Posted by stockraider > 2022-09-10 10:47 | Report Abuse

Both Gasoline & diesel future price came down, thats why the future crack spread for Mogas 92 is so low mah!

Lu tau boh ?

Posted by probability > 29 seconds ago | Report Abuse

Why Gasoline margin came down but its not so easy for Diesel?
............................................................

EU refinery are 90% simple type, asians like HY are mainly complex type

for simplicity they product yields are as per below:

keyword note - this output ratio cannot be altered

Simple refinery:

Posted by probability > 2022-09-10 10:48 | Report Abuse

yea..who knows charlest is now working for IB..great potential actually!

Posted by CharlesT > Sep 10, 2022 10:47 AM | Report Abuse

Posted by probability > 18 seconds ago | Report Abuse

Why Gasoline margin came down but its not so easy for Diesel?

I wish finally all the big boys like Fund Managers will read n understand n fully agree with yr 24 hours non stop kind sharings here n push HY to PE 30 like tech stocks

Posted by probability > 2022-09-10 10:48 | Report Abuse

i have no hope on raider..even ah fah stopped listening to him

Posted by CharlesT > 2022-09-10 10:52 | Report Abuse

Despite Sifu Probability selflessly shares his Q profit projections here 24 hours a day 7 days a week for the past few months

All IBs are blind ah?

Posted by CharlesT > 2022-09-10 10:53 | Report Abuse

Why IBs never buy cheap PE1+ HY io they buy PE 30+ tech stocks...

Posted by stockraider > 2022-09-10 10:55 | Report Abuse

One more thing...people need to take note loh...!!

Even if Nymex....has high future Gasoline & Diesel Price...it does not translate to high margin for hengyuan mah, bcos the govt do not use USA & Europe nymex future price for gasoline & diesel....in fixing the selling price of the refinery mah!

The Govt use Crude oil price, exchange rate and MOGAS 92 crack spread to fix the refinery fix selling price mah!

Do not let Probability spin U loh!

Posted by probability > 2022-09-10 10:56 | Report Abuse

perhaps are not that knowledgeable on refinery industry

they have the same opinion of experienced charlest which does not want to change..

its a chronic phobia as i had mentioned earlier

Posted by CharlesT > 2022-09-10 10:59 | Report Abuse

Posted by probability > 2 minutes ago | Report Abuse

perhaps are not that knowledgeable on refinery industry

Maybe...... so far I think Probability is No1 in this field...

I wouldnt surprise at all if FC or Trading Manager of HY is also quietly learning fm his sharings here

Posted by CharlesT > 2022-09-10 11:00 | Report Abuse

they might have the same opinion of experienced charlest which does not want to change..

its a chronic phobia as Probability had mentioned earlier

Posted by probability > 2022-09-10 11:01 | Report Abuse

i wish so...nobody loses by a stock going up...at least not many stocks delivering such great EPS at the moment

Posted by probability > 2022-09-10 11:02 | Report Abuse

if i can overcome charlest..IBs are peanuts to crack

Posted by CharlesT > Sep 10, 2022 11:00 AM | Report Abuse

they might have the same opinion of experienced charlest which does not want to change..

its a chronic phobia as Probability had mentioned earlier

Posted by CharlesT > 2022-09-10 11:03 | Report Abuse

If I were HR Manager of HY I will certainly come to headhunt Probability for Senior Trading Director

I need a favour from all of you HY shareholders here, please help me to send all Probability's Q profit projections in I3investor.com.

Email address : HRCPD-Corporate-Affairs@hrc.com.my

Posted by CharlesT > 2022-09-10 11:03 | Report Abuse

See.....could be happy ending eventually

Posted by probability > 2022-09-10 11:04 | Report Abuse

profit projection to the same company that delivered it? no need lah

they know very well....already started giving dividend mah

Posted by stockraider > 2022-09-10 11:04 | Report Abuse

Thus what is the relevant of the nymex high future Gasoline & Diesel Price leh?

It is for those who theoritically want to make money from hedging by buying....crude oil nymex future & hedge the position by selling the future price of gasoline & diesel in nymex loh!

As i says....although on paper ....this look attractive....but it is not always....end up profitable loh!

The REASONS why ?

2.Virtual Refinery Business model thru pure hedging & derivative loh!
Do u notice that Hengyuan lose alot of monies consistently most of the time despite, mathematical computation on paper the derivative & hedge is highly profitable as per feedback of SSLEE and Probability leh ?

