Posted by BoomBerg > 2022-08-31 14:28 | Report Abuse

Lulu

Posted by Sharewire > 2022-08-31 14:29 | Report Abuse

Qtr3 is will be HUGE


The next Q3 result comprises of crack spread june to Aug, average crack spread for gasoline + diesel + jet fuel is around USD38. Therefore, it can extimate than hengyuan upcoming Q3 pretax profit is RM 1.2 billion. EPS = RM 3

Posted by cactus81 > 2022-08-31 14:30 | Report Abuse

Hopefully HY will pay more. dividen.

Posted by Sharewire > 2022-08-31 14:30 | Report Abuse

Qtr3 will explosive dynamite!

Hedging GAIN!

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

I just estimate EPS RM1 for 22Q3. Anything above that is bonus.

Posted by Tantoro > 2022-08-31 14:32 | Report Abuse

Vietnam new refinery cost US$ 13 B to built with 210 K barrel per day
Where else HY capacity is 156 k barrel per day

Posted by King_trader_shadow > 2022-08-31 14:35 | Report Abuse

Sharewire, how did you calculate the average crack spread for all of them, and what is the average for gasoline in your calculation?

Posted by Amoneymous > 2022-08-31 14:35 | Report Abuse

Yes so that company can siphon money back to HENGYUAN Shandong.
They are major share holder.

Posted by cactus81 > 2 minutes ago | Report Abuse

Hopefully HY will pay more. dividen.

Posted by Tantoro > 2022-08-31 14:39 | Report Abuse

Seeing HY record eps 2.24 olk man K bangbang balballs already
Maybe curi curi buying and later come out a article praising HY and apologies he make a very stuuppid mistake

Posted by BoomBerg > 2022-08-31 14:42 | Report Abuse

Thursday LU and Friday LU too
Good luck everybody
Hengah Ongah Huatah

Posted by Zhuge_Liang > 2022-08-31 14:48 |

Post removed.Why?

Posted by Ravi1969 > 2022-08-31 14:49 | Report Abuse

MM have been in the hedging business before? If you don't know just shut it la. Hedging with any metals, commodities is all the same. Based on what you are saying means HY is cheating?? Better report to SC otherwise you are just barking as usual

Posted by Johnzhang > 2022-08-31 14:50 | Report Abuse

If you don’t understand the accounting for derivatives , better shut your mouth lah. It’s embarrassing to yourself.

In past qtrs, there were also $200-300 expenses in comprehensive income . HY didn’t lose money in the following qtr . They were very profitable in the following qtr instead . Go and research lah…


Posted by MoneyMakers > 17 minutes ago | Report Abuse

Q3 how to survive - need swallow 1.07Bil hedging loss

They alrdy highlight 1.07Bil hedging loss in ‘other comprehensive expense’ as WARNING of HY’s overall weakness

Posted by King_trader_shadow > 2022-08-31 14:52 | Report Abuse

Johnzhang,

Did they absorb the Q1 hedging in the Q2 report?

Posted by Tantoro > 2022-08-31 14:54 | Report Abuse

How about Jeric and Mickey mouse
Zhuge_Liang Using karma to curse MoneyMakers is too kind to her.
I want to see her jump down from a tall building.
The damage done by her on all investors in Hengyuan forum is too huge.
This type of damage done by her cannot be forgiven.
All poor investors just cut loss because of her bad mouth.
31/08/2022 2:48 PM

Posted by Zhuge_Liang > 2022-08-31 14:58 |

Post removed.Why?

Posted by probability > 2022-08-31 15:00 | Report Abuse

HY does hedging on the crack and also on the inventory.

If the hedging is done on inventory, you can see hng33's explanation.

If the hedging was done on margin, you can see my explanation. It can be purely gasoline or any combination of the refined products. But, gasoline fits the changes best for ease of explanation here.

Its most likely combination of both inventory and crack / margin.


Posted by hng33 > Aug 31, 2022 11:43 AM | Report Abuse

Based on Q2 revenues and cost, hengyuan realize crack spread around USD 28, which in accord to average crack spread range from Mar to May crack for gasoline+ diesel + jet fuel. Hengyuan realize pretax profit RM 900m.

