Posted by johnny cash > 2022-06-12 10:19 | Report Abuse

https://klse.i3investor.com/web/blog/detail/2017/2022-06-11-story-h1624320379-HENGYUAN_derivatives_loss_on_Q1_22_completely_clarification

Posted by botakpang2 > 2022-06-12 10:20 | Report Abuse

Posted by MoneyMakers > 10 hours ago | Report Abuse

John/probability discussion confusing b’coz both not making any sense

Soo nonsense until both dont understand other person question/answer kikiki

Just ignore those 2

Yes. Like chicken n duck talk. Just copy n paste article from other source. Hey, primary student oso can do tat.

Posted by johnny cash > 2022-06-12 10:21 | Report Abuse

https://klse.i3investor.com/web/blog/detail/2017/2022-06-11-story-h1624320379-HENGYUAN_derivatives_loss_on_Q1_22_completely_clarification

Posted by johnny cash > 2022-06-12 10:22 | Report Abuse

https://klse.i3investor.com/web/blog/detail/2017/2022-06-11-story-h1624320379-HENGYUAN_derivatives_loss_on_Q1_22_completely_clarification

Posted by Johnzhang > 2022-06-12 10:22 | Report Abuse

No my style to quarrel. But these clown botakpang2 and moneymakers have been hauling personal attacks and utter nonsense and lies nonstop. They have gone overboard will get the humiliation well deserved.

Posted by botakpang2 > 2022-06-12 10:22 | Report Abuse

Keep copy n paste rubish article for wat?

Posted by botakpang2 > 2022-06-12 10:24 | Report Abuse

Posted by Investmalaysiaa > 33 minutes ago | Report Abuse

Still quarrel in the forum. Just like gloves two years back. You guys know what will happen la kikiki

Aiyo, dun said gloves. Nanti ppl wil said u idddiot compare refineries with gloves. Just let them sink deeper into indian ocean

Posted by botakpang2 > 2022-06-12 10:27 |

Post removed.Why?

Posted by johnny cash > 2022-06-12 10:29 |

Post removed.Why?

Posted by Johnzhang > 2022-06-12 10:30 | Report Abuse

botakpang2, people will judge if you are telling lie .
Btw, has your mama changed your soiled pampers since last night?
You are really a clown to keep me entertained
Hehehe….

Posted by botakpang2 > 2022-06-12 10:30 |

Post removed.Why?

Posted by botakpang2 > 2022-06-12 10:31 | Report Abuse

I dun need ppl to judge. Beter jaga ur hy bloodbath

Posted by Johnzhang > 2022-06-12 10:38 | Report Abuse

Even if HY go down below $4 and I lose money that is non of your business. It not your money.
You better jaga you get enough milk and get your shit washed than to worry for others. Hehehe…

Posted by botakpang2 > 2022-06-12 10:40 |

Post removed.Why?

Posted by botakpang2 > 2022-06-12 10:40 |

Post removed.Why?

Posted by Johnzhang > 2022-06-12 10:47 | Report Abuse

You can keep the hell note for yourself because you need them soon. Hehehe…

Posted by Jerichomy > 2022-06-12 10:59 |

Post removed.Why?

Posted by botakpang2 > 2022-06-12 11:00 |

Post removed.Why?

Posted by botakpang2 > 2022-06-12 11:01 |

Post removed.Why?

Posted by MoneyMakers > 2022-06-12 11:33 | Report Abuse

Aiyoo botak/john grow up loo no need fight long2 over petty things annoy everyone

Here share info enough

Posted by investor2021trading > 2022-06-12 11:38 | Report Abuse

oh yeah, sanctions on Russian's oil n Russian's oil embargo will stayed for a very long time!

Posted by VTrade > 2022-06-12 11:41 | Report Abuse

Rm4? Recession ?
MoneyMaker, meaning next week market will ended in the ocean ?

Posted by Johnzhang > 2022-06-12 11:44 | Report Abuse

botakpang2, you are just so tiny that I can put you in my pocket. Go an ask your mama what is the meaning . hehehe....

