Posted by HENGYUAN @RM21 CONFIRM COMING > 2017-12-08 12:25 | Report Abuse

WOW! VERY INFORMATIVE, all way bullish till next quarter result out!

Posted by probability > 2017-12-08 12:36 | Report Abuse

wait till they see the cash flow in Q4!

Posted by HENGYUAN @RM21 CONFIRM COMING > 2017-12-08 12:37 | Report Abuse

hehe, all eye big big

Posted by mmk79 > 2017-12-08 12:48 | Report Abuse

Very detailed article. 2 thumps up.

Posted by Mohd Fahmi Bin Jaes > 2017-12-08 13:05 | Report Abuse

Complex

Posted by pitbull > 2017-12-08 13:05 | Report Abuse

Got mandrin version?..i understand THIS article 80% only...i wanna understand 101%.....Davidlim.
HELP....

Posted by Aero1 > 2017-12-08 13:07 | Report Abuse

Very good.

Posted by Ricky Kiat > 2017-12-08 13:07 | Report Abuse

big thanks to sifu davidslim .

Posted by probability > 2017-12-08 14:00 | Report Abuse

The below article is one of the strongest argument why HY (a Complex refinery) future refining margin is bright:

https://www.platts.com/IM.Platts.Content/InsightAnalysis/IndustrySolutionPapers/SR-IMO-2020-Global-sulfur-cap-102016.pdf


IMPACT ON REFINING SECTOR

The more sulfur-constrained world of 2020 will have huge implications for the global refining sector, undermining margins for simple refineries that turn a significant share of their crude run into HSFO, but potentially boosting margins for complex refineries able to take advantage of it.

According to the UK Petroleum Industry Association (UKPIA), a change to 0.50% mass sulfur marine fuels “would have a massive impact on refinery configuration and operations,” and would require some combination of the following four main approaches, each with its own drawbacks.

1) Substantial investment in upgrading fuel oil residues to gasoil grades (i.e. building secondary units such as crackers, visbreakers and cokers). But as many refiners are global companies they will only make such investments in locations with good returns (leaving the prospect of patchy availability).

2) Reduction of residue production through changes to a sweeter crude slate. The downside here is of course that such crude grades trade at higher differential, reducing refining margins, and will be in even more demand, and thus more expensive, in 2020.

3) Residue destruction, stopping the production of fuel oil. This also requires huge investment.

4) Desulfurization of residual fuel oil and blend with low sulfur gasoils. Similarly this requires huge investment. According to the IEA, these units are more expensive than upgrading units, and presently there is little demand for fuel oil desulfurisation units, with global capacity estimated to be less than 0.1 mb/d.” (Source: Medium-Term Oil Market Report, February 2016)

Posted by probability > 2017-12-08 14:15 | Report Abuse

Hope the above article gives the message to all once and for all why PetronM is going for 6.4 Billion investment.

By the way its not like an upgrading you do for HY where you can still run the 45 kbpd plant of PetronM till new refinery is completed (unless it is placed in a completely new location).

Posted by HENGYUAN @RM21 CONFIRM COMING > 2017-12-08 14:24 | Report Abuse

probability, well explain

Posted by shortinvestor77 > 2017-12-08 15:18 | Report Abuse

Cash call is coming. Shareholders must take part.

Posted by shortinvestor77 > 2017-12-08 15:19 | Report Abuse

Do not run and leave HY. Be loyal.

Posted by Pusher_Punisher > 2017-12-08 15:59 | Report Abuse

sell all my other non performing counter.. all in hengyuan.
pls read with an open mind. and tell yourself, where got company like this in bursa. Joke on you if miss this one even after all the sifu help/explanation/articles

special thanks to davidslim/ICON/probability/OTB/stock raider
not to forget all those remain loyal to HY from rm 5 till now. you guys really did your homework..

