Posted by OTB > 2022-08-12 15:35 |

Post removed.Why?

Posted by probability > 2022-08-12 16:15 | Report Abuse

Beauty of it is that, even at the record lowest values of all diesel gasoline and jet fuel crack in last 5 months, the refining margin will deliver close to a billion gross profit. Cannot imagine when russian refined oil is completely banned end of the year and Saudi increase crude oil out beginning September (Released from OPEC obligation to Russia)..

Posted by Jerichomy > 2022-08-12 16:19 |

Post removed.Why?

Posted by probability > 2022-08-12 16:19 | Report Abuse

Hope investors get the clear message that, as a refinery , HY need crude oil price to be low to sustain demand to an extent that the constraint becomes refining capacity instead of crude oil availability - only then crack will remain strong.

Posted by anthonytkh > 2022-08-12 16:29 | Report Abuse

So here’s what everyone here wants to know :

What caused the steep hike in April/May and what caused the steep decline until the price is now where it was before the start of the rise?

* you may choose to replace “what” with “who” in the above. I already alluded to this several times

Posted by anthonytkh > 2022-08-12 16:42 | Report Abuse

Probability, what are HRC’s historical earnings vis-a-vis share price performance?

Posted by Sslee > 2022-08-12 17:14 | Report Abuse

HRC earning peak at Q3 2017 Gross profit of about RM 428 million with PAT of RM 361 million and HRC price peak at RM 19.2 at Dec 29 2017.

By the way Q1 2022 gross profit is RM 508 million and I predict Q2 2022 gross profit should be RM 1 billion.

Posted by CharlesT > 2022-08-12 17:23 | Report Abuse

U really think they will push up the price for u to run after their sterling Q result is out?

Posted by CharlesT > 2022-08-12 17:29 | Report Abuse

Sifu n team n clients n followers should hold millions of shares above RM6+

Posted by Sslee > 2022-08-12 17:31 | Report Abuse

CharlesT,
I can only predict gross profit (based on public available data). If I can predict share price movement, I will be a billionaire by now.

Posted by Johnzhang > 2022-08-12 17:33 | Report Abuse

Hi Anthony,
it is an interesting view . Is it your suspicions that EPF and PNB May be the hands behind the recent event in HY or you are sure about it ?
It’s unthinkable that EPF/ PNB did it.

I certainly hold the view that syndicated group are responsible for the massive price up and down which can be achieved easily amid nervous market sentiment, poor liquidity of the stock and absence of institution or retail investors support.

EPF/PNB ownership in a stock may not always be the correct benchmark to judge the fundamentals of the stock. EPF/PNB has its own set of criteria and sometimes based on ‘ certain interest’ or national service objective. A few big flops recently include Serba dinamik , Sapura energy ,etc…


————————


Posted by anthonytkh > 5 hours ago | Report Abuse

John, back in 2015 EPF held over 16%. They’d been selling until they now hold just around 2.5%. In 2017, PNB held over 6%. They’d been selling until they now hold around 3.5%

Why did both sell until they are no longer substantial shareholders (ie. that usual “Notice of Person Ceasing” announcement)? Can be a few things… they took profit or they no longer believe in the company and their trades no longer need to be announced (since they’re no longer substantial shareholders)

As for the sharp rise and the subsequent sharp drop, re-read my post above, especially the part where EPF and PNB are no longer substantial shareholders. These two companies are smart operators

Posted by DickyMe10 > 2022-08-12 17:38 | Report Abuse

"Posted by Johnzhang > 2 minutes ago | Report Abuse

Hi Anthony,
it is an interesting view . Is it your suspicions that EPF and PNB May be the hands behind the recent event in HY or you are sure about it ?
It’s unthinkable that EPF/ PNB did it."

=======================
You must be naive or acting dum b.
Those entitiies are the real gamblers.

Posted by Sslee > 2022-08-12 17:43 | Report Abuse

The current downtrend start after Q1 result out in May. This is because Q1 PAT is a big suprised (very much lower than expectation) to everyone.

Posted by paktua73 > 2022-08-12 17:47 | Report Abuse

wow paktua also got mention here kaa??

tut tut
yes paktua backup OTB he still good guru..

Posted by paktua73 > 2022-08-12 17:47 | Report Abuse

wow paktua also got mention here kaa??

tut tut
yes paktua backup OTB he still good guru..

Posted by Sslee > 2022-08-12 17:51 | Report Abuse

Yes and not.
Recovered back and make good profit when Insas go up to RM1.20+ but I did not sold Insas so now overall my portfolio still negative. (Exclude the dividend that go straight to my wife controlled saving account)

Posted by anthonytkh > 2022-08-12 17:53 | Report Abuse

John, I already said who the smart operators are. Nothing in stock trading and investment is “unthinkable”. Look at our country as an example

My VIP contact rarely ever reply to my text the same day. When/if he does, it’s usually between 2-7 days later and the reply is very curt. But at least the contact replies

Posted by anthonytkh > 2022-08-12 17:54 | Report Abuse

Probability, history is super important. What will be redefined in the future for HRC, may I humbly ask?