Posted by Johnzhang > 2022-06-12 11:52 | Report Abuse

Moneymakers, I told you already you have mental issue repeating the same nonsense over and over again. This is clear sign of mental regression. Pls go to see a doctor fast!
Another advice to you is don't read too much horror ghost stories until you see ghost day and night.

Posted by MoneyMakers > 2022-06-12 11:54 | Report Abuse

Aiyaa nothing goes down in str8 line

Normal got people/syndicate average down to exit..will see rebound here there

But end result still same..back down to pre-goreng price rm4

Posted by harold8990 > 2022-06-12 11:56 | Report Abuse

https://www.theedgemarkets.com/article/bursa-expected-trade-downside-bias-coming-week

Posted by Johnzhang > 2022-06-12 12:02 | Report Abuse

To all other I3 members.
I apologize for some of the humiliating messages i posted. This is very unusual of me.
Those messages are simply for the benefits of the two clowns ,botakpang2 and moneymakers who don,t even have the slightest self respect and dignity.
Just skip those messages as you may chose.

Posted by MoneyMakers > 2022-06-12 12:19 | Report Abuse

Aiyoo john instead of asking others skip ur posts, better u stop posting nonsense lo..like children fight over small things

Here share info/opinion enough

P/s: inv2021 this is ‘public’ forum to exchange info/opinion..if u only want hear happy fairytale story, go join ‘private’ telegram group

Posted by VTrade > 2022-06-12 12:26 | Report Abuse

Usually private telegram is well control by satu leader
Penganut hanya terima saja ajaran dalam group.
Biasa comitee group dapat info untuk exit and willing beritahu semua penganut.

Posted by VTrade > 2022-06-12 12:29 | Report Abuse

Good info harold
All the while asean market is much supported tapi juga worry.
Sudah 7bar hitam lagi nak hitam ?
HY is low floating, esg pun 8
Opec wil jaga kawan oil dia

Why money maker nak pergi rm4?

Posted by VTrade > 2022-06-12 12:36 | Report Abuse

War tak akan end
Akan tambah saje
Citizen dah terima covid, war

Posted by MoneyMakers > 2022-06-12 12:47 | Report Abuse

HY was rm4 just 8weeks ago..goreng high expecting boombastic profit but Q1 didnt perform..worse than Q4’2021..no way can stay this high price

War will end soon..have 2 understand geopolitic @ world cannot afford expensive oil..western countries will try cut dependence on russia oil but surely will be allowed back into market to lower prices

P/s: should be worried HY low floating shares..few big sell orders (syndicate run) will alrdy see 15%++ bloodbath

Posted by VTrade > 2022-06-12 12:50 | Report Abuse

Botakpan only age60post
New born to talk and to learn.

Those expert sudden talk bad mayb been withdraw bullet earlier.
Mayb

Posted by Johnzhang > 2022-06-12 12:56 | Report Abuse

Hi Probability,
First of all , i truly respect your perseverance and effort in getting to the bottom of the hedging issue. Many, including myself , managed to pick up new knowledge which is useful in evaluating another investment opportunity in the future.

Your explanations and the general conclusions make good sense. I also suspect that Q2 and Q3 profit will be way higher than Q1 irrespective if hedging loss is higher , same or lower. The huge jump in crack spread in Q2 will take care of any hedging uncertainty.

I only have the following to highlight (again , a laymen perspective ) :
1. Your case study is base on 100% sales hedged 1 month forward on rolling basis . I like to think that management would hedged 2 or 3 months forward as management should be more concern of uncertainty in longer future.
2. You did not consider the discount in forward contract for crude and refined. a USD2-3/bbl discount for 1 month forward is very common.
3. You only look at the refining margin swaps in your case study. There are 3 other type of commodity hedges, namely Forward priced Commodity Contracts, Commodity Swap Contracts and Commodity options contract with considerable notional sum . I appear to me that these 3 other commodity hedges are independent of the refining margin swap and may have some impact to bottomlines.

