Posted by ongkkh > 2018-04-19 06:45 | Report Abuse

Then why they invest in this business?

Posted by stockraider > 2018-04-19 17:30 | Report Abuse

REMEMBER IF OIL REFINERY IS A LOUSY BUSINESS...OIL RETAILING & MKT BUSINESS COULD NOT BE GOOD LOH....!!

Is an oil refinery a good business to own for the long term? - investbullbear


Is a refinery a good business to own for the long term?

1. In the oil refining business, the cost of inputs
(crude oil) and the price of outputs (refined products) are
both highly volatile, influenced by global, regional, and local
supply and demand changes. Refineries must find the sweet
spot against a backdrop of changing environmental regulation,
changing demand patterns and increased global competition
among refiners in order to be profitable.
YES...BUT OIL REFINERY IS JUST A PROCESSING BUSINESS...IT JUST A COST PLUS BASIS...WHATEVER VOLATILITY CAN BE PASS ON THEY JUST NEED TO BE EFFICIENT MAH...!!

2. Oil refining is a capital-intensive business. Planning, designing,
permitting and building a new medium-sized refinery is a 5-7 year process,and costs $7-10 billion, not counting acquiring the land. The cost varies depending on the location (which determines land and construction costs† ),the type of crude to be processed and the range of outputs (both of the latter affect the configuration and complexity of the refinery), the size of the plant and local environmental regulations.
THATS WHY COST OF PUTTING UP A NEW REFINERY IS VERY EXPENSIVE COSTING RM 7B TO RM 10B FOR A MEDIUM REFINERT IS VERY EXPENSIVE, THE EXISTING PROFITABLE REFINERY COSTING LESS THAN RM 3 BILLION AT PE 3X TO 6X IS HIGHLY VALUABLE AND PROFITABLE MAH...!!

Posted by stockraider > 2018-04-19 17:31 | Report Abuse

3. After the refinery is built, it is expensive to operate. Fixed
costs include personnel, maintenance, insurance, administration
and depreciation. Variable costs include crude feedstock,
chemicals and additives, catalysts, maintenance, utilities and
purchased energy (such as natural gas and electricity). To be
economically viable, the refinery must keep operating costs
such as energy, labour and maintenance to a minimum.
WHAT BUSINESS DOES NOT DEPENDS ON ALL THESE VARIABLES LEH ??
A FLOUR MILLS, PALM PLANTATIONS, ALUMINUM SMELTERS, STEEL MILLS ALL DEPEND ON THESE COMMON VARIABLES CANNOT RUN FROM NORMAL BUSINESS MAH......!!
A REFINERY HAS A SPECIAL ADVANTAGE...AS IT IS A HIGH VOLUME...ESSENTIAL CONSUMER PRODUCTS WHERE ITS DEMAND IS FAIRLY CONSISTENT LOH...!!

4. Like most other commodity processors (such as food, lumber and
metals), oil refiners are price takers: in setting their individual
prices, they adapt to market prices.
MOST BUSINESS IS A PRICE TAKER LOH...BUT REMEMBER THIS LOH...HENGYUAN NEEDS RM 700M TO UPGRADES TO CONTINUE BUSINESS FOR THE NEXT 25 YRS WHEREAS PETRONAS PENGERANG PLAN TO SPEND RM 64 BILLION AND PETRON PLAN TO SPEND RM 14 BILLION.
HENGYUAN IS THE MOST COST EFFICIENT AND EFFECTIVE REFINERY LOH...!!
REMEMBER THE PRODUCTION CAPACITY OF HENGYUAN IS 125K BPD COSTING RM 2.6 BILLION V PETRONAS REFINERY RM 64 BILLION WITH ONLY 300K BPD LOH..!!
IS NO WHERE PETRONAS PENGERANG CAN COMPETE WITH HENGYUAN BCOS 1 BARREL OF PETRONAS REFINERY WILL COST RM 58 PER BARREL JUST DEPRECIATION ALONE LOH....!!

Posted by stockraider > 2018-04-19 17:31 |

Post removed.Why?

Posted by qqq3 > 2018-04-19 17:33 | Report Abuse

very clear and good article.