The next Q3 result comprises of crack spread june to Aug, average crack spread for gasoline + diesel + jet fuel is around USD38. Therefore, it can extimate than hengyuan upcoming Q3 pretax profit is RM 1.2 billion. EPS = RM 3

The hedging position will revert back from loss to gain as crude oil, feedstock cost, fallen from USD 135 in Q2 to USD 105 in Q3. Hengyuan NTA will booster significantly from RM 5.2 to + RM 3( from reversal hedging) + Q3 EPS RM 3 - - - - > total NTA for hengyuan RM 11


Posted by probability > Aug 31, 2022 9:16 AM | Report Abuse X

The most likely commodity hedging that caused the unrealized derivative loss is the Gasoline.

Note that the crack spread of gasoline jumped from 10 USD/brl to 32 USD/brl from Q4 21 by end of Q2 22

Say they hedged 10 million barrels 'gasoline - brent' crack by end of 2021 (considering the intent to secure relatively good margin in Q4 21' compared to avg of only 7 USD/brl last few years).

They would have bought brent crude at 100 USD and sold gasoline at 110 USD/brl in futures market with maturity of 2 years (end of 2023).

The above means they have a margin swap hedging contract valued at 10 million barrels x 10 USD/brl = USD 100 million expiring by Dec 2023.

Now by end of Q2 , the gasoline margin had expanded to 32 USD/brl.

They would need to mark to market the hedging contract status by end of Q2

This means they will report an unrealized hedging loss of 10 million x 22 USD/brl (crack expansion from their hedging to 32 from 10), which equal 220 million USD.

Now by end of Q3, if the present crack maintains for gasoline, the crack would drop back to 10 USD/brl resulting with zero hedging loss.

They can choose to realize the hedging by this qtr without affecting the P&L at all or they can do it when another opportunity arise before end of 2023 (but they must realize before the maturity).

Posted by Zhuge_Liang > 2022-08-31 15:02 |

Post removed.Why?

Posted by Johnzhang > 2022-08-31 15:04 | Report Abuse

Only you and God knows ! Hahaha


Posted by stockraider > 2 hours ago | Report Abuse

No need lah!

Raider just want to save innocent here from getting kon mah!

Posted by Tantoro > 2022-08-31 15:06 | Report Abuse

Limit up tomorrow

Posted by Tantoro > 2022-08-31 15:11 | Report Abuse

Yes flood this forum too


probability HY does hedging on the crack and also on the inventory.

If the hedging is done on inventory, you can see hng33's explanation.

If the hedging was done on margin, you can see my explanation. It can be purely gasoline or any combination of the refined products. But, gasoline fits the changes best for ease of explanation here.

Its most likely combination of both inventory and crack / margin.


Posted by hng33 > Aug 31, 2022 11:43 AM | Report Abuse

Based on Q2 revenues and cost, hengyuan realize crack spread around USD 28, which in accord to average crack spread range from Mar to May crack for gasoline+ diesel + jet fuel. Hengyuan realize pretax profit RM 900m.

The next Q3 result comprises of crack spread june to Aug, average crack spread for gasoline + diesel + jet fuel is around USD38. Therefore, it can extimate than hengyuan upcoming Q3 pretax profit is RM 1.2 billion. EPS = RM 3

The hedging position will revert back from loss to gain as crude oil, feedstock cost, fallen from USD 135 in Q2 to USD 105 in Q3. Hengyuan NTA will booster significantly from RM 5.2 to + RM 3( from reversal hedging) + Q3 EPS RM 3 - - - - > total NTA for hengyuan RM 11


Posted by probability > Aug 31, 2022 9:16 AM | Report Abuse X

The most likely commodity hedging that caused the unrealized derivative loss is the Gasoline.