Posted by probability > 2022-08-12 18:13 | Report Abuse

https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/oil/081122-oil-futures-prices-strengthen-after-iea-hikes-global-demand-growth
HIGHLIGHTS
Diesel cracks elevated on tight inventories

IEA cites gas-to-oil switching

Latin American diesel imports rise


European refiners are increasingly moving away from the higher-priced natural gas and using oil products for energy and hydrogen production, the IEA said. A number of oil companies, including Shell's Rotterdam and Rheinland refineries, BP European refiners, and Italy's Eni refiners, said in recent quarterly reports they are reducing the use of natural gas.

Refined products crack spreads had eased since mid-July as global refiners exited maintenance, boosting gasoline, diesel, and jet production. However, diesel crack spreads have rallied this week on continued supply tightness heading into winter.

The NYMEX front-month ULSD crack spread vs ICE Brent was trading around $46.30/b late Aug. 11, up from $36.09/b Aug. 8. The NYMEX front-month RBOB crack spread was trading around $18.63/b, up from $14.64/b Aug. 8.

US distillate stocks climbed 2.17 million barrels last week to 111.49 million barrels, US Energy Information Administration data showed Aug. 10, but while the deficit to the five-year average tightened slightly on the week, inventories were 24% below the five-year average.

And stocks on the US Atlantic Coast at 26.4 million barrels were 47% below the five-year average, supportive of the New York-delivered NYMEX ULSD contract.

Refiners should be increasing production as they exit maintenance and are lured by high margins.

According to S&P Global data, global CDU outages are expected to fall to 8.15 million b/d in August, trending down from 13.5 million b/d in April.

But outages are expected to climb to 11.3 million b/d in October. And Europe, which is heavily dependent on Russia for diesel fuel, is looking to secure supplies ahead of a ban on Russian barrels due to take effect in early 2023.

Posted by probability > 2022-08-12 18:14 | Report Abuse

https://www.qcintel.com/article/europe-oil-products-diesel-cracks-rise-as-iea-warns-of-gas-switching-7822.html

Posted by anthonytkh > 2022-08-12 18:25 | Report Abuse

Thanks probability. HRC is a profitable company with high and increasing debts together with high and increasing creditors and have poor leverage. I repeat what I posted before : Look at the borrowings and creditors increases for the 3 month period of Sept-Dec21 and Jan-Mar22

Their RM800M cannot help them much, this much is certain.

Their dividends payout is downtrending

They may get super normal profits for the last quarter. Not sure if they’ll get hit with super normal tax

Look, I’m not bad mouthing HRC; I only point out the facts that HRC themselves release to the public

Trade HRC, yes

Posted by probability > 2022-08-12 18:28 | Report Abuse

Noted Anthony. Thanks for all the warnings when price is low and earnings prospect is good. Let the future take care of the balance sheet...

Posted by Jerichomy > 2022-08-12 18:33 |

Post removed.Why?

Posted by probability > 2022-08-12 18:35 | Report Abuse

EV/EBITDA at current price is way more attractive than when Shandong Hengyuan bought over the refinery from Shell. What more at current future earnings prospect...with the already done capex for significant upgrade of the existing plant. They say with upgrade done - the FCC can continue operating maintenance free for another 20 years..

Posted by probability > 2022-08-12 18:37 | Report Abuse

They also mentioned efficiency of the plant will significantly improve with the H2 gas generation plant that should be completed by Q2 2022.

Posted by CharlesT > 2022-08-12 18:48 | Report Abuse

The ultimate goal of shares investing is to make money....using different methods or whatever method is useful n effective

Posted by kebling98 > 2022-08-12 19:39 | Report Abuse

First ,Strong dollar and high oil price is not good to hy,

Gross profit simply can be found by below calculations
Volume X (refined products price - crude oil prices ) X USD rate = 1000m at least

If Q2 hedging loss will about the same as Q1. PAT definitely not less than 500m.


Crack spreads might up to 16 at the time Qr is released couple with big hurricanes in Atlantic. Perfect storm will lift hy share price to what level
4.2 is a big frog jump at street. Hold tight, next week Share price can suddenly spike . Sky is the limit

Posted by Jerichomy > 2022-08-12 19:51 |

Post removed.Why?

