In another article, david_tan had already corrected you that your RM400 inventory gain in 2017 is wrong. And he explained with proper accounting stantards and calculatation. Don’t be so stubborn lah. If wrong, accept it. Why still keep on using salah figures and come up with manipulative article like this?
I copy and paste david_tan’s comment below:
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Your inventory gain of RM400m is incorrect. I believe you are referring to MFRS 13 (Fair Value Measurement). The inventory is classified as a Level 1 asset and the market market value is quite readily available.
As at 31 December 2016, inventory is valued at RM826m. Brent crude price was RM255 per barrel. This translates to approximately 3.2m barrels in hand.
As at 31 December 2017, brent crude price was RM272 per barrel. The fair value of the said 3.2m barrels is therefore RM870m.
The fair value gain on inventories in FY 2017 was therefore only RM44m, and not RM400m claimed by you.
And the fixed cost during upgrade exercise. I don’t know where you got your RM130m figure from lah. Regardless, according to accounting standards, that amount spent will be capitalised as fixed assets. Wont affect current year P&L. It affects cash flow but not profit.
Your article is terribly inaccurate. If you dont know your accounting, dont simply come up with accounting based articles lah. Keep to theoretical articles please.
the refining margin is a complex between cost and net realized selling prices....and the good thing both Petron and Hengyuan is that since Jan, we have changed to weekly re pricing.....that has certainly stablised the PL of both Hengyuan and Petron.
and looks like the selling prices formula has improved since last year.....maybe that is the deal struck with the government before the takeover from Shell.
Business risk of Hy is volatility of gross margins....
with $ 40 revenue per share p.a......the eps of HY is certainly very volatile...any slight change in gross margins translates to disproportionate changes in eps....that is a fact of life for refineries.....
In the life cycle of a share such as HY.....kyy got the money and the holding power to see the next up cycle and enjoy a 300% return.....can or not?
Well, I salute Mr. 8818!!!! His previous post before the sharp increase in share price of HY really showed he has foresight. Now he is demonstrating rational thinking by showing good analyst on bad future of HY.
Unlike icon8888 and others who only knows to promote.....
So Icon8818 was a fake one no wonder use a/c to mislead many n caused a drastic fall to Rm6.15,a dishonest person.Any person who impersonated another person's name would likely have questionable characters.
Global average refining margins shrank from $16.30 per barrel in the third quarter to $14.40 per barrel in the fourth, according to BP. That narrowed even further to $12.10 per barrel in the first few weeks of 2018. BP says that as a rule of thumb, its earnings fluctuate by $500 million for every $1-per-barrel change in the refining margin. While the figures are different for other companies, the general result is the same. Shell said it realized average margins of $8.59 per barrel in the fourth quarter along the U.S. Gulf Coast, compared to $13.04 per barrel in the third.
Not to forget HRY refinery in PD is grandfather old complex fit for demolition.
Not an efficient facility to get cheap product. How about maintenance for this grandfather facility? Beware, this is the potential source for creative accounting. Find out more from fake accountant............
Icon8818, you are not correct on your derivation below.
(1) You only need 1USD/brl reduction in refining margin to result with 160M reduction in gross profit.
(2) I think even in Q1 itself they would have bought high priced oil in Jan and sold at cheaper price in Feb and early March - big loss due to FIFO accounting.
(3) Not logical to say no shutdown and MTA in 2018.
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....
lizi
1,968 posts
Posted by lizi > 2018-04-07 18:42 | Report Abuse
50 sens only for whole year? That's very scary, at rm8.35 that will be trading at forward pe of 17....don't scare me leh...