Note that the crack spread of gasoline jumped from 10 USD/brl to 32 USD/brl from Q4 21 by end of Q2 22

Say they hedged 10 million barrels 'gasoline - brent' crack by end of 2021 (considering the intent to secure relatively good margin in Q4 21' compared to avg of only 7 USD/brl last few years).

They would have bought brent crude at 100 USD and sold gasoline at 110 USD/brl in futures market with maturity of 2 years (end of 2023).

The above means they have a margin swap hedging contract valued at 10 million barrels x 10 USD/brl = USD 100 million expiring by Dec 2023.

Now by end of Q2 , the gasoline margin had expanded to 32 USD/brl.

They would need to mark to market the hedging contract status by end of Q2

This means they will report an unrealized hedging loss of 10 million x 22 USD/brl (crack expansion from their hedging to 32 from 10), which equal 220 million USD.

Now by end of Q3, if the present crack maintains for gasoline, the crack would drop back to 10 USD/brl resulting with zero hedging loss.

They can choose to realize the hedging by this qtr without affecting the P&L at all or they can do it when another opportunity arise before end of 2023 (but they must realize before the maturity).
31/08/2022 3:00 PM

Posted by Tantoro > 2022-08-31 15:12 | Report Abuse

InvestView You can see a pattern of naysayers behaviors before and after the QR2 is out.Before the QR2 results it was always MM Jerichomy etc shouting unfounded, un back up facts ... now after the QR is out you hv Stock Raider qqq3 etc doing the same!
IBs are the biggest suspects wanting to suppress the share price.. the naysayers are either their agents or the know the facts that what ibs will do in the aftermath of QR2 result ..suppress the price and the naysayers want to take a ride... sickening!
31/08/2022 1:33 PM

Amoneymous Because they are panic?

Lets short squeeze the IB?

Posted by InvestView > 48 seconds ago | Report Abuse

You can see a pattern of naysayers behaviors before and after the QR2 is out.Before the QR2 results it was always MM Jerichomy etc shouting unfounded, un back up facts ... now after the QR is out you hv Stock Raider qqq3 etc doing the same!
IBs are the biggest suspects wanting to suppress the share price.. the naysayers are either their agents or the know the facts that what ibs will do in the aftermath of QR2 result ..suppress the price and the naysayers want to take a ride... sickening!
31/08/2022 1:36 PM

Amoneymous Yeah If you understand cockrider logic.
This is what cockrider mean.

Posted by Sharewire > 6 minutes ago | Report Abuse

Pay thru the nose tax 230million ! What a fool
If I the MD I pay rm1 ringgit for tax!
I divert the dividends 30million into mine pocket.
I hire qqq333, moneymaker and stock raider as my advisor.
31/08/2022 1:37 PM

probability no worries, i dont think these naysayers are agents to the IBs...

these are plain old man with very little education who had been surviving either by bullying or cheating..

they are scavenger category people

both driven by jealousy (qqq3 is jealous of OTB)
raider is jealous of HY over petronM..he got bitten by HY earlier as he never managed to understand how their earnings are related to crack spread and how their hedging works... that past phobia had haunted him to an extent he just cant reverse his views


market can be slow but eventually it gets intelligent

watch the show..


Posted by InvestView > Aug 31, 2022 1:33 PM | Report Abuse

You can see a pattern of naysayers behaviors before and after the QR2 is out.Before the QR2 results it was always MM Jerichomy etc shouting unfounded, un back up facts ... now after the QR is out you hv Stock Raider qqq3 etc doing the same!
IBs are the biggest suspects wanting to suppress the share price.. the naysayers are either their agents or the know the facts that what ibs will do in the aftermath of QR2 result ..suppress the price and the naysayers want to take a ride... sickening!
31/08/2022 1:42 PM

Posted by BoomBerg > 2022-08-31 15:13 | Report Abuse

Lulu

Posted by BoomBerg > 2022-08-31 15:13 | Report Abuse

2.24 Lulu

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

Zhuge_Liang Using karma to curse MoneyMakers is too kind to her.
I want to see her jump down from a tall building.
The damage done by her on all investors in Hengyuan forum is too huge.
This type of damage done by her cannot be forgiven.
All poor investors just cut loss because of her bad mouth.
31/08/2022 3:02 PM

Posted by probability > 2022-08-31 15:28 | Report Abuse

For layman, one can view that HY has an inventory (crude) of 6 million barrels where they hedged at say 125 USD/brl by end if Q4 21.