Posted by sharemarket21 > 2022-08-12 20:48 | Report Abuse

Big boys trapped the overly greedy little men who tried to deceive the innocent child in public street room with little skills but consistent pump and dump news. If there is no money to be made, why bother frequent street room and every channels ? As long as there are some naive and careless traders or investors in mini market, only the prudence have a chance to make some good returns. Otherwise who will contribute to their profits and suffering deep paper loss silently ? Middle man or company owners ? When the volume depleted like oil gas, you are seeing the exact scenario here. Big and small in the same pot. Lesson to be learnt, don't miss the value and volume. Dozens of unverified positive news after and during the accumulation process but one fine line upon liquidation process and negative news flow. Still kudos to those who have cashed out 5 and 4.50. Clean and neat.

Posted by profit profits > 2022-08-12 21:58 | Report Abuse

thombstone

Posted by probability > 2022-08-12 23:30 | Report Abuse

DIESEL crack spread is again exploding on live data, you will likely see the crack spread figure on chart below exceeding 40 USD/brl by Monday:

https://www.tradingview.com/symbols/NYMEX-GZ1!/

HY produces 10.7m barrel of sales per QTR. Gross profit from Diesel alone at 46 % yield:

= 10.7 million barrel sales x ( 46/100 yield of diesel) x (37 USD/brl crack ) x ( 4.40 MYR/USD exch)
= 800 million MYR gross profit

........

Just monitor the above for HY, and make your valuation. You cant go wrong on above derivation of minimum gross profit as we are using its lowest crack value for last 5 months for Diesel and have not bring in other refined products contributions yet

Posted by Zhuge_Liang > 2022-08-12 23:46 |

Post removed.Why?

Posted by Zhuge_Liang > 2022-08-12 23:51 | Report Abuse

Posted by probability > 5 hours ago | Report Abuse

EV/EBITDA at current price is way more attractive than when Shandong Hengyuan bought over the refinery from Shell. What more at current future earnings prospect...with the already done capex for significant upgrade of the existing plant. They say with upgrade done - the FCC can continue operating maintenance free for another 20 years..
---------------
Posted by probability > 5 hours ago | Report Abuse

They also mentioned efficiency of the plant will significantly improve with the H2 gas generation plant that should be completed by Q2 2022.
-------------------
Hope that probability will prove to be better than KYY and ks55.
These 2 jokers had attacked Hengyuan until one cent also not worth.
Let us wait for final outcome soon.

Posted by Sslee > 2022-08-13 11:41 | Report Abuse

Counting down to Q2 2022 financial result to see who is right and who is wrong.

Posted by Jerichomy22 > 2022-08-13 14:41 |

Post removed.Why?

Posted by probability > 2022-08-13 15:03 | Report Abuse

Guys, as predicted crack spread had hit above 40 USD/brl

https://www.tradingview.com/symbols/NYMEX-GZ1!/

Posted by probability > 15 hours ago | Report Abuse

DIESEL crack spread is again exploding on live data, you will likely see the crack spread figure on chart below exceeding 40 USD/brl by Monday:

https://www.tradingview.com/symbols/NYMEX-GZ1!/

HY produces 10.7m barrel of sales per QTR. Gross profit from Diesel alone at 46 % yield:

= 10.7 million barrel sales x ( 46/100 yield of diesel) x (37 USD/brl crack ) x ( 4.40 MYR/USD exch)
= 800 million MYR gross profit

Posted by probability > 2022-08-13 15:10 | Report Abuse

If any of you doubt that HY could have increased its Diesel yield to 46% as it was for the previous year, you can assume its just 39% and add Jet Fuel at 7% which has relatively similar crack spread. As such the above simple derivation will likely hold true as a 'bottom low possible gross profit' for conservative estimates.

Posted by stockwin > 2022-08-13 15:20 | Report Abuse

As we are only 2 weeks away before end of August, we can safely say that Q3 explosive result is in the bag now.
So we are staring at Q2 and Q3 2022 eps of at least RM1 per quarter. Logically that should be the case.

Posted by probability > 2022-08-13 15:21 | Report Abuse

spot on, thanks
Posted by stockwin > 17 seconds ago | Report Abuse

As we are only 2 weeks away before end of August, we can safely say that Q3 explosive result is in the bag now.
So we are staring at Q2 and Q3 2022 eps of at least RM1 per quarter. Logically that should be the case.

Posted by information > 2022-08-13 18:59 | Report Abuse

Europe heading into winter with low storage levels of diesel
8/12/2022
www.hydrocarbonprocessing.com/news/2022/08/europe-heading-into-winter-with-low-storage-levels-of-diesel

The European Union will stop buying all seaborne Russian crude oil from early December and will ban all Russian refined products two months later.

Europe continues to rely heavily on Russia to satisfy its diesel demand, with 60% of Europe's seaborne diesel imports originating from the country in July, according to data from Energy analytics firm Vortexa.

And with no evidence that companies are stockbuilding ahead of sanctions, traders expect Europe to be in for a winter shock.

