Posted by King_trader_shadow > 2022-09-05 02:46 | Report Abuse

Beautifully explained, now it make sense. I miss out the point on the European refiners yield is more on fuel rather than diesel and HY will benefits from this.

Appreciate your explanation at this late night!

Posted by King_trader_shadow > 2022-09-05 02:47 | Report Abuse

One more question, why i can't find the hedging losses done in Q1 not bring forward to Q2? or it is already accumulated as in the box (i hope you get what i'm trying to say)

Posted by King_trader_shadow > 2022-09-05 02:48 | Report Abuse

One more question, why i can't find the hedging losses done in Q1 not bring forward to Q2? or it is already accumulated as in the box (i hope you get what i'm trying to say) in the page 2 of 17.

Posted by probability > 2022-09-05 02:54 | Report Abuse

there are two type of hedging losses, the one on page 8 is already accounted on PAT

the one in the box under Other comprehensive income, are treated under IFRS9

Posted by King_trader_shadow > 2022-09-05 03:06 | Report Abuse

The one at page 8 referring to A10(PBT) --> The derivative losses written here is 438.8mil where as the 2nd page derivative loss is 1.07bil.

I think they didn't accumulate the Q1 hedges yet. Besides that, they didn't have a comprehensive calculation from the box of page 2 to the acuumulation to the Fair value loss on derivative financial insturments.

Posted by King_trader_shadow > 2022-09-05 03:11 | Report Abuse

Furthermore PBT amount should be summarize well but it left hanging without final calculation!

Posted by Sslee > 2022-09-05 06:19 | Report Abuse

@King_trader_shadow
Q2 financial report:
For Q2 2022, the RM897.257M profits before tax already included the realised derivaties loss matured on April, May and June of RM 438,758,000.

For H1 2022, the RM 982,535,000 profit before tax already included the realised derivaties loss matured on Jan, Feb, March, April, May and June of RM 870,964,000.

Hence if HRC do not do the hedging the profit before tax should be RM 870,964,000 + RM 982,535,000. On volume of about 21 million barrel
Or profit before tax of about USD 20 per barrel.

the 2nd page derivative loss is 1.07bil: This one refer to marked to market on 30/06/22 unrealised derivatives loss.

These unrealised derivatives maturity date are from July, Aug, Sept, Oct, Nov, Dec and into year 2023.

In Q3 those mature on July, Aug, Sep will be reported as Fair value gain/loss on derivative financial instruments.

Any derivatives loss/gain will be off set by physical better/poorer gross profit due to higher/lower realised refining margin for the Q3 period.

Hope above will help you to understamd the realised and marked to market unrealised Fair value gain/loss on derivative financial instruments.

Posted by Sslee > 2022-09-05 07:53 | Report Abuse

the 2nd page derivative loss is 1.07bil
Correction.
The 1.07B may not be exactly but mostly cause by unrealised hedging loss.

You need to ask an auditor to explain how this 1.07b was computed

Posted by ValueInvestor888 > 2022-09-05 10:15 | Report Abuse

@sslee, saw your good working on profit projection of Hengyuan. Can share your projection for Petron in next quarter earning? Thanks

Posted by AzlanIshtiqal > 2022-09-05 10:21 | Report Abuse

Permintaan O&G akan meningkat terutamanya musim sejuk menjelang penghujung tahun

https://www.aljazeera.com/economy/2022/9/2/russias-gazprom-keeps-gas-pipeline-to-germany-turned-off

Posted by Sslee > 2022-09-05 12:47 | Report Abuse

Wait until Petron Corp (parent company of petronm) release the Q3 result then I can work from the PAT attributable to non controlling interest to get the Petronm Q3 PAT.

As of HRC since HRC already hedged the refining margin forward for many months till end of year and beyound hence HRC PBT H2 should be at least same as H1.

But Petronm did not hedged their refining margin so much, everything will still depend on what will be refining margin ( petrol, diesel and jet fuel) crack spread moving forward.

Posted by searchingmoney > 2022-09-05 14:48 | Report Abuse

manyak positive analysis tapi harga saham tara mau naik...

Posted by King_trader_shadow > 2022-09-05 16:02 | Report Abuse

Sslee, one word for your character, you are indeed an meticulous person. Appreciate your explanation. I love the way you corrected my words and add value to the discussion.

Probability, thanks to you as well,. :)

Posted by Jerichomy > 2022-09-05 20:47 |

Post removed.Why?

Posted by Jerichomy > 2022-09-05 20:50 | Report Abuse

You can tanya ST GORENG

Posted by tehka > 2022-09-05 21:42 | Report Abuse

Quantum Commodity Intelligence – Middle East crude prices Monday was cautiously higher after Russia’s closure of the Nord Stream 1 pipeline helped underpin global energy prices, while diesel cracks spiked, tracking European swaps higher.

Gasoline cracks jumped a dollar and are now near a one-week high as the market corrected from negative territory and the backwardation firmed significantly.

Diesel paper cracks jumped with Q4 at $41/b, up $3/b from Friday

www.qcintel.com/article/asia-oil-products-crude-price-higher-diesel-cracks-jump-8259.html

Posted by Jerichomy > 2022-09-06 08:54 |

Post removed.Why?

