Posted by Sslee > 2022-06-09 14:52 | Report Abuse

Do anyone notice if not for other losses of RM 552 million in FY2021 HRC should had make a profit near to the FY 2017 level.

Posted by Sslee > 2022-06-09 14:58 | Report Abuse

qqq3,
What I know for sure is gross profit directly depend on the crack spread/refining margin.

Posted by Sslee > 2022-06-09 15:03 | Report Abuse

And since per quarter HRC refining volume is more than 10 million barrels hence every 1 USD crack spread/rening margin increase will bring in addition USD 10 million gross profit.

Posted by hng33 > 2022-06-09 15:06 | Report Abuse

Many try to do prospective next Q profit for hengyuan. Can you use same formula calculation to arrive same figure as posted by hengyuan Q1 profit RM 47m to verifying?

Posted by hng33 > 2022-06-09 15:15 | Report Abuse

Since all data available including past crack spread, historical crude oil etc, kindly use these restropective result to verfying your calculation formula for next prospective result, if you able to arrive same figure for past result, then your formula calculation is tested worth, otherwise, worthless

Posted by param1 > 2022-06-09 16:20 | Report Abuse

MANY JUMPED TO PET I WILL HOLD ON TO HENG I BELIVE.....IN THE INEVITABLE

Posted by nicholas99 > 2022-06-09 16:21 | Report Abuse

too much uncertainty.. shark dont like goreng.

Posted by Sslee > 2022-06-09 16:26 | Report Abuse

As long as Western world sanction of Russia oil and fuel export the high fuel price is here to stay.

Posted by nicholas99 > 2022-06-09 16:29 | Report Abuse

i am shock malaysia don't import russian oil. see india.. import so much. and American import russian oil too.. pity us.. don't allow us to import cheap oil. don't know why also.

Posted by Primeinvestor > 2022-06-09 16:38 | Report Abuse

limited buyer, all see kyy and otb everyone just run to petron

Posted by hengpetron > 2022-06-09 16:54 | Report Abuse

Even war is over sanction is still on as Ukraine Is destory.Sanction is can last 10-20years

Posted by hengpetron > 2022-06-09 16:58 | Report Abuse

Russia will pay for thier crime. All building gone. Russia will not get back to normal.

Posted by hengpetron > 2022-06-09 16:58 | Report Abuse

High oil price is here to stay 10-20 year.

Posted by nicholas99 > 2022-06-09 17:00 | Report Abuse

lol. ukraine you mean? since they are bombing at ukraine.

Posted by stockwin > 2022-06-09 17:00 | Report Abuse

hng33
Many try to do prospective next Q profit for hengyuan. Can you use same formula calculation to arrive same figure as posted by hengyuan Q1 profit RM 47m to verifying?
======================================================================

AS OTB has done an estimate for Q2 2022 results,perhaps he is able to do it?

Posted by OTB > 2022-06-09 17:04 | Report Abuse

@Johnzhang,
You are very good in your research, please advise and comment on my posting.
Some of above information are taken from your notes.
I want to know your view.
Thank you.

Posted by hengpetron > 2022-06-09 17:14 | Report Abuse

Ukraine destory is not media can closed one eyes
Sanction will last for many year. Loss of life in hundred of thousand

Posted by hengpetron > 2022-06-09 17:15 | Report Abuse

High oil price to stay

Posted by TraderAlways > 2022-06-09 17:51 | Report Abuse

Petron already breakout twice. Hy still going down. Think today is the last day seeing 6.20. Well settle in level 5 as soon as possible.

Posted by MoneyMakers > 2022-06-09 17:57 | Report Abuse

Dont be naive..global politics at play..just need russ/ukr peace deal & media can spin - war settled both sides..lift sanction everyone benefits

Weekend news - “President Biden said at some point along the line there's going to have to be a negotiated settlement here in Ukraine.”

Posted by bsinvestor > 2022-06-09 18:20 | Report Abuse

may i know what is overseas refineries? i don't mind to buy US stock as well.

qqq3333 Overseas refineries up, our refineries down
09/06/2022 6:18 PM

Posted by abc333 > 2022-06-09 18:59 | Report Abuse

hengyuan hedge USD 26 , one month later , if crack spread hit USD 33.

Hengyuan loss USD 7. But hengyuan make profit USD 33 from physical market
33- 7 =26 = Hengyuan profit.