This is bcos the paper computation derivative & hedge shows profit do not reflect the reality situation & business dynamics of the trade loh! Reasons are as follows loh:

The Virtual Refinery Purchase its future crude by purchasing from NYMEX & compute it sells on Nymex sell price of Petrol & Diesel which showed a good profit when doing its hedge but how come this trade fail & registered big losses at the end leh ?

1. The mkt is very dynamic loh! On paper u may see big virtual profit by hedging future crude purchase & future sell of petrol & diesel end products....but when time come for settlement in turnout to be a loss loh!
Why leh the complete hedge trade of buying & selling here cannot convert to a easy profit, like paper indicated leh ?
a. This is bcos the movement of future crude purchase price, do not completely correlate to the selling future price of petrol & diesel price due to huge mkt volatility mah! Just within a day the business dynamic may change loh! Like within 1 day the Crude Price go up 10% whereas the Petrol & Diesel selling future price did not move at all or vice versa loh!
b. The trade initiated are pure paper swap with no delivery of physical goods, thats why it may not reflect the real dynamic of a real physical refinery mah!
c. Even it involve actual delivery of the commodities, there are extra cost & logistic to bring this commodities for processing to convert it to a profit mah!
d. Thus the virtual refinery of Hengyuan business model has shown consistent losses bcos of this challenges discussed above loh!

Posted by CharlesT > 2022-09-10 11:05 | Report Abuse

With Probability in the Co, HY can make good hedging profit for a long long time...share prices may touch PE 30 eventually

No more margin call for Probability no more sleepless nights

Posted by CharlesT > 2022-09-10 11:06 | Report Abuse

Posted by probability > 1 minute ago | Report Abuse

profit projection to the same company that delivered it? no need lah

they know very well....already started giving dividend mah

Ya ya a very good Div of RM0.10....even witrh Q2 EPS Rm2.20...

but its a 100% improvement fm 2017 of Rm0.05 ya ya ya

Posted by probability > 2022-09-10 11:06 | Report Abuse

hedging is not done from thin air...its all there visible to hedge from the futures market

they wont need my help

Posted by CharlesT > Sep 10, 2022 11:05 AM | Report Abuse

With Probability in the Co, HY can make good hedging profit for a long long time...share prices may touch PE 30 eventually

No more margin call for Probability no more sleepless nights

Posted by CharlesT > 2022-09-10 11:07 | Report Abuse

Its too humble of u.....

Posted by CharlesT > 2022-09-10 11:07 | Report Abuse

It's a great loss to the co if they dont see yr talent in profit projections

Posted by probability > 2022-09-10 11:08 | Report Abuse

i never wanted to dividend actually..like i sais this is not the time

but despite that they gave...not knowing that these will not be appreciated by charlest..sad:(

Posted by CharlesT > 2022-09-10 11:09 | Report Abuse

U see we can always discuss under a very friendly manner....no need to curse this curse that pokxi lah jump fm a tall building lah

We are civilised.....

Posted by probability > 2022-09-10 11:10 | Report Abuse

perhaps they indeed already secured the hedging in futures for reasonable notional amount...for next 2 years

thats why they dare to give dividend..who knows...lets see

Posted by CharlesT > 2022-09-10 11:10 | Report Abuse

Posted by probability > 43 seconds ago | Report Abuse

i never wanted to dividend actually..like i sais this is not the time

but despite that they gave...not knowing that these will not be appreciated by charlest..sad:(

Where got...I cheers for u guys.....even I m not a shareholder of HY

Ya ya a very good Div of RM0.10....even witrh Q2 EPS Rm2.20...

but its a 100% improvement fm 2017 of Rm0.05 ya ya ya

Posted by stockraider > 2022-09-10 11:10 | Report Abuse

Thats why Raider split the business of Hengyuan into 2 parts loh!

1. Physical Refinery....where u deal with the physical products like crude & petroleum products like physical gasoline & diesel.

2. Virtual Refinery....that deal with virtual business....like speculative derivative & hedging business mah!

Usually hedges....u match with all the derivatives in order to try to make....swap trading profit loh!

