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
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
Petronm suffer 300++ hedging loss but not shiphoned money to Philippines! Hengyuan suffer hedging loss but shiphoned to china "CLAIM STOCK RAIDER" Stock raider own petronm but didn't own hengyuan. So his verdict is Fake
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 and stock raider as my advisor. And not forgotten moneymaker 2 hours ago
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
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 31/08/2022 4:47 PM
Sharewire Petronm suffer 300++ hedging loss but not shiphoned money to Philippines! Hengyuan suffer hedging loss but shiphoned to china "CLAIM STOCK RAIDER" Stock raider own petronm but didn't own hengyuan. So his verdict is Fake 31/08/2022 4:48 PM
Sharewire 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 and stock raider as my advisor. And not forgotten moneymaker 2 hours ago 31/08/2022 4:49 PM
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 . . . ~~~~~~~~~~~~~~~~ By hedging the inventory, you are buying or selling the hedging contract?
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 31/08/2022 4:47 PM
Sharewire Petronm suffer 300++ hedging loss but not shiphoned money to Philippines! Hengyuan suffer hedging loss but shiphoned to china "CLAIM STOCK RAIDER" Stock raider own petronm but didn't own hengyuan. So his verdict is Fake 31/08/2022 4:48 PM
Sharewire 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 and stock raider as my advisor. And not forgotten moneymaker 2 hours ago 31/08/2022 4:49 PM
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 31/08/2022 3:12 PM
BoomBerg Lulu 31/08/2022 3:13 PM
BoomBerg 2.24 Lulu 31/08/2022 3:13 PM X Tantoro 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 31/08/2022 3:14 PM
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
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 31/08/2022 4:47 PM
Sharewire Petronm suffer 300++ hedging loss but not shiphoned money to Philippines! Hengyuan suffer hedging loss but shiphoned to china "CLAIM STOCK RAIDER" Stock raider own petronm but didn't own hengyuan. So his verdict is Fake 31/08/2022 4:48 PM
Sharewire 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 and stock raider as my advisor. And not forgotten moneymaker 2 hours ago 31/08/2022 4:49 PM
Sharewire 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 and stock raider as my advisor. And not forgotten moneymaker
Why are we arguing? EPS of RM2.22 is not Fake ! Divi of 10 sen after any years is not Fake . Paying Income Tax of RM229M is not Fake. Going Limit up tomorrow is likely ! Probably going to be a darling stock soon .
if you hedge refined products and you current market pricing went higher than the price you had hedge, you have unrealized hedging loss when mark to market
Walao Oil Specialist still active at HY. Must be making alot lately sapu cheap cheap lah. Ular gotone very OKU question want to ask you leh. Why HY earn 222sen in last Qtr but NTA drop more than than lat Qtr from 662 sen to 524sen. Why earn so much still need to raise so much of fund and borrowed more money leh. Debt increased alot leh. Why ha. Can help answer or not. Boleh?
@ularsawa, kindly go through comments from Rabbit2, Sslee and hng33 if you are lazy to scroll through all the historical comments since yday where the same questions had been asked and answered
Posted by UlarSawa > Aug 31, 2022 5:38 PM | Report Abuse
Walao Oil Specialist still active at HY. Must be making alot lately sapu cheap cheap lah. Ular gotone very OKU question want to ask you leh. Why HY earn 222sen in last Qtr but NTA drop more than than lat Qtr from 662 sen to 524sen. Why earn so much still need to raise so much of fund and borrowed more money leh. Debt increased alot leh. Why ha. Can help answer or not. Boleh?
Cash on hand increased bcos of borrow more money or from profit one. macam pun from borrowing leh. Then why inventory so high value why cannot sell or what. Can anyone help to answer this. Boleh?
Oil specialist Ular dont like their reply bcos they are more bias one pasal ada vested interest lah. You more professional and not bias one leh. Correct?
Another OKU question why so high trade and other payable leh. Almost 4bil. jumped almost double leh. Wei Anyone know why so high one. Ini kena bayar one leh. Hutang lah. Correct?
Posted by probability > 5 minutes ago | Report Abuse
for crude (raw mat) inventory , its buying in futures for refined oil (products) inventory, it selling in futures . . ~~~~~~~~~~~~~~~~~ thanks! if we want to hedge crude, let's say we have the inventory 6m at buying price 100 /brl, and we hedge it by buying equivalent contract @100/brl (just assume a neutral price, doesn;t matter higher or lower, bcos future go in tandem with physical commodity) ....... so if the price go down to, let say 87, what happen to this hedging strategy?
Haiyoh Oil Specialist ular always cakap jadi promoter is not easy job leh. Jadi penkritik is much easy job leh. You now believe or not. Haiyoh. Correct?
Anyway sendiri jaga sendiri punya judi hor. No one can garanti you sure can earn hor. If you lose you only can blame yourself hor. This is judi law hor. Thats why it called Kakijudi hor. Haiyoh. Correct
@firehawk, when you hedge its about protecting yourself from future transaction that will take place, not what had already happened (like the inventory you already purchase).
extract from above provided link:
..
In January, the spread between April crude oil futures ($50.00 per barrel) and May RBOB gasoline futures ($1.60 per gallon or $67.20 per barrel) presents what the refiner believes to be a favorable 1:1 crack spread of $17.20 per barrel. Typically, refiners purchase crude oil for processing in a particular month, and sell the refined products one month later.
The refiner decides to “sell” the crack spread by selling RBOB gasoline futures, and buying crude oil futures, thereby locking in the $17.20 per barrel crack spread value. He executes this by selling May RBOB gasoline futures at $1.60 per gallon (or $67.20 per barrel), and buying April crude oil futures at $50.00 per barrel.
Two months later, in March, the refiner purchases the crude oil at $60.00 per barrel in the cash market for refining into products. At the same time, he also sells gasoline from his existing stock in the cash market for $1.75 per gallon, or $73.50 per barrel. His crack spread value in the cash market has declined since January, and is now $13.50 per barrel ($73.50 per barrel gasoline less $60.00 per barrel for crude oil).
Since the futures market reflects the cash market, April crude oil futures are also selling at $60.00 per barrel in March — $10 more than when he purchased them. May RBOB gasoline futures are also trading higher at $1.75 per gallon ($73.50 per barrel). To complete the crack spread transaction, the refiner buys back the crack spread by first repurchasing the gasoline futures he sold in January, and he also sells back the crude oil futures. The refiner locks in a $3.70 per barrel profit on this crack spread futures trade.
The refiner has successfully locked in a crack spread of $17.20 (the futures gain of $3.70 is added to the cash market cracking margin of $13.50). Had the refiner been un-hedged, his cracking margin would have been limited to the $13.50 gain he had in the cash market. Instead, combined with the futures gain, his final net cracking margin with the hedge is $17.20 — the favorable margin he originally sought in January.
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....
Sharewire
240 posts
Posted by Sharewire > 2022-08-31 16:45 | 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