Posted by stockraider > 2018-04-19 17:34 | Report Abuse

Posted by stockraider > Apr 19, 2018 05:28 PM | Report Abuse X

Summary:

Refining is “low return, low growth,capital intensive, politically sensitive and environmentally uncertain.” A refinery will close
if it cannot sustain its profitability.
NOT TRUE LOH..THIS STATEMENT....BCOS FOR EXAMPLE HENGYUAN ROE EXCEED 20% IN 2015 AND 2016 AND EXCEED 50% IN 2017 LOH....!!
WHY SO GOOD LEH FOR HENGYUAN ??
BCOS HENGYUAN IS THE MOST COST COMPETITIVE AND EFFICIENT REFINERY IN MSIA LOH.....!!

GENERALLY ANY EFFICIENT CO....NOT ONLY HENGYUAN....IF THEY ARE COST COMPETITIVE AND EFFICIENT....THEY WILL MAKE GREAT BUSINESS WITH HIGH ROE LIKE THE CASE OF HENGYUAN LOH.....!
USUALLY ROE EXCEEDING 10% CONSIDER REASONABLE RETURN LOH....!!

Posted by qqq3 > 2018-04-19 18:01 | Report Abuse

very clear and good article.

caveat...any industry also can trade...and can make or lose money.....


ps...any thing less than 6 months holdings can be considered a trade.


because refinery is such high risk, high capital....that is why it is normally a national project or huge oil giants.


China is the only country in the world with tea pot refineries like Hengyuan.......Chinese are undeterred gamblers.

Posted by stockraider > 2018-04-19 18:11 |

Post removed.Why?

Posted by stockraider > 2018-04-19 18:13 |

Post removed.Why?

Posted by stockraider > 2018-04-19 18:14 |

Post removed.Why?

Posted by stockraider > 2018-04-19 18:15 | Report Abuse

ALWAYS REMEMBER HENGYUAN CAN MAKE EXTRA GOOD MONIES FROM PRICE GAP OF BRENT V WTI OF MORE THAN USD 5 PER BARREL LOH...!!

THIS ADVANTAGE ADD TO THE CRACK SPREAD MAH.....!!

Posted by dragonslayer > Apr 19, 2018 10:28 AM | Report Abuse

Aiyo...update sikit buttspread news...apr price...USD6.65...May also very close USD7....mati lor..if continue like this..June also very close USD7 soon lor...ini macam 3 moths from Apr - Jun...very low buttspread lor...how to make profit with such low Buttspread...mau jaga jaga lor....dun aim to high Q2 eps lor...Q1 slightly better...but not as good as Q4 Buttspread....so...I can use common sense to day lah...QR result...Q4 better than Q1...Q1 better than Q2....then ..Q2 better than Q3 due to upgrading shutdown...Q3 worst than Q4....aiyoyo...like this common sense cah ah....I dunno lah...last time all use Buttspread mah...so..I learnt oredy...I try to apply thia year...see a betul or not....orang cakap mah...after learnt lesson...must practice lah....so...I practise it now...see all the past sifu sifu teaching can apply or not...aiyoyo...kikiki

Posted by stockraider > 2018-04-19 18:16 | Report Abuse

Posted by stockraider > Apr 19, 2018 10:37 AM | Report Abuse X

price sudah naik mah.....!!

yesterday rm 8.20 today how much leh ??

last 3wks rm 6.30 , today how much leh ??

Hengyuan Always can make monies one mah.....!!

Posted by dragonslayer > Apr 19, 2018 10:34 AM | Report Abuse

Aiyo chicken monk...you have been sharing...but ha...price dun go up leh...I Thnik your sharing is not true lah..that's why price dun go up lah.....wakakaka....kikiki


stockraider
7470 posts
Posted by stockraider > Apr 19, 2018 10:45 AM | Report Abuse X

down buy mah.....!!

Up promote loh.....!!

If i busy buy when down how to promote leh ??

Bodohloh, this dragon loh.....!!

Posted by dragonslayer > Apr 19, 2018 10:42 AM | Report Abuse

Aiyo chiscken monk...from my past observation...price up oredy you keluar promote...then price go down...you hiding in the your cave...up again ..you come out promote again....wei....rewnd your dvd lah...se ada betul kah.....why missing for 2 days...aiyoyo...kikiki