Posted by CharlesT > 2022-09-10 11:11 | Report Abuse

Posted by probability > 7 seconds ago | Report Abuse

perhaps they indeed already secured the hedging in futures for reasonable notional amount...for next 2 years

thats why they dare to give dividend..who knows...lets see

Maybe more than 2 years leh...5 years? Or even longer? I dont know how long they can hedge lah....as long as possible

Posted by probability > 2022-09-10 11:15 | Report Abuse

FYI, hedging done fir next 2 years does not mean they had the full throughput

If you divide the notional amount of refining margin swap with the hedged margin, you get the quantity of the barrels hedged

currently they had hedged 20% of their sales throughput for the next 1.5 years...

Posted by CharlesT > 2022-09-10 11:16 | Report Abuse

currently they had hedged 20% of their sales throughput for the next 1.5 years.

So by hedging well on this 20% of their sales can guarantee EPS RM2 for 1.5 years ah?

Posted by probability > 2022-09-10 11:17 | Report Abuse

hedging done by HY is on the margin itself - ie they hedge to feed crude and refined products at the same time..thus securing the margin whichever direction the price of commodity goes in the future

Posted by CharlesT > 2022-09-10 11:18 | Report Abuse

So can make EPS RM2+ in many Qs to come loh...another 6 to 8 Q also no problem loh

Cipai horser liao HY

Posted by CharlesT > 2022-09-10 11:19 | Report Abuse

Hokkien.....not bad words lah

Posted by Sslee > 2022-09-10 11:20 | Report Abuse

The only reason I invested in Petronm is Petronm stand for Petron Malaysia Refining & Marketing Bhd. [(Refining + Marketing (petrol stations)] a smaller scale of (HRC + Petdag).

So how should you value Petronm?

Posted by stockraider > 2022-09-10 11:22 | Report Abuse

Do not get kon loh!

Remember even if there is any hedging gain due to the hedge will be use to covered more than Rm 1.3b hengyuan unrealized hedging losses mah!

Thus with current physical low crack spread MOGAS 92.....the low margin will unlikely to translate into any good operating profit for hengyuan in q3 loh!

Posted by CharlesT > 2022-09-10 11:22 | Report Abuse

Posted by Sslee > 57 seconds ago | Report Abuse

The only reason I invested in Petronm is Petronm stand for Petron Malaysia Refining & Marketing Bhd. [(Refining + Marketing (petrol stations)] a smaller scale of (HRC + Petdag).

So how should you value Petronm?

Petronm is much more straight fwd lah..they shares their profit by giving good div consistently over the years

Less exposure to casino kind of hedging activities i guess

Posted by probability > 2022-09-10 11:22 | Report Abuse

@sslee, with the current paranoia and phobia of market with refinery..i think petronm price will shoot up if they only list their retails section in Bursa! LOL...

Posted by Sslee > Sep 10, 2022 11:20 AM | Report Abuse

The only reason I invested in Petronm is Petronm stand for Petron Malaysia Refining & Marketing Bhd. [(Refining + Marketing (petrol stations)] a smaller scale of (HRC + Petdag).

So how should you value Petronm?

Posted by stockraider > 2022-09-10 11:28 | Report Abuse

Remember i have mentioned....the Net Present Value of Petron at DCF 8% pa for 12 years is Rm 11.00 per share.

Thus the Petrol station should worth Rm 6.00 & the refinery is Rm 5.00 loh!

The Petrol station command higher valuation for its more stability in earnings just like Prtdag mah!

Posted by CharlesT > 2022-09-10 11:29 | Report Abuse

Grossly over hedging or under hedging is like big or small.....casino type

Having said so, Robert Kuok did speculate a lot in sugar commodity biz during his early years n made lots of money

He sustains very well till now

Posted by Sslee > 2022-09-10 11:30 | Report Abuse

I remember reading CFO of plantation company get the boot because he overhedged and hedged the wrong way on currency.

Posted by CharlesT > 2022-09-10 11:31 | Report Abuse

Posted by probability > 1 minute ago | Report Abuse

yes...charlest is slowly opening up..


I open up or not doesnt matter at all

Most importantly is HY Boss will open up n headhunt u for their Senior Trading Director...n becomes another legend liek Robert Kuok....

U should seriously consider to rename yrself as Robert...at least a small start towards Robert Kuok's path

Posted by Sslee > 2022-09-10 11:32 | Report Abuse

And of cause the boss can only boot out the CFO and not the son

Posted by stockraider > 2022-09-10 11:35 | Report Abuse

I ask whether Robert Kuok sustain its profit from operating its sugar business or making money by speculation in sugar future leh ???