Posted by stockmann > 2017-12-08 17:37 | Report Abuse

Good analysis. But bear in mind the unused tax losses carried forward in the AR already stated in gross amount, mean you shall offset the gross profit, i.e. before X24%(current statutory tax rate in Malaysia)

Posted by probability > 2017-12-08 17:51 | Report Abuse

Bear in mind that when you buy a Musangking at RM5 per kilo...there is Tupai bite on its skin..

Posted by SALAM > 2017-12-08 18:05 | Report Abuse

Thank you very much for your in-depth and consistent effort for the benefits of all... Very kind of you..Keep it up. Shall wait for your next analysis

Posted by Alex Foo > 2017-12-08 19:31 | Report Abuse

This is homework. David > all

Posted by lincm86 > 2017-12-08 19:48 | Report Abuse

David Lim, Thanks a lot again for the detail analysis. Good work!!

Posted by probability > 2017-12-08 21:20 | Report Abuse

Important thoughts to think:

(1) what would happen when all the sea ships switch to gasoil (diesel) from Fuel oil in 2020?

(2) what would happen when these simple refiners decide to close down their refinery and refuse to invest heavily on scrubber or new system for higher conversion from fuel oil to Diesel?

(3) what would happen when even if they decide to invest like PetronM is contemplating...and it takes 4 years to commercially produce their products?


(4) what happens to the gasoline margin due to its reduced production as complex refiners selectively produce more and more diesel to cater the sudden surge in its demand due to:

i) ships needing them in replace of Fuel oil, and

ii) decrease in existing supply from simple refiners who had been forced to shutdown for upgrade or new investment as their Fuel oil has no value.



What are their effects on Gasoline and Diesel crack spread?

Posted by HENGYUAN @RM21 CONFIRM COMING > 2017-12-08 21:25 | Report Abuse

Fortune bills bro, so how high you think it can go?

Posted by stockraider > 2017-12-08 22:11 |

Post removed.Why?

Posted by probability > 2017-12-09 01:03 | Report Abuse

Refining capacity might fall short of demand after 2020 -Varo CEO

https://www.reuters.com/article/refineries-oil/refining-capacity-might-fall-short-of-demand-after-2020-varo-ceo-idUSL8N1MU4J9

LONDON, Oct 19 (Reuters) - Global oil refining capacity might not meet demand for oil products after 2020 as consumption continues to grow, boosting profit margins, Roger Brown, chief executive of European refiner Varo Energy, said on Thursday.

Refining margins are expected to remain strong in the long term due to strong demand for gasoline and diesel as well as a switch to higher-grade bunker fuels after 2020, Brown said at the Oil & Money conference.

“We see very good long-term refining margins at the moment.”

Refining capacity set to come on line in the coming years, including large plants in Kuwait, China and India, might not be enough to meet growing demand, he said.

“At the pace demand is growing… You’ve got to see supply and demand in refining between 2020 and 2025 remaining balanced and maybe a little short,” Brown said.

Varo Energy, a joint venture between the world’s top oil trader Vitol and private equity giant Carlyle Group, operates two refineries in Europe. (Reporting by Ron Bousso; editing by Jason Neely)

Posted by probability > 2017-12-09 13:02 | Report Abuse

IMO 2020 Part 3: Refiners’ Perspective

November 16, 2017

https://stillwaterassociates.com/imo-2020-part-3-refiners-perspective/

(1) Refineries currently producing HSFO will be the most threatened by this rule.

(2) Refineries that currently produce minimal HSFO due to vacuum resid processing (e.g. coking, hydrocracking) will likely see IMO 2020 as an opportunity rather than a threat.

(3) Time is the enemy of refineries currently producing HSFO. Unless refinery modifications to reduce HSFO production are already well underway, those modifications will not be onstream until well after 2020.

