Posted by Mohd Fahmi Bin Jaes > 2018-02-03 22:04 |

Post removed.Why?

Posted by calvintaneng > 2018-02-03 22:11 | Report Abuse

Mohb Fahmi

Dow up from 18,000 points to 26,000 points is 44% Up

Dropping 665 points only 2.54%?

DID KLSE GO UP BY 44%?

SO WHY PANIC NOW WHEN DOW ONLY CORRECTED A LITTLE?

Posted by probability > 2018-02-03 22:51 | Report Abuse

90 cents per qtr, 360 cents per annum for RM 14 Billion investment (RM 46 per share) sounds logical as they are looking ahead into the benefit they can get by supporting their retail segments...

Posted by longkanginvestor > 2018-02-03 23:22 | Report Abuse

This was what probability sifu has mentioned before this! Imagine if petronm is willing to inest rm14billion..how much is hy worth? :)

Posted by longkanginvestor > 2018-02-03 23:28 | Report Abuse

I must really salute probability for having such sharp and forward thinking to be able to see through all this while others are still nitpicking over temporary hiccup is share price movement!

Posted by Activeinvestor > 2018-02-03 23:35 | Report Abuse

No wonder Petronm now follows HY's tail given the above illustration.

Tq Future Eyes and probability sifu, you both are great !

Posted by LA777 > 2018-02-04 08:02 | Report Abuse

Thanks to Future Eyes and probability sifu, you guys are expert in this field and thanks for sharing!

Posted by pjseow > 2018-02-04 08:37 | Report Abuse

As what I have commented earlier , a return of US 600 million or RM 2400 million per year from an investment of RM 14 billion is worth it . Based on Petronm's announcement ,the RM 14 billion upgrade will enable petronm to have a total capacity of 178 kbpd ( 88+90) . Whether HY ( current capacity of 112kbpd) is worth RM 14 billion with its planned upgrade by borrowing another RM 1.7 billion recently is not clear to us . HY do has a licenced capacity of 156 kbpd but no one know how much is required to upgrade to this 156 kbpd capacity .

Posted by pjseow > 2018-02-04 13:26 | Report Abuse

Petronm has the retailed business which is not assessed in this topic .
Its 580 petron stations earned more than half of the total earnings ( refinery + retail) .

Posted by elainesong > 2018-02-04 14:22 | Report Abuse

Future Eyes didnt add in the strong eps from retail segment..............that means higher total eps for future years !!!!!!!!! Yeah yeah.......will win big big

Posted by Halite > 2018-02-04 18:35 | Report Abuse

i also find this piece of homework a bit careless

Why?

1. How is the 14B fund is used, any detail announcement from the company yet ?
what happen if only part of it is used for refinery , the rest is used for retailing ,petrochemical and other, then your calculation and comparison are wrong.
how it is executed , can not be a JV or other business model?

2. this sentence is very misleading.
"....Perhaps, the above may also answer what could be the fair valuation of Hengyuan, RM 14 Billion?"
why ?
if all the 14B is dump into refinery, how do you know Petronm 14B new plant has the same efficiency as Hengyuan
which costs less than 2B, any data to support you claim . do not tell me the chinaman can do magic


3. The article indirectly implies that Hengyuan is a better buy than Petronm . this is not right
Hengyuan has only refinery
Petronm has refinery, 560 petrol stations, petrol chemical and land asset

no value investor will think a high risk business like hengyuan where its earning rely heavily on crack spread and
got to pray everyday there is less maintenance plant shut down and mishap ,is better than a well integrated
business like Petronm

4. management efficiency
Petronm management has already proven its ability to reward the shareholders with handsome dividend , to bring
the company to net cash status with zero borrowing from the billion borrowing at the time of acquisition and now
a mega expansion plan to upgrade the company to the next level growth

what about hengyuan?
nothing, still current huge borrowing of 1.3B + a new borrowing of 1.7B for upgrading
any dividend ? nothing ! but EPS RM3.6
what about Petronm? paid 22 cents dividend with the EPS less than 1.60

Conclusion:
THE BLIND ALSO CAN SEE LAH..... WHICH ONE IS BETTER

Posted by perterpan > 2018-02-04 22:00 | Report Abuse

Haha, only those "half blind" like future eyes can't see

Posted by Alex™ > 2018-02-04 23:36 | Report Abuse

aiya, just by the intention that petronm want to dump 14b into a PE <5 refinery business, already tell u something...

either they too much money dunno where to burn, want to invest in a segment with ultra low market valuation, or they got something behind the card.

Posted by Aero1 > 2018-02-05 08:51 | Report Abuse

So this IMO rules leave Petron with no choice but to spend the 14B. It makes sense as Petron is expanding its retail segment.

Posted by Aero1 > 2018-02-05 08:53 | Report Abuse

It is a good move but just that future dividend may be compromised for high working capital requirements.

Posted by soojinhou > 2018-02-05 09:16 | Report Abuse

Well, yes and no. Petron's refinery is designed to process sweet and light crude. By definition their raw material has low sulphur content. While I'm not privy to exactly how much sulphur is in their fuel oil, it should be low because the raw material is sweet.

Posted by FutureEyes > 2018-02-05 10:56 | Report Abuse

The plant cost, technology level, and the value addition on products should be higher in sequence as per below:

simple refinery with sweet crude > simple refinery with sour crude > complex refinery with sweet crude > complex refinery with sour crude

There would have been no incentive for petron to have the 88k bpd with sweet crude designed originally to have products meeting IMO 2020 specification back then.

It is still a simple refinery designed for a less demanding task originally.

Unless simple refinery install scrubbers they would not be able to meet the IMO 2020 requirements on fuel oil.

Petron must be thinking far ahead to go for complex refinery all together to support their retail requirements which are mainly petrol and diesel.


Posted by soojinhou > Feb 5, 2018 09:16 AM | Report Abuse

Well, yes and no. Petron's refinery is designed to process sweet and light crude. By definition their raw material has low sulphur content. While I'm not privy to exactly how much sulphur is in their fuel oil, it should be low because the raw material is sweet.