Remember Tony fenandez.....make alot of money by buying aircraft for airasia instead of making money from operating airasia airlines loh!

In the end airasia...bankrupt & need restructuring bcos it over leverage on speculative buying in too many aircrafts much more than its reqn loh!

Posted by CharlesT > 2022-09-10 11:39 | Report Abuse

Posted by stockraider > 1 minute ago | Report Abuse

I ask whether Robert Kuok sustain its profit from operating its sugar business or making money by speculation in sugar future leh ???

This kind of windfall profits may only happens few times in one's life time....U think I can have Glove Theme 2020 every year meh....

U must know how to keep yr wealth... Sifu OTB always buy property fm his profit made fm stock mkt in the past 10 years

He knows the stock mkt/speculative biz well

Posted by stockraider > 2022-09-10 11:41 | Report Abuse

Comimg back to Sifu SSLEE refinery business.........u can hedge by buying the cpo raw material from the future...but u cannot....sell palmoil olein....in the future mkt loh!

U can sell the future olein base on the fix price negotiated by individual buyers....usually secured using letter of credit mah!

Thus it is not so easy to forward sell too big bulk of olein palmoil at a future fixed price mah!

Posted by CharlesT > 2022-09-10 11:42 | Report Abuse

not everyday also Sunday one

I only wish Glove Theme 2020 type could happen once again in my remaining years

Cukup....I m not as greedy as Probability who wanted to see EPS RM2.00+ for every Q of HY....or at least in another 6 to 8 Qs

Posted by CharlesT > 2022-09-10 11:48 | Report Abuse

Email address : HRCPD-Corporate-Affairs@hrc.com.my

Lastly, wasting time to talk cock here day n night also useless...nothing will happen eventually

Move the first step,somebody pls forward Probability's profit projections to HY's HR.....

I believe with Probability's brilliant brain, he shall make their hedging gain sustainable in many years to come....

A Robert Kuok 2.0 is finally born in I3...

Posted by Sslee > 2022-09-10 11:49 | Report Abuse

CharleT
Probability is trying to tell you HRC should be another Glove Theme 2020. HRC theme 2023, so seize the opportunity.

Posted by stockraider > 2022-09-10 11:59 | Report Abuse

Hengyuan already has a negative unrealized culmulative Rm 1.3 billion on derivative losses on hedging mah!

On sustainability Thus alot of catching up, need to be done in the next 2 qtr bcos way behind loh!

Posted by CharlesT > 2022-09-10 12:01 | Report Abuse

Email address : HRCPD-Corporate-Affairs@hrc.com.my

This small gesture of u may make big things to happen n dreams come true

Instead of posting yr profit projections 24 hours a day 7 days a week here since the past 2 to 3 months.....

Anything happens?

Price drops fm Rm7 to Rm4+ ah??

Do u happy with this outcomet?

Posted by CharlesT > 2022-09-10 12:02 | Report Abuse

If not then better think out of the box

Posted by probability > 2022-09-10 12:03 | Report Abuse

Truth cannot be suppressed very long, the earlier one investigates and verify what is the truth the more upper hand one will have

the longer one waits the higher the odds are for others to find out ahead of you..

....

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 hedging is done with the intention of going LONG (the higher the future price, the higher the gain)

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

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

The Cash Flow Hedge (CFH) in OCI shows the hedging gain / loss for the hedged position which are closed, but the corresponding physical market transaction (change in ownership of the goods) is yet to take place to deliver the available market gross profit which is then offset by this hedging gain / loss on CFH to give the P&L exactly as it has been hedged initially.

The Cost of Hedging Reserve (COHR) on the other hand shows the hedging gain / loss for all the balance hedged position (yet to be closed) from the notional amount (refining margin swap contract RMSC), where the corresponding physical market transaction will take place within the maturity period (next 24 months) assuming the hedging positions are closed as per current spot rate.

As such, COHR is a highly hypothetical figure that changes significantly as per the market spot price of the commodity (mark-to-market) when the financial reporting period is closed.

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

Now that the refined oil products price (gasoline) had significantly retreated from the peak of 30th June, if it remains the same till end of Sept, Q3 will report huge gain on OCI

If prices of refined products relative to crude (the crack spread) are back to Q1 22, 30th Mar level, cost of hedging reserve shall be exactly back to the figure reported in Q1 22 results for Q3 22.