If crack spread down to USD 20
Hengyuan gains 26-20 = USD 6 from hedging
and still make USD 20 from physical market. total profit is 26

hedging is a tools to reduce risk and lock in profit. hengyuan already lock in millions profit since April. EPS 1.2 just a piece of cake. do not trust anybody here, do your own research.

Posted by Sslee > 2022-06-09 19:58 | Report Abuse

Your crack spread hedge is only true if the crude oil remain stable.
Example if crude is USD 120 and after one month later crude drop to USD 90 and crack spread hit USD 33.
Then your products selling price one m9nth later is USD (90+33)=USD 123 .
In total
Crude stock loss USD 30.
Crack spread physical gain USD 33.
Crack spread derivative gain/(loss) USD (26-33)= USD (7)
Your gross profit/( loss) is USD (4)

Posted by valueguru > 2022-06-09 20:00 | Report Abuse

Goodbye gasoline cars? EU lawmakers vote to ban new sales from 2035. New refinery anyone?

https://www.cnbc.com/2022/06/09/goodbye-gasoline-cars-eu-lawmakers-vote-to-ban-new-sales-from-2035.html

Posted by johnny cash > 2022-06-09 20:04 | Report Abuse

HENGYUAN COMPANY IS ALWAYS SLEEPING WHENEVER CALL THEM THEY WON T PICK UP PHONE

Posted by johnny cash > 2022-06-09 20:05 | Report Abuse

ANYBODY HERE HAS DIRECT CONTACT NO OF HY IR OFFICER HIS DIRECT NO??

Posted by johnny cash > 2022-06-09 20:06 | Report Abuse

THE COMPANY IN PD NOT PICKING UP PHONE AT ALL.. ARE THEY HAVING FEAR OF ANYTHING

Posted by Jerichomy > 2022-06-09 20:14 | Report Abuse

Covid in china rises again

Posted by Sslee > 2022-06-09 20:14 | Report Abuse

You can check the US listed refining and marketing stock performance
MPC: Marathon Petroleum Corporation
VLO : Valero Energy Corporation
PSX: Phillips 66
DINO: HF Sinclair Corporation

Posted by Jerichomy > 2022-06-09 21:16 |

Post removed.Why?

Posted by MoneyMakers > 2022-06-09 21:33 | Report Abuse

Dont compare Fortune100 company with chinaman company aiyoyo

Posted by Jerichomy > 2022-06-09 21:35 |

Post removed.Why?

Posted by Johnzhang > 2022-06-09 21:39 | Report Abuse

Dear OTB,
Sorry for responding late as I have an outing today.
I hold the opinion that the basis of your calculation is generally realistic.
GP based on avg crack spread @USD20.84/bbl , sales vol of 10.6 mil bbl and Xtare 4.4 is indeed RM972 mil.
Total cost of manufacturing, adm, depr, finance = RM100 mil/qtr (on 2021 average)
Estimated Refining margin swap contract loss = RM103 mil
PBT = 972-100-103 = RM769 mil
Tax @ 33% = 254mil (1st Q PBT of RM85mil almost reach the $100 mil threshold)
NPAT = RM769 - 254 = RM515 mil or EPS RM1.72

However, I think HY's hedging is more complex. They are 4 different types of derivative instruments they use. Here, we are only looking at one ie refining margin swap contracts. The potential derivative losses from the other 3 types derivatives contracts are difficult to assess as public are not privy to their hedging policy and status. The potential losses from other derivatives can be substantial amount if HY's lack of prudence.
I suspect NPAT for Q2 in the worst case will not be lower than RM300 mil



----------------------------
OTB posted :
I take the crack spread margin of March, April and May 2022 as the crack spread margin for Q2 2022.
Refined margin calculation required a month lead time, hence the crack spread of June 2022 will be reflected in Q3 2022.
The average crack spread margin for Q2 2022 is USD 20.85.
Assume 25% of revenue in Q2 2022 (stated in Q1 2022 report) are hedged at USD12.00 (stated in FY2021 annual report).