Posted by Johnzhang > 2022-08-14 10:21 | Report Abuse

@probability,
The crack spreads data for 2nd qtr are all available.
Based on the hedging model you have been describing, will you be able to estimate the Q2 hedging consequences?
Pls share .

Posted by probability > 2022-08-14 12:03 | Report Abuse

@john, as you are aware Q2 PAT (gross profit after taking out the hedging loss), shall be based on gross profit of Mar 22', Apr 22', and May 22' referring to average crack spread data on these months.

As such the peak crack spread of June 22' will be reflected on July 22' PAT.

The gross profit (before hedging loss) reported in Q2 however, will have the figures of Apr 22'. May 22 and Jun 22'.

......

Though the crack spread for Jun 22 is phenomenal, and it was not available to take into consideration on my derivation below early Jun 22, it does not matter since it will have the same 'phenomenal rise' in hedging loss to deliver almost the same Gross profit minus hedging loss of MYR 955 million as derived on link below:

https://klse1.i3investor.com/blogs/2017/2022-06-11-story-h1624320379-HENGYUAN_derivatives_loss_on_Q1_22_completely_clarification.jsp

Posted by probability > 2022-08-14 12:19 | Report Abuse

However, my derivation above of 956 million (after hedging loss) is based on data published for actual refinery producing 10 % Fuel Oil yield which has a 'negative' crack spread of above 20 USD/brl and Diesel yield of only 34%.

Whereas HY has yield of 46% for Diesel and 2% for Fuel Oil.
As such, the actual refining margin of HY can be much higher than the above derivation.

Posted by probability > 2022-08-14 12:29 | Report Abuse

Take note to take out about 80 million MYR from the gross profit as the cost of production (the utilities cost of production like natural gas, chemicals etc) before arriving at other expenses such S&A, D&A, Interest etc of another 100 million MYR.

Posted by probability > 2022-08-14 12:40 | Report Abuse

So, if you ask me what i will bet as the PBT as the most closest figure, i would say ~700 million.

However, be prepared knowing HY will always come with some unexpected costs...he he

lets not have too much expectation. Lets just aim EPS of RM 1....

With Hy proving such profit and market later realizing that full implementation of russian oil restriction will only take place end of the year like what @information had shared... HY should at least hit RM 10 as long term visibility would be there.

Posted by probability > 2022-08-14 12:49 | Report Abuse

No gloves stock had hit such high EPS we are estimating and unlike gloves, no one is going to build refineries in a year....

No one will invest in new refinery - pretty sure on that. I think nuclear fission is the next future of energy....

Posted by kl_guy > 2022-08-14 15:31 | Report Abuse

when will HY q-report out ? want buy more call warrant before q-report out.

Posted by Johnzhang > 2022-08-14 16:15 | Report Abuse

Hi probability, Thanks for the explaination.
Total expenses after GP (ie manufacturing, Adm, Dep & Amortisation, Finance) was $95M for Q1 2022, $100M per qtr average for 2021 and $106M per qtr average for 2020. Your $80+100 M = $180M expenses for Q2 is well above the actual in recent qtrs and therefore with huge buffer built-in.

Your estimated GP is $1,056 M
less hedging loss ($100M)
less Expenses ($180M)
-------------------------------------
PBT $776M

Tax $100m @24% ($24M)
Tax $676M @33% ($223M)
-----------------------------------------
NPAT $529M
EPS $1.76

The upside are :
1. lower expenses than the $180M built-in the calculation
2. Higher GP from significantly higher Diesel yield (46 vs 34%) and lower Fuel oil.

The reservation i have if the Management's actual hedging deviate from the model described by you. Let's wait for the QR with much excitement.


We look forward to the exciting QR.

Posted by probability > 2022-08-14 16:39 | Report Abuse

Well summarized John, thanks

Any higher GP reported than $1,056 will result equally higher hedging loss to give back the same after hedging loss of $956.

Just some notes from below link why it matters the complexity refinery (complex vs simple refinery)

https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/petrochemicals/072722-refinery-news-roundup-some-maintenance-continues-in-russia

As of June 30, complex refining margins increased 160% from February 22 to Rub21,000/mt ($382/mt), while simple refining margins quadrupled, reaching Rb5,000/mt over the same period, Petromarket told S&P Global Commodity Insights.

Finding alternative outlets for fuel oil and the switch to bitumen production in the summer months has also provided a relief to less complex refineries whose storages were flooded with fuel oil as international buyers avoided taking it, according to market sources. However, the situation might reverse again as the road repair and construction season ends with the advent of cold temperatures, and refineries increase fuel oil production.

Posted by probability > 2022-08-14 16:43 | Report Abuse

If gasoline crack drops too low, simple refiner will reduce output (or even stop producing) affecting even diesel availability on the market, thus supporting complex refinery margin who can produce more Diesel.

I.e, the simple refiner gets the damage first due to the negative crack spread of fuel oil.