If by end of Q1 22, the market inventory value is at 120 USD/brl.
They will report this as hedging loss of :

(125 - 120) x 6 million barrels
= 132 million MYR loss

If by end of Q2 22', the market inventory value is at 100 USD/brl
They will report this as hedging loss of :
(125 - 100) x 6 million barrels
= 660 million MYR loss

If by end of Q3 22', the market inventory value is at 125 USD/brl
They will report this as hedging loss of :
(125 - 125) x 6 million barrels
= 0 million MYR loss

If by end of Q4 22', the market inventory value is at 130 USD/brl
They will report this as hedging loss of :
(125 - 130) x 6 million barrels
= 132 million MYR GAIN!

The above is true as long as they kept the same inventory and did not utilize it for sales at market value on any of the qtrs above.

The maturity date of the hedging contract is the deadline where they have to realize it as sales. Once they make it as sales, they will be paid as per market value and that is when the hedging loss or gain above will be realized and reported on P&L.

Say in Q1 22 they had decided to sell at market value. They would have been paid 120 USD x 6 million barrels = 720 million USD

On their hedging contract they have to pay the same 6 million barrels at 125 USD/brl = 750 million USD

(the hedging contract simply means you need to pay the agreed amount (price) before maturity and take hold of the 6 million barrels)

The difference in cash flow; 720 million (IN) - 750 million (OUT) = - 30 million USD is the hedging loss that would go to P&L.

We can see from above the loss reported on unrealized Hedging may never take place at all and be reported on P&L as they have plenty of time for the market pricing to match again their hedging price.

Posted by MoneyMakers > 2022-08-31 15:43 |

Post removed.Why?

Posted by probability > 2022-08-31 15:46 | Report Abuse

Go and read their annual reports (search using CTRL F for derivatives / notional amount), all hedging contract has approximately 24 months for maturity.

Posted by MoneyMakers > Aug 31, 2022 3:43 PM | Report Abuse

Aiyoyo where got HY hedge longterm 1yr at same hedged price

Q2 is 1st time show huge ‘pending’ 1.07Bil hedging loss (new hedge position entered @ not reflected in any prev QR) - means their hedging contract shortterm basis

Hedged price also change with new contract entered lo

Posted by MoneyMakers > 2022-08-31 15:46 | Report Abuse

Commodity daily/weekly price highly volatile - nobody gonna hedge longterm 1yr at same hedged price aiyoyo

Posted by ty Y > 2022-08-31 15:50 | Report Abuse

I want to see if someone will call the police this time and try to mislead investors. Please call the police.

Posted by MoneyMakers > 2022-08-31 15:50 |

Post removed.Why?

Posted by probability > 2022-08-31 15:58 | Report Abuse

Refer pg 130 of 2021 annual report - refer 'maturity date' its until 2024

Posted by MoneyMakers > Aug 31, 2022 3:50 PM | Report Abuse

What their annual report means is UP TO 24months

Impossible leh ALL hedged contract 24months expiry - not logic (too long)

Posted by Mikecyc > 2022-08-31 16:15 |

Post removed.Why?

Posted by Mikecyc > 2022-08-31 16:19 | Report Abuse

Referred to Latest Q2 Report ended June 2022 :

1. Non Current Asset :

Derivative financial assets. RM 14,363,000

2. Current Asset :

Derivative financial assets. RM 247,598,000

3. Non Current Liabilities :

Derivative financial liabiliti RM 480,908,000

4. Current Liabilities :

Derivati financial liabilitie RM 1,305,569,000

>>

Cash flow hedge reserve ( 543,706,000 )
Cost of hedging reserve. ( 786,566,000 )


Borrowing : 1,500,466,000

Capital n Reserve : 1,576,380,000

Gearing Ratio : 0.952

————————————-


Referred to Q1 Report ended March 2022 :