Posted by miracle_trader > 2022-09-06 10:08 | Report Abuse

petron very good fundamental, yearly got dividend , keep long term

Posted by AzlanIshtiqal > 2022-09-06 10:31 | Report Abuse

Permintaan akan meningkat dan harga minyak akan mencecah USD 100 lagi

Posted by King_trader_shadow > 2022-09-06 13:52 | Report Abuse

Very sad to see our market always follow US stock market. Generally, the news should had drive this stock but remain stagnant till US market buka!

The most expensive lesson after 7 years. Normally, i don't follow much but after seeing the market closed at US side, most of the exchange would trade at the sideway or low volume.!

Posted by investor77 > 2022-09-06 23:30 | Report Abuse

Very sad to see Heng Yuan forum hijacked to condemn one another, using expletives, and mentioning an experienced Remiscier deserves to die. Talk about Oil price, facts and figures of past results, and not to wallop each other with bad words. Admin do take action.

Posted by sheldon > 2022-09-07 10:06 | Report Abuse

Heng Yuan should take precaution. Make sure that the chairs are bolted to the floor or else it would bring back memories of MICA AGM

Posted by The St. Goreng > 2022-09-07 10:33 | Report Abuse

Price now 4.74. way lower than +21% gain on 23 Aug.
If it's not "pump" and dump means what?

Fellow sifu pls come out and explain

Posted by AzlanIshtiqal > 2022-09-07 11:15 | Report Abuse

Tunggu malam ni punya laporan inventori minyak dari US...

Posted by miracle_trader > 2022-09-07 11:16 | Report Abuse

europe in big trouble, US market gonna hit new low. think petron will be drag back down to rm4

Posted by lee77 > 2022-09-07 16:51 | Report Abuse

HY i3 forum look like pasar malam...

Posted by cactus81 > 2022-09-07 18:10 | Report Abuse

Can HY and Petronm be taken privately?

Posted by AzlanIshtiqal > 2022-09-08 10:02 | Report Abuse

Laporan US inventori minyak telah ditangguhkan dan ia keluar malam ini, bukan semalam...Sangka laporan itu akan keluar setiap minggu pada hari Rabu

Posted by Jerichomy > 2022-09-08 18:50 |

Post removed.Why?

Posted by Sslee > 2022-09-08 19:04 | Report Abuse

My explanation as below:
Stock: [HENGYUAN]: HENGYUAN REFINING CO BHD
Sep 8, 2022 9:43 AM | Report Abuse

“In the short run, the market is a voting machine but in the long run, it is a weighing machine.”
The market has spoken:

You have my respect if you advice based on TA you should sell your HRC and wait for break through signal to buy back again.

But if you are using fear, misinformation, deceived and unethical means to induce people to vote for you in selling their HRC just because you hate someone or for you/your syndicate to buy low then sell high again. I can only hope your conscious is clear and sleep well.

Posted by Jerichomy > 2022-09-08 21:02 | Report Abuse

Go go sharemarket21

sharemarket21
It's 4.50 and not 14.50. Some street public remarks have saved many innocents who care to read and follow blindly. You had your chance but roasted. No point keep harping when coming to wet forum telling how good and intelligent we are in the stock market when share price will determine your investment compentency ultimately. At this moment, the stock performance is disastrous. Acknowledge and find way to escape or sleep in it for a long time. Gloves and steel sectors memories are still fresh. Those who gave sky TP should be whacked to the max even though it doesn't carries weight in this low end room.
47 minutes ago
6 minutes ago

Posted by CharlesT > 2022-09-09 08:38 | Report Abuse

Sslee
My explanation as below:
Stock: [HENGYUAN]: HENGYUAN REFINING CO BHD
Sep 8, 2022 9:43 AM | Report Abuse

“In the short run, the market is a voting machine but in the long run, it is a weighing machine.”
The market has spoken:

Yes, but not applicable on cyclical stocks like HY n Petronm....unless the high crack spread becomes a new normal n will stay there for a long long time


But if you are using fear, misinformation, deceived and unethical means to induce people to vote for you in selling their HRC just because you hate someone or for you/your syndicate to buy low then sell high again. I can only hope your conscious is clear and sleep well.

To me, another version of story sounds like this:

But if you are using greeds, misinformation (lengthy n complicated calculations/profit projections), deceived and unethical means to induce people to vote for you in buying HRC just because you have hefty position in HY (could be using margin as well) and u want someone to buy and push up the prices for you to sell high or escape. I can only hope your conscious is clear and sleep well.

The question here is their profit sustainable (so are the high crack spreads)?



Remember the oil palm plantation party not too long ago??

Posted by Sslee > 2022-09-09 08:42 | Report Abuse

CharlesT,
No one know what will happen tomorrow but if ukarine war go on for years then crack spread should maintain because once Russia cut off the gas supply the alternative for gas is diesel.

By the way you can monitor for your self the daily crack spread: So any misinformation and deceived from me?

