet advice to be roughly right & no need precise loh....!!

Question pose if 3iii has been proven so wrong many time...do u think his comment got credibility;

Posted by stockraider > Nov 13, 2017 05:38 PM | Report Abuse X

Just be wary of dishonest 3iii loh...!!
He has cheated simplesoul monies loh...!!
He call people to sell hengyuan when Rm 3.60...now Rm 10.60 a staggering losses loh...!!

Posted by Up_down > 2017-11-13 19:19 | Report Abuse

Nobody care about CIT.....so much fun enjoying the rally. It seems that grace period has been ended and going to reflect in this QR announcement. HY was probably enjoying balance of unabsorbed tax losses RM 1.1 billion in year 2014. Anyway, PER is not that high after taken into account CIT. lol

JayC Why no tax?
11/11/2017 22:53

Posted by Jon Choivo > 2017-11-13 21:03 | Report Abuse

Ricky Yeo Given the unpredictable nature of macro factors, you want to be roughly right not precisely wrong. And it is common even for analyst to miss actual EPS by 10-30% +/-

Again this underlie a huge misassumption. EPS of a quarter has little to do with value, hence it rarely changes the fundamental valuation of a company. If share price does change, it has more has to do with market sentiment that true fundamental, disagree as you like. It is not that hard to test this hypothesis. That is why I can never fathom why someone would enjoy estimating EPS, throw in a multiple, 10x just to make it convenient, and assume the market will agree with him. And worse, when the actual EPS came out and confirmed his prediction and the share price followed, he started to think he is skilful. I think this misconception of fundamental is worse than the estimation of EPS, which itself is a futile exercise to begin with.
13/11/2017 09:15

Dont forget last round. Everyone predict heavenly result, show red.

This time, probability for good result is higher. Later, higher maintenance cost, give you see red. All die again.

Posted by 3iii > 2017-11-13 21:08 | Report Abuse

Oil refineries produce value-added petroleum products from crude oil. Profitability is thus determined by several different variables:

- Feedstock costs (primarily crude oil)
- Fuel costs and other operational costs for the refinery itself
- Costs of complying with emissions regulations (particularly NOx)
- Market prices for the products produced.

Posted by 3iii > 2017-11-13 21:09 |

Post removed.Why?

Posted by 3iii > 2017-11-13 21:10 | Report Abuse

A useful but simplified measure of refinery profitability is the “crack spread.” The crack spread is the difference in the sales price of the refined product (gasoline and fuel oil distillates) and the price of crude oil.

Posted by 3iii > 2017-11-13 21:11 |

Post removed.Why?

Posted by Jon Choivo > 2017-11-13 21:12 | Report Abuse

The crack spread is the easiest measure people have to measure future profit. But it is the least precise.

Before someone say you only need to be roughly right and not precisely wrong.

Remember this, you have no out. The only way hengyuan will go up, if it beats last quarter and last year by a fantastic amount. If it show even flat earning. Sure drop.

Business wise, hengyuan i still ok, but not that cheap anymore.

Posted by 3iii > 2017-11-13 21:13 | Report Abuse

The crack spread tends to be sensitive to the slate of products produced from the refinery. Gasoline and distillate fuel oil (heating oil) are two typically high-valued products, and refineries are generally engineered to maximize production of gasoline and fuel oil.

The crack spread is also sensitive to the selection of the oil price used. There are systematic differences in the prices of heavy crude oils versus fairly light crude oil. Due to these differences, the crack spread calculation (while illustrative) may not be sensible for a particular refinery.

Posted by 3iii > 2017-11-13 21:15 | Report Abuse

The true margin on refining maybe much lower than the simple crack spread would suggest.

Thus, we soon realise the promoters got their estimated profits of Hengyuan so wrong in Q2.

Is analysisng Hengyuan within their circle of competence?

More hypes and hot airs, than real substance are the many posts on the various price levels that Hengyuan may reach! ;-)

Posted by stockraider > 2017-11-13 22:28 | Report Abuse

VERY STUPID COMMENT MAH....!!

LAST YR CRACK MARGIN USD 5.5 BPD
GROSS MARGIN LAST YR = 9.7%

UPTO JUNE 2017 6 MTHS
CRACK MARGIN USD 6.5 BPD
GROSS MARGIN 30-6-2017 = 11.7%

RELATED MAH....THE HIGHER THE CRACK MARGIN SPREAD THE HIGHER THE GROSS MARGIN OF HENGYUAN LOH...!!

WHAT TYPE OF RUBBISH THIS 3iii TALKING LEH ??

Posted by 3iii > Nov 13, 2017 09:15 PM | Report Abuse

The true margin on refining maybe much lower than the simple crack spread would suggest.

Thus, we soon realise the promoters got their estimated profits of Hengyuan so wrong in Q2.

Is analysisng Hengyuan within their circle of competence?

More hypes and hot airs, than real substance are the many posts on the various price levels that Hengyuan may reach! ;-)

Posted by sell > 2017-11-13 22:30 | Report Abuse

Why QR not out? Worse than Pet Dag?

Posted by stockraider > 2017-11-14 08:55 |

Post removed.Why?

Posted by probability > 2017-11-16 14:04 | Report Abuse

Posted by probability > Nov 16, 2017 01:56 PM | Report Abuse X

Study the data presented here carefully, you will never find a generous man sharing & spoon feeding such information in i3.

You will notice that Q3 average Gross refining margin 30 to 40% higher than Q1 (for Brent (Cracking) and Dubai (Cracking) - which is of slightly higher complexity than Simple refiners like Petron who does Hydroskimming).

This will result with Net refining Margin exploding by more than 50% relative to Q1 (minimum)!

Posted by probability > Nov 15, 2017 10:00 PM | Report Abuse X

https://www.iea.org/media/omrreports/MHM.xls

Refer: 50/50 HLS/LLS (Cracking)

Jul-17: 10.48
Aug-17: 13.37
Sep-17: 14.38

Posted by probability > 2017-11-18 20:18 | Report Abuse

Q3 has 2 days extra compared to Q1, that means about 3% higher throughput in theory.