In the nutshell, the purpose of hedging are 2 folds :
(a) to protect inventory losses from the effect of price falling before the sales materialized
For this, the hedging gain/loss will be offset by the higher/lower cost of sales.
(b) to lock in (protect) reasonably good margin of future months sales.
For this, company may suffer opportunity losses when crack spread trend higher and additional profit when crack spread trend down.
---------------------------------------
Probability posted :
Johnzhang, would love to know your comments on this article:
https://klse1.i3investor.com/blogs/2017/2022-06-11-story-h1624320379-

Posted by probability > 2022-06-12 13:06 | Report Abuse

@Johnzhang, happy to hear your comments..

I am 100% inline with your conclusion below:

In the nutshell, the purpose of hedging are 2 folds :
(a) to protect inventory losses from the effect of price falling before the sales materialized
For this, the hedging gain/loss will be offset by the higher/lower cost of sales.
(b) to lock in (protect) reasonably good margin of future months sales.
For this, company may suffer opportunity losses when crack spread trend higher and additional profit when crack spread trend down.

Posted by Johnzhang > 2022-06-12 13:06 | Report Abuse

Moneymakers, go to see a pyschiatrist for your mental illness and see a bomoh for the chasing away the ghost in you. Hehehehe...

Posted by MoneyMakers > 2022-06-12 13:11 | Report Abuse

Own money ownself decide what 2 do lo

Info shared here wont affect share price..just 4 i3 member decision-making

P/s: sorry john i dont entertain schoolboys

Posted by probability > 2022-06-12 13:35 | Report Abuse

On point 1 & 2, frankly i do not know the meaning and implication of hedging 1 or 2 month forward. If at current market the hedging pricing are attractive, why would one want to hedge say 2 months forward.


Perhaps there is interest charges for holding longer period.
Perhaps they can only close their hedging after the forward months they hedged ended.
Perhaps its based on certainty when they can match the same transaction in cash market clearing current obligation of sales & purchase to existing supplier & customers.

You may clarify on this.

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

In my basis, i simply assume that they can hedge as per current month spot rate which is attractive & effect the cash market transaction the following month as they have a steady customer and supplier base. i.e only 1 month lead time.

Further, they can be hedging weekly in smaller bundles of say 1/4 of the 3.5 million barrels ( say 0.9 million barrels) with expected closing in 4 weeks time parallel to the cash market transactions.

As such at any point in time, you can see the total refining margin swap contract value is 4 weeks value, i.e 3.5 million barrels as reported every quarter (referring to their refining margin swap contract value).

Every time, a batch of 0.9 million barrels expires, a new batch of 0.9 million barrel contract is entered. Thus, at any point in time its 4 batches of 3.5 million barrels contract still active.

Posted by probability > 2022-06-12 13:36 | Report Abuse

On point no.3. i agree i have not investigated on the other derivative option they have.

The only consolation on this uncertainty is that if the two variables (1) crude oil & (2) refined oil price stabilizes between Q 1 and Q2 and going forward, the derivative impact will be minimal too (positive or negative).

derivative loss / gain cannot simply be recurring if the price of the above two variables are unchanging

derivative can only thrive on changes


Posted by Johnzhang > Jun 12, 2022 12:56 PM

I only have the following to highlight (again , a laymen perspective ) :
1. Your case study is base on 100% sales hedged 1 month forward on rolling basis . I like to think that management would hedged 2 or 3 months forward as management should be more concern of uncertainty in longer future.
2. You did not consider the discount in forward contract for crude and refined. a USD2-3/bbl discount for 1 month forward is very common.
3. You only look at the refining margin swaps in your case study. There are 3 other type of commodity hedges, namely Forward priced Commodity Contracts, Commodity Swap Contracts and Commodity options contract with considerable notional sum . I appear to me that these 3 other commodity hedges are independent of the refining margin swap and may have some impact to bottomlines.

Posted by klee > 2022-06-12 13:45 | Report Abuse

Probability is extremely hard working.From my years of experience,i have yet to see any stock that can withstand a major correction on the dow.As the saying goes...when dow sneezes,the rest catch the cold.I wish you well.