Each barrel of crude oil is refine breakdown into 3 major component product, with largest component is diesel, second is RON gasoline and lastly refine jet fuel

1. Gasoil/diesel crack spread chart (historical highest level range)
https://www.tradingview.com/symbols/NYMEX-GOC1%21/

2. Gasoline/petrol RON 92 crack spread spread chart (normalize level range)
https://www.tradingview.com/symbols/NYMEX-D1N1%21/

3. Kerosene/ jet fuel crack spread (at historical highest range level)
https://www.tradingview.com/symbols/NYMEX-ASD2!/

Posted by CharlesT > 2022-09-09 08:43 | Report Abuse

Sslee

CharlesT,
No one know what will happen tomorrow but if ukarine war go on for years then crack spread should maintain because once Russia cut off the gad supply the alternative for gas is diesel.

No one expect the war to last forever so are the high crack spreads.....ops except those who r holding HY n Petronm

It reminded me of those glove co investors who expected Covid 19 to stay forever

Posted by CharlesT > 2022-09-09 08:44 | Report Abuse

Even now it seems Covid 19 may stay for a long while but what happens to the ASP?

Posted by CharlesT > 2022-09-09 08:45 | Report Abuse

The key word is Sustainability

Unless u can go to Casino and make money every time for a long long time...

Posted by CharlesT > 2022-09-09 08:48 | Report Abuse

What happens to the CPO price?

It takes 5 to 6 years to see the fruits....

Posted by CharlesT > 2022-09-09 08:49 | Report Abuse

Again u guys will say crack spreads will not be the same like glove's ASP, CPO Price or whatever.....

Posted by CharlesT > 2022-09-09 08:49 | Report Abuse

Eventually it will be the same....

Posted by CharlesT > 2022-09-09 08:57 | Report Abuse

I3 is very toxic ,full of retaxds n conman

Posted by Sslee > 2022-09-09 08:59 | Report Abuse

What is sustainability? Did you see anything that can sustain to infinity?

I am just using my logic of supply and demand equilibrium to say current high refining margin is due to demand is more than refinery supply and it take 5 years to put up a new refinery.

The coming boycott of Russia oil and refined products will make the supply even tighten.

Posted by CharlesT > 2022-09-09 09:00 | Report Abuse

Buy more loh

Posted by CharlesT > 2022-09-09 09:01 | Report Abuse

Hope u have the chance to recover yr losses in stock mkt eventually

Posted by Sslee > 2022-09-09 09:05 | Report Abuse

I will,
Thanks CharelesT,
Wish you good luck too.

Posted by probability > 2022-09-09 09:17 | Report Abuse

HEDGE ACCOUNTING & how it is reported on OTHER COMPREHENSIVE INCOME (OCI)

https://www.youtube.com/watch?v=w5P_M9fWqGg

The above simple example for ORANGES can be viewed as CRUDE OIL for HY where the hedge is going LONG (i.e, the higher the future price, the higher the hedging gain)

For refined products hedge, it is about going SHORT, the higher the future price, the greater the hedging loss.

The net effect of both above is what reported by HY under their OCI.

Posted by probability > 2022-09-09 09:18 | Report Abuse

Cash flow hedge (CFH) are simply ineffective (loss/gain) hedge portions of the RMSC which has been liquidated (settled) as of 30th June and awaiting respective physical market transaction to take place to offset these hedging losses.

Only when physical sales & purchase of the commodity takes place it can be reflected on P&L statement.

Reference:

'When does Cash Flows Hedge Reserves (under OCI) gets transferred to P&L?'

https://www.youtube.com/watch?v=arCSncmfB8k

Posted by probability > 2022-09-09 09:19 | Report Abuse

What is refining margin Hedging?
.............................

In order to mitigate their exposure to crack spread price volatility, many refiners hedge the crack spread by purchasing crude oil futures or swaps and simultaneously selling refined products futures or swaps as the results allows the refiner to lock-in or fix the refining margin.

https://www.mercatusenergy.com/blog/bid/72741/an-introduction-to-crack-spread-hedging#:~:text=In%20order%20to%20mitigate%20their,or%20fix%20the%20refining%20margin

Posted by probability > 2022-09-09 09:19 | Report Abuse

2021 annual report page 132
............................

Cash flow hedge reserve and cost of hedging reserve:

The cash flow hedge reserve is used to record gains and losses on derivatives that are designated and qualify as cash flow hedges and that are recognised in other comprehensive income. Amounts are reclassified to profit or loss when the associated hedged transaction affects profit or loss.

The cost of hedging is seen as cost of achieving the risk mitigation inherent in the hedge. It is incurred to protect the Company against unfavourable changes in price. The changes in the cost of hedging is initially recognised in other comprehensive income and removed from equity and recognised in profit or loss in the same period that the hedged cash flows affect profit or loss.

Posted by Rabbit2 > 2022-09-09 09:57 | Report Abuse

Have to admit that both HRC and Petron are cyclical stocks. Just that how long the record quarterly profit could sustain. Everyone have different view.
..

Posted by tehka > 2022-09-09 09:58 | Report Abuse

Petron is solid rebound from trendline support of higher lows yesterday. Will it form morning star pattern today and shoot to the moon