This has close to zero impact on the long term economics of the business.
There is however, one very key risk. Which applies to the petrol retail industry of malaysia, including petdag etc. And this is my main worry. If not for the very cheap valuation, i would not be as keen.
Try studying the economics of the petroleum retailing business globally, and then go and read up on the recent disposal of the petroleum retail arm by Husky Energy in the US.
Then you'll know what i mean.
===== johnbrooks Vincent, refinery margin in asia weakest since 7 years. Oversupply and demand slowdown from china mainly. Not sure if malaysia refinery same thing or not.
Choivo, why do you say the refinery margin is not important? Shouldn't it be the most important thing for the company's profit? I mean the refinery margin is what determine the gross profit margin right?
The way u say it, u think that the profit won't be affected even if the refinery margins go down. I'm not saying the retail business is not important but the biggest weight to the company profit should still be the refinery profit.
I can't answer your question properly, as i like this company at this price very much for myself and my investors.
Its not in my interest to potentially increase my purchase cost by explaining to others on a public forum. Its already up 5% this year, and it had just cost me an additional few thousand this year when i buy more.
However, i wrote something on the economics of refinery business.
I believe the above two articles, as well as a brief study on husky energy and other petrol retailing or refinery companies around the world, will provide you an answer.
Email me once you've finished your research. We can talk further then.
===== johnbrooks Choivo, why do you say the refinery margin is not important? Shouldn't it be the most important thing for the company's profit? I mean the refinery margin is what determine the gross profit margin right?
The way u say it, u think that the profit won't be affected even if the refinery margins go down. I'm not saying the retail business is not important but the biggest weight to the company profit should still be the refinery profit. 13/01/2019 15:11
Choivo - I went through your analysis of Hengyuan - pretty remarkable in your derivation of "real refinery earnings" - I think I'm a relative guru in finance but I humbly say that I've learnt something from you - TQVM
Emotion have a weird way of complicating things, most people, including those who will be long term net buyers in the future, take comfort in seeing stock prices advance.
These people resemble a car driver who rejoices after the price of petrol increases, simply because his tank contains a week's supply.
Bro. This is called chance. No political (among other kinds) uncertainty, where got chance to buy cheap.
====== Posted by sheldon > Jan 15, 2019 07:40 PM | Report Abuse
A main factor holding down our market (including Petron) is political uncertainties on especially succession - useless bums!
The EPS increased significantly by 118% in last five years, the PE ratio at quite low level of 5, the ROE at 20% and dividend yield at 3.82, worth to investigate further.
As readers would know that ever since I posted my buy recommendation on Carimin, it has shot through the sky like an unstoppable rocket. Many of my followers have asked me what is my target price. Yesterday Carimin shot up 11.5 sen from 60 sen, 19 percent in 1day with 22.3 million shares changed hands. This huge volume shows that many well-informed institutional investors are buying so aggressively. Many of my followers asked me what is my target price. Just based on its 1 quarter eps 5 sen X 4 q equal 20 sen. Conservatively my target price is Rm 2, selling at PE 10. I can imagine those smart investors can easily foresee that it can easily earn 20 sen per year. By the end of February when it's 2nd quarter profit is announced, investors can easily foresee its future and chase to buy up to 1.95 which is my immediate target price. I am obliged to inform you that Carimin is my major investment and I do not need you to buy to support the price because there are many institutional buyers. That is why the daily volume exceed 20 million shares and the price continues to move higher and higher.
Parttimer - results about to be released. I'm hoping & I think that there's a general consensus that there'll be no earnings surprises a dividend of about 25 sen
Sure Jon, we all have placed values on this one. Let's hope all of us win by selling close to our values. Well main thing is we make decent out of this one. Haha. Someone is playing with our emotions, up they sell, down they buy. These raokors, taikors..haha
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....
Undilah_DAP
415 posts
Posted by Undilah_DAP > 2019-01-11 15:50 | Report Abuse
Ron95 tomorrow down?