1. Non Current Asset :

Derivative financial assets. RM 2,976,000

2. Current Asset :

Derivative financial assets. RM 158,102,000

3. Non Current Liabilities :

Derivative financial liabiliti RM 42,581,000

4. Current Liabilities :

Derivati financial liabilitie RM 1,452,913,000

>>>

Cash flow hedge reserve ( 299,007,000 )
Cost of hedging reserve. 48,335,000


Borrowing : 1,452,913,000

Capital n Reserve : 1,988,495,000

Gearing Ratio : 0.731

Posted by probability > 2022-08-31 16:19 | Report Abuse

@Mikecyc, read the annual report its for refining margin swap

refining margin swap is basically hedging the feed crude and refined products at the same time

for crude , if market price drops below hedging price, its hedging loss and vice versa

for refined products, if market price rise above hedging price, its hedging loss and vice versa

Posted by probability > 2022-08-31 16:21 | Report Abuse

thats why HY is confident in giving interim dividend...

wait till you see the russian oil sanction takes effect

Posted by probability > 2022-08-31 16:22 | Report Abuse

Only Q2 we have sudden spike on refined products price end of June for Diesel and by April for Gasoline

refined product price going above hedging price will be reported as hedging loss as mentioned above

Posted by MoneyMakers > Aug 31, 2022 4:20 PM | Report Abuse

Pg 130 says hedging contract maturity between 1-33months (2020: 1-12months)

Likely most HY hedge contracts only shortterm 1-3months @ thats why see sudden huge ‘pending’ hedging loss 1.07Bil (newly entered contract not seen in prev QR)

Posted by MoneyMakers > 2022-08-31 16:22 |

Post removed.Why?

Posted by Mikecyc > 2022-08-31 16:24 |

Post removed.Why?

Posted by probability > 2022-08-31 16:24 | Report Abuse

you can now keep repeating the same
all concern & disputes had been clarified

Posted by probability > 2022-08-31 16:25 | Report Abuse

@Mike even 12 months is plenty of time, in fact Q3 market pricing for crude, and refined products already matching Q1

As such the unrealized derivative loss will go back to the level reported in Q1 22

Posted by stockwin > 2022-08-31 16:26 | Report Abuse

Perhaps those who believe HY is doing pure hedging by the book will benefit from holding on to HY to see it rise eventually if not tomorrow. Those who think HY is doing derivatives trading will shun the stock and regret later.

Posted by probability > 2022-08-31 16:29 | Report Abuse

yes, market is intelligent eventually..

the sooner one realizes the greater the opportunity to make money from HY

like i said earlier, any price below limit up price is a bargain


Posted by stockwin > Aug 31, 2022 4:26 PM | Report Abuse

Perhaps those who believe HY is doing pure hedging by the book will benefit from holding on to HY to see it rise eventually if not tomorrow. Those who think HY is doing derivatives trading will shun the stock and regret later.

Posted by Mikecyc > 2022-08-31 16:30 |

Post removed.Why?

Posted by MoneyMakers > 2022-08-31 16:32 |

Post removed.Why?

Posted by MoneyMakers > 2022-08-31 16:33 | Report Abuse

Thats why commodity hedge usually short term aiyoyo

Posted by Mikecyc > 2022-08-31 16:34 |

Post removed.Why?

Posted by probability > 2022-08-31 16:34 | Report Abuse

read carefully its for refining margin swap, ie the crack spread for gasoline

example above is for crude oil to show hedging effects qtr to qtr

Posted by MoneyMakers > Aug 31, 2022 4:32 PM | Report Abuse

Aiyoyo makes no sense to enter 1yr hedging contract at fixed price usd120

Oil could be usd60 in 1yr who knows

Daily/weekly oil price alrdy highly volatile - risk on 12month contract is exponential

Posted by Mikecyc > 2022-08-31 16:37 |

Post removed.Why?

Posted by MoneyMakers > 2022-08-31 16:43 |

Post removed.Why?