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...

Posted by John_Lee > 2018-04-07 18:46 | Report Abuse

Icon8818,

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:

—————

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.

Posted by John_Lee > 2018-04-07 18:48 | Report Abuse

How you know 2018 will incur inventory loss of RM100m? You already know the price of crude oil on 31 Dec 2018? How you know? You time travel ah?

Posted by John_Lee > 2018-04-07 18:54 | Report Abuse

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.

Posted by paperplane > 2018-04-07 19:19 | Report Abuse

I am only interested if the cashfLows still healthy or not. Accounting figures are just gimmicks

Posted by paperplane > 2018-04-07 19:20 | Report Abuse

Dow Jones drop 500 points again, Monday will be bloodshed again everywhere. Just trade cautiously

Posted by mneo > 2018-04-07 20:55 | Report Abuse

Sorry..... not convincing......

Posted by qqq3 > 2018-04-07 21:01 | Report Abuse

A deterioration of refining margins in the fourth quarter was a major factor behind the disappointing results.....good....


then the opposite also can be true.

Posted by qqq3 > 2018-04-07 21:03 | Report Abuse

don't be funny icon....

what inventory gain $ 400m....accounting policy is lower of cost and net realisable value......


and what warren bufett wannabe values a company based on the results of an extraordinary year of upgradings?

business risks....sure got business risk......

icon

stock market about businessmen/risk takers vs professors
bulls vs bears
positive vs negative people

and of course fast actions vs arm chair critics.

pivotal moment vs frozen soldiers

and of course....buying for 3 years with 300% gain potential vs money in FD..........

Posted by qqq3 > 2018-04-07 21:03 | Report Abuse

what is this inventory gain $400 million business icon? the accounting policy is lower of cost and net realisable value....

and if inventory loss....well....not every year is inventory loss year.....

Posted by qqq3 > 2018-04-07 21:04 | Report Abuse

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.

Posted by qqq3 > 2018-04-07 21:05 | Report Abuse

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?

Posted by qqq3 > 2018-04-07 21:05 | Report Abuse

y trulyinvest > Apr 7, 2018 07:42 PM | Report Abuse

When pengerang start operation, refined products wil flood the market.
================

that is a business risk and maybe a business solution but got nothing to do with icon's writings.

Posted by cheoky > 2018-04-07 22:23 | Report Abuse

Qqq3 will eat humble pie. Don't mess with icon8888 intelligence

Posted by qqq3 > 2018-04-07 22:29 | Report Abuse

look at the work...not the person....what many times must I say it?

Posted by qqq3 > 2018-04-07 23:12 | Report Abuse

cheoky..icon cannot just pluck a figure out of thin air...and say he is intelligent.

Posted by cheoky > 2018-04-08 00:28 | Report Abuse

no need argue. we shall see.

Posted by supersaiyan3 > 2018-04-08 00:47 | Report Abuse

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.....

Posted by uptrending > 2018-04-08 06:33 | Report Abuse

Icon 8818 is also icon8888?
Same person?

Posted by CharlesT > 2018-04-08 07:30 | Report Abuse

Icon8818 is the pirated version of Icon8888

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

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.

Posted by Fam Jenny > 2018-04-08 08:06 | Report Abuse

Supersaiyan3 is another Icon8818's accomplice with purpose to deceive.

Posted by Icon8888 > 2018-04-08 09:00 | Report Abuse

https://klse.i3investor.com/blogs/icon8888/153280.jsp

Posted by supersaiyan3 > 2018-04-08 09:06 | Report Abuse

Fam Jenny, you do not have a brain.

Well, Icon8888 finally u reappear.

Posted by uptrending > 2018-04-08 09:39 | Report Abuse

Icon8888

Thank you for your confirmation and clarification.

Regards,

Posted by qqq3 > 2018-04-08 09:53 | Report Abuse

well, I was fooled by the fake one

Posted by CharlesT > 2018-04-08 09:57 | Report Abuse

Now u knew u r not that smart....

Totally of different style n level

Posted by ks55 > 2018-04-08 10:15 | Report Abuse

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.

Posted by ks55 > 2018-04-08 10:30 | Report Abuse

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............

Posted by LA777 > 2018-04-08 14:07 | Report Abuse

OMG! Fake Icon!!!!

Posted by probability > 2018-04-08 14:14 | Report Abuse

yes ...but REAL FACTS?

Posted by qqq3 > 2018-04-08 14:19 | Report Abuse

probability...u are just being stubborn...the $ 400 milllion figure is just as fake as the fake icon

Posted by probability > 2018-04-08 16:54 | Report Abuse

actually icon had presented plainly as it is....without any biased conclusion based on recent trailing earnings.

Humans/investors can become so blind...so biased looking at the rear mirror.

Posted by probability > 2018-04-08 17:07 | Report Abuse

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.

.....................................................



Posted by Icon8818 > Apr 7, 2018 07:00 PM | Report Abuse

Gross Profit for 2017 was 1430M

Take out inventory Gain of 400M in 2017, Gross Profit becomes:
= 1030M


Consider Inventory loss of at least 100M, Gross Profit becomes:
= 930M

Consider Fixed cost of 150M per qtr x 4 qtrs per year:
= 600M


PBT for 2018 without any shutdown & upgrade
= 330 M

PAT for 2018 without any shutdown & upgrade
= 250M

EPS for whole year 2018 = 83 cents (considering the same exceptional refining margin in 2017 - Hurricane Harvey)

Do you know it only takes 2 USD/brl refining margin reduction to wipe out 160M profit in 2018.

If you consider that, the PBT becomes, 170M and PAT becomes 130M.

That is an EPS of 43 cents without any funny assumptions going forward.


43 cents per annum means 10 cents per qtr.

This means HY was generous to give a 2 cents dividend with a payout of 20%!!

Posted by probability > 2018-04-08 17:16 | Report Abuse

Compared to Q4 2017 average spread , Q1 2018 is at least 2 USD/brl lower.

I am really really blind not to discover this implications much earlier.

I think we get hypnotized looking at the historical earnings and cant think clearly....

unbelievable

Posted by tibetmonk > 2018-04-10 00:27 | Report Abuse

compare to david_tan report, this one looks like something coming out from kinder garden.