Gross profit of Hengyuan
Sales volume for Q2 2022 = 10.6 million barrel
Average crack spread for Q2 2022 = USD 20.85
1 USD = RM 4.4
Gross profit = 10.6*USD 20.85*RM 4.40 = RM972.4 million

In this case what is the refined margin derivatives loss in Q2 2022 ?
25% of revenue is sold at USD12.00.
10.6*25%*USD8.85*RM4.40 = 103.2 million

Is this 103.2 million as refined margin derivatives loss a real physical loss ?
The answer is no because 103.2 million is captured in the total sales volume of 10.6 million barrels in the earlier calculation which I use USD20.85 to calculate the gross profit.
This 103.2 million as refined margin derivatives loss is just an opportunity loss if the management of Hengyuan did not hedge 25% of the revenue to sell them at USD12.00.

You will be frightened to note that the gross profit of RM972.4 million in Q2 2022.
After deducting manufacturing cost, admin cost, depreciation and finance cost, refined margin derivatives loss and income tax, the PAT is around 600 million.
Number of shares issued = 300 million.
Estimated EPS is about 2.00.

Tell me which stock listed in KLSE can give you EPS around 2.00 per quarter.
This stock is called Hengyuan.

Posted by Johnzhang > 2022-06-09 21:50 | Report Abuse

Hi Probability,
Are you sure ? As far as I know, the figures in the note of account for inventories write down or gain entails all event including inventory mark to market .
How do you explain the RM132 mil inventory write down in Q1 2022 ? For off spec too ?
-------------------------
FYI John
realized where u took this numbers
these are inventory write down (similar to offspec) not stockholding gain/loss..

Posted by Silemak > 2022-06-09 21:54 | Report Abuse

War end /oil collapse??? Russia surrender crimea, eastern Ukraine and everything back to pre war???
And Russia allowed to export oil and gas as pre war???
You must be dreaming!!!

Posted by brian3381 > 2022-06-09 22:04 |

Post removed.Why?

Posted by MoneyMakers > 2022-06-09 22:16 | Report Abuse

Have 2 understand geopolitics

World cannot afford expensive oil..sure russia oil will be back on market

Wait&see lo what happen when announce victory Donbas liberation (soon)

Posted by Johnzhang > 2022-06-09 22:22 | Report Abuse

@OTB,
I just want to point out the following historical data with respect to PBT vis-a vis Crack spread:
FY2016 PBT $335m crack 8.04
FY2017 PBT $974m crack 10.34
FY2018 PBT ($24)m crack 5.82
FY2019 PBT $147m crack 4.90
FY2020 PBT $256m crack 1.44
FY2021 PBT $128m crack 7.78
------------------------------------
6-yrs avg PBT $303m crack 6.39
----------------------------------------
Q12022 PBT $85 crack 13.53

Over 6 yrs of financial data, it is still very difficult to clearly define the link of profitability to crack spread. There is something in-between that we outsider truly can not understand ie the impact of Derivatives !
Hope someone out there can shed some light.

Posted by bsinvestor > 2022-06-09 22:42 | Report Abuse

all of them very nice. are we all wasting time in bursa? haha

Sslee You can check the US listed refining and marketing stock performance
MPC: Marathon Petroleum Corporation
VLO : Valero Energy Corporation
PSX: Phillips 66
DINO: HF Sinclair Corporation
09/06/2022 8:14 PM

Posted by DickyMe3 > 2022-06-09 22:47 | Report Abuse

Yes. Time & Money

Posted by brian3381 > 2022-06-09 22:49 |

Post removed.Why?

Posted by OTB > 2022-06-09 23:14 | Report Abuse

Johnzhang,
Thank you for your feedback.
FYI, the income tax for FY 2021 has windfall tax at 33%.
FY 2022 is taxed at 24% only.
I will stop posting for a while, I have found out all the stuffs that I want.
Thank you.

Posted by DickyMe3 > 2022-06-09 23:23 |

Post removed.Why?

Posted by OTB > 2022-06-09 23:34 |

Post removed.Why?

Posted by probability > 2022-06-09 23:44 | Report Abuse

Hi John, it does not fall into 'stockholding' loss

this appears likely to be related to russian oil that was paid but unable to utilize

you can see historically under the category you mentioned (8 qtrs for 2020 & 2021) it does not have any big positive values (gain)

no way 8 qtrs it does not show big stockholding gains . In Q4 21' the performance review did mention stockholding gains contributed to their good profit (they are definitely not talking about 1 million gain here)



Posted by Johnzhang > Jun 9, 2022 9:50 PM | Report Abuse

Hi Probability,
Are you sure ? As far as I know, the figures in the note of account for inventories write down or gain entails all event including inventory mark to market .
How do you explain the RM132 mil inventory write down in Q1 2022 ? For off spec too ?
-------------------------
FYI John
realized where u took this numbers
these are inventory write down (similar to offspec) not stockholding gain/loss..