Posted by botakpang2 > 2022-06-12 13:53 |

Post removed.Why?

Posted by botakpang2 > 2022-06-12 13:55 |

Post removed.Why?

Posted by Mini2021 > 2022-06-12 14:02 | Report Abuse

BREAKING NEWS: Mahsing going to take over TOPGLOVE and become world No 1 glove factory.........

Posted by probability > 2022-06-12 14:07 | Report Abuse

@klee, my efforts here obviously is not to predict or effect HY price movement next week. Its for me to be sure that my thesis is correct.

I certainly agree that tomorrow HY price will likely drop considering the market sentiment and the price trend of HY recently.


Posted by klee > Jun 12, 2022 1:45 PM | Report Abuse

Probability is extremely hard working.From my years of experience,i have yet to see any stock that can withstand a major correction on the dow.As the saying goes...when dow sneezes,the rest catch the cold.I wish you well.

Posted by probability > 2022-06-12 14:08 | Report Abuse

Sample business transaction of HY
................................

Say John you are the Shell retailers in Malaysia

Myself and my twin brother represent HY. I deal with CASH MARKET and my twin brother deals with FUTURES MARKET.

Our sales volumetric achievable in a month is 4.0 million barrels, 1.0 million barrels per week.

1) CASH MARKET transaction done by me;

I deliver refined oil to you exactly every Friday at 1 million barrels.
Every week at the same time Friday, i also buy crude oil from Petronas at the same volume 1.0 million barrels.

You pay me as per current market value of refined oil (spot price matching singapore hub crack spread) and i pay petronas as per the current brent spot price.


2) FUTURES MARKET transaction done by twin brother. You can view this exactly like stock market.


Every time i deliver 1 millon barrel to you, my brother will clear back 1 million barrels from the futures market buy selling back at current futures the 1 millon barrels he had gone LONG 4 weeks ago.

At the same time he will also clear 1 million barrels refined oil by buying back at current market the refined he had gone SHORT 4 weeks ago.


If my twin brother lost money in Futures market that he is forced to do (cover back his long and short positions) due to my cash market transaction in parallel, its derivative loss. If he had made money, then its a derivative gain.

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

You can see from above, when the cash market and futures market operate as per above mechanism, the margin HY will secure is always trailing by 4 weeks time as per hedging they had done on futures market.

Posted by Johnzhang > 2022-06-12 14:08 | Report Abuse

@Klee, with due respect, we are deliberating about the profitability of HY in present market environment. We are not dictating what's its share price tomorrow, a week later or a month later and we all very well understand that share price performance is affected by the broad market sentiment . When one is convinced of its earning prospect, it is then up to one when and how to buy in. Those are individual choice basing of the individual's perspective and risk appetite. There is no sure right or sure wrong. The end results matter.

Posted by klee > 2022-06-12 14:16 | Report Abuse

John,i wish you well too.

Posted by probability > 2022-06-12 14:17 | Report Abuse

while i am forced to deliver in small bundles of 1 million barrels to you, my twin brother actually has the flexibility to enter any size of hedging contract he wants based on his judgement on how attractive the margin is and its sustainability going forward

however, every time i deliver, my brother must close the position on the futures market by the same amount

if he increase the size of the contract too big, then the longer it will take for my cash market transaction to clear his hedging stakes

by looking HY refining margin swap contract of about USD 290 million, we can predict that it takes 1 month sales volume at cash market to clear this hedging

Posted by klee > 2022-06-12 14:21 | Report Abuse

Latest reports stated that war fatigue is building up both in ukraine n its allies ,the west n russia too.The situation is extremely fluid.Everything can change in a matter of days.Will russia make a deal with the west for a ceasefire?Will sanctions remain if a deal is made?Meanwhile the inflation fires rages on,n the fed is firing on all cylinders.

Posted by Want2MakeMoney > 2022-06-12 14:22 | Report Abuse

Q2 profit will be higher