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...!!
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....!!
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.....!!
Aiyo qqq3.....which eye you see Tech Spec sapot Chicken Monk...aiyoyo...dunno Tech Spec well kah...no wonder lah...cari gaduh only...dunno how to read one..one is Penkritik leader...one is promoter leader...how to sapot each other...you think friendly match kah...boxing ada friendly match kah...haiyah.....aiyoyo...kikiki ===================
probability went kuku already.....no reading is possible.
Refinery is not a business that you buy and hold for 5 or 10 or 15 years. It is a cyclical business. Catch it when the timing is right, let go when it hits your target. Repeat in the future. It will always come and go.
If you want to buy super long term counters, please look into utilities, banks etc
WHEN THE ROE IS SUSTAINABLE HIGH LIKE IN THE CASE OF 2015, 2016, 2017 LOH.....!! ALSO THE 2018, ROE OF HENGYUAN IS EXPECTED SUSTAINABILITY HIGH EXCEEDING 40% IN 2018 LOH.....!! THIS GIVE U THE EARNING POWER LOH....!!
WHEN THE PE IS EXCEPTIONALLY LOW LOH....!! HENGYUAN PE IS ONLY 3X COMPARE WITH NESTLE AND PETDAG OF 50X AND 20X LOH.....!! WARREN BUFFET REFINERY PHILLIP 66 PE 22X MAH....!!
Refinery is not a business that you buy and hold for 5 or 10 or 15 years. It is a cyclical business. Catch it when the timing is right, let go when it hits your target. Repeat in the future. It will always come and go.
If you want to buy super long term counters, please look into utilities, banks etc
>>>John_Lee Refinery is not a business that you buy and hold for 5 or 10 or 15 years. It is a cyclical business. Catch it when the timing is right, let go when it hits your target. Repeat in the future. It will always come and go.
If you want to buy super long term counters, please look into utilities, banks etc 19/04/2018 17:30<<<<
Yes, for intelligent speculators.
Don't be dumb dumb hold like stupid speculator raider.
>>>> WHEN THE PE IS EXCEPTIONALLY LOW LOH....!! HENGYUAN PE IS ONLY 3X COMPARE WITH NESTLE AND PETDAG OF 50X AND 20X LOH.....!! WARREN BUFFET REFINERY PHILLIP 66 PE 22X MAH....!! <<<<
Dishonest raider still having problems with his valuations.
Post a Comment
People who like this
New Topic
You should check in on some of those fields below.
Title
Category
Comment
Confirmation
Click Confirm to delete this Forum Thread and all the associated comments.
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....
rojakmee
1,171 posts
Posted by rojakmee > 2018-04-19 15:32 | Report Abuse
I dont have any Hengyuan but once a while I come to read the comments
so funny
Posted by vivoviva > Apr 19, 2018 03:27 PM | Report Abuse
niama ekram. north and south dont know how to differentiate? ur mum and dad u know how to differentiate or not?