Posted by bullmarket1628 > 2022-06-10 07:14 | Report Abuse

Petronas ups annual capex to RM60 bil, makes first allocation for clean energy
SyafiqahSalim/theedgemarkets.com
June 09, 2022 16:20 pm +08

https://www.theedgemarkets.com/article/petronas-plans-rm60b-capex-2022-says-group-cfo

KUALA LUMPUR (June 9): Petroliam Nasional Bhd (Petronas) is allocating about RM60 billion for capital expenditure (capex) in financial year ending Dec 31, 2022 (FY22) compared with RM30.5 billion a year earlier as the Malaysian national oil company prepares for the resumption of business activities, which were earlier disrupted by Covid-19-driven movement restrictions, and as the group sets aside money for clean energy or non-hydrocarbon-related ventures.
"This year, we expect to almost double that [capex] amount which is RM60 billion, because of catch-up and the return of [business] activities. This is also the time we have to make inroads in some material steps into the non-hydrocarbon side of things," Petronas chief financial officer Liza Mustapha said on Thursday (June 9) at the MIDF Conversations event, which was held virtually.
MIDF group managing director Datuk Charon Mokhzani was the moderator for the event.
Liza said that out of Petronas' planned RM60 billion capex allocation for FY22, about RM40 billion has been earmarked for the oil and gas business besides non-hydrocarbon–related operations while the balance of the capex allocation has been earmarked to finance Petronas Chemicals Group Bhd's (PetChem) wholly-owned subsidiary Petronas Chemicals International B.V. (PCIBV) proposed acquisition of the entire stake in Sweden-based specialty chemicals group Perstorp Holding AB for €1.54 billion (about RM7.02 billion) from Financiere Foret S.A.R.L.
Petronas owns a 64.35% stake in PetChem, according to PetChem's latest annual report.
Looking ahead, Liza said non-hydrocarbon-related income is expected to account for about 30% of Petronas' revenue.
"[About] 30% of our revenue should be coming from something which is not related to hydrocarbons.
"We have to factor in [business] growth, otherwise, we will not be able to manage the energy transition and we will miss our target of achieving [net] zero [carbon] emissions by 2050," she said.
According to her, about 10% of Petronas' RM60 billion capex allocation for FY22 will be earmarked for non-traditional businesses such as specialty chemicals and solar energy.
"Previously, I think there was never a plan on what rate it should be [for the clean energy segment] because there was no allocation from the top. So, it didn't really take off.
"So, we need to rethink our decision on the capital allocation [for the clean energy segment] and put it aside, because if we leave it at that and let them go with the flow, we are going to be a year behind the target again," she said.
Petronas' financials improved in 1QFY22. In a statement on May 31, 2022, Petronas said profit after tax rose to RM23.44 billion in 1QFY22 from RM9.22 billion a year earlier while revenue climbed to RM78.75 billion from RM52.55 billion.
"Despite favourable [first quarter] performance, the high oil and gas prices are expected to remain vulnerable with increased volatility due to geopolitical and macro-economic uncertainties.
"Petronas will continue to strengthen our operational excellence to maximise value creation whilst intensifying our growth and sustainability agenda in Malaysia and internationally,” the company said.

Edited By: Chong Jin Hun

Posted by Sslee > 2022-06-10 07:26 | Report Abuse

D1N1!
SINGAPORE MOGAS 92 UNLEADED (PLATTS) BRENT CRACK SPREAD FUTURES (CONTINUOUS: CURRENT CONTRACT IN FRONT)NYMEX
30.607
D
USD
+1.784
(+6.19%)
MARKET OPEN
28.823
PREV
30.607
OPEN

Mogas92 crack spread up 6.19% to USD 30.607, so place your bet HRC and Petronm up or down?

Posted by brian3381 > 2022-06-10 07:50 |

Post removed.Why?

Posted by brian3381 > 2022-06-10 07:52 |

Post removed.Why?

Posted by Sslee > 2022-06-10 07:54 | Report Abuse

Prosperity tax was tabled last year for Budget 2022 thus I think it should be for taxable income above RM100 million for year 2022.