(4) Key price differentials for refiners will likely change markedly in 2020, producing significant changes in processing strategy for many refiners:

(i) Distillate prices will increase markedly relative to high sulfur residual fuel products. Distillate prices (particularly in coastal markets) may also increase relative to gasoline. This will create product mix optimization opportunities for refiners and bunker blenders/suppliers. Intermediate streams that historically might have been processed on catalytic cracking or hydrocracking units may alternatively be routed to IMO-compliant fuel oil blending.

(ii) Vacuum residue yield and sulfur content will cause crude price differentials to widen between grades (e.g. high resid content sour crudes versus low resid content sweet crudes). This will create crude slate optimization opportunities for almost all refineries.

(5) Expectation of a wide price differential between IMO 2020-compliant fuel and traditional HSFO will create an incentive for shipowners to install onboard scrubbers and for refiners to install (or expand) resid upgrading facilities. Investment decisions by either of these industry sectors, driven by a wide price differential expectation, will directionally reduce the magnitude of the above market price changes.

Posted by probability > 2017-12-09 18:03 | Report Abuse

Preparing for a Sea Change in Global Refining

JUNE 14, 2017

https://www.bcg.com/publications/2017/downstream-oil-gas-petrochemicals-energy-environment-preparing-for-sea-change-in-global-refining.aspx

A shift in HSFO pricing from its higher value to its lower value could have a significant knock-on effect on the price differential between light and heavy refined products. Specifically, we expect a spike in the differential. Which refineries are profitable and emerge as leaders will depend on their capabilities and product mix.

"Complex refineries with hydrocracking and residue desulfurization units that enable maximizing LSFO and distillates production will be able to navigate the disruption. Asia and the Middle East are home to such refiners."

- HENGYUAN REFINERY PERFECTLY FITS IN HERE!

Additionally, refiners with coker units, such as those on the US Gulf Coast, will fare well, as will refiners with access to crude with very low sulfur.

Posted by probability > 2017-12-09 20:57 | Report Abuse

Referring to page 6 of the below article and from the gasoline, diesel and fuel oil yield < 5% presented on Davidtslim charts above for HY, one can see HY refinery falls under 'deep conversion' category.

https://www.energyinst.org/_uploads/documents/session-4-refining-notes-2012.pdf

On the other hand, PetronM which does not have a catalytic cracker...falls into Simple Refiner category yielding a significant portion of their products as Fuel Oil.

Posted by stlf > 2017-12-10 00:19 | Report Abuse

mohd fakmi...you pea brain...get the fuck out of here.

Posted by probability > 2017-12-10 21:44 | Report Abuse

2020 IMO global bunker fuel regulations: A challenge too far for European refiners?

https://www.cornhilleconomics.com/single-post/2017/01/17/2020-IMO-global-bunker-fuel-regulations-A-challenge-too-far-for-European-refiners

The IMO global maritime sulphur limits regulations are likely to have an adverse effect on European refiners unable to make the necessary investments in refinery upgrading triggering further refinery shut downs.

Posted by probability > 2017-12-11 00:11 | Report Abuse

http://www.shell.com/business-customers/marine/fuel/marine-network/_jcr_content/par/textimage_1253347556.stream/1497626896370/1f511fb11dae6ae91ba293a525c0cedb92e68946e70d24adc747f0c91f98a969/shell-marine-imo-brochure.pdf

Posted by probability > 2017-12-11 00:13 | Report Abuse

MEPC 71: 2020 deadline reaffirmed as IMO agrees to promote consistent implementation:

11/07/2017

https://ibia.net/mepc-71-2020-deadline-reaffirmed-as-imo-agrees-to-promote-consistent-implementation/

Any suggestion that there may be any form of delay to the 1 January 2020 implementation of the 0.50% sulphur limit in 2020 was ruled out at the 71st session of the Marine Environment Protection Committee last week, as a majority of member states rejected a proposal to collect data to allow the International Maritime Organization to take stock of the availability situation ahead of 2020.

Posted by newbie5354 > 2018-01-10 21:02 | Report Abuse

If Brent USD 70 petrol price(Ron 95) RM 2.26 how is spread?