Posted by ProbobalityDieDieDie > 2022-09-10 16:19 | Report Abuse

ProbebilityDieDieDie 

probabilityDie 

I Mahbob Rehman an ex professor from Dhaka University 100 % asked you stop posting. We want to tiuu uuu people. Probability you don’t have to block us. 
I Probability FCUK my Mother this morning. My father was very angry and he slashed my mother with a KNIFE. As a coward I ran away. 
My father later HANG ED HIMSELF. 
I Probability regretted FCUKING my own mother. 
My boss OTB asked me to spamming you. I need to obey or else I can’t receive my salary from boss OTB. 
You don’t follow my boss OTB order. Then you die already alone. 
You go and ask my boss OTB if you not believe me. 
OTB my boss pays me a lot of money. So I still need to spamming here i3. 

ALL THE ABOVE FAKE REPOSTINGS ARE DONE BY Income @ Income. 
all the misunderstanding started when Income tried to get some tips from sifu OTB.When OTB disagree , Income offer his mother to sleep with OTB. Being a holy person and a gentlement OTB tell Income to go to a temple and pray and dont do bad things. 
So now all of you know who this Income is.

ALL THE ABOVE FAKE REPOSTINGS ARE DONE BY by Zhuge_Liang and Aseng. @Zhuge_Liang and Aseng. 
all the misunderstanding started when Income and Zhuge_Liang and Aseng tried to get some tips from sifu OTB. When OTB disagree , Income and Zhuge_Liang and Aseng offer his mother to sleep with OTB. Being a holy person and a gentlement OTB tell Income and Zhuge_Liang and Aseng to go to a temple and pray and dont do bad things. 
So now all of you know who this Income and Zhuge_Liang and Aseng is.

Post a Comment 
olih mahbob boss 

1 minute ago 


probability 
@Income@Zhuge_Liang
@Aseng,

Posted by probability > 2022-09-10 16:20 | Report Abuse

link:
.....

www.cmegroup.com/markets/energy/refined-products/singapore-mogas-92-unleaded-platts-brent-crack-spread-swap-futures.html

Posted by probability > 2022-09-10 16:22 | Report Abuse

@Aseng,

the below is simplified description for your current reading, i will try to put in even more simpler wordings and post later.

These losses you are seeing in simple terms are just like fair value gain or losses of an asset but it purely shows the change in its value without considering the value of the asset.

These asset HY deals with is not like ordinary property but, hedged margin in futures (with distributed maturity) which is utilized along with physical market sales & purchase transaction in parallel.

Hengyuan had hedged 18 million barrels at avg 12.7 USD/brl refining margin to be effected as it matures at the rate of 0.8 million barrels per month. This is mainly for gasoline.

This is indicated by the Refining margin Swap contract (RMSC) of USS 226 million as can be seen on their financial report.

USD 226 million = USD 18 million x USD 12.7/brl

The fair value changes with respect to the hedged value are reflected under Other Comprehensive Income (OCI) using Cash flow Hedge and Cost of hedging reserve as per IFRS 9:

These are basically forecasted derivative loss against mark-to-market margin in future as of 30th June.
....................

Since the market margin (in futures) as of 30 June 22 was extraordinarily high at $ 32/brl. The expected hedging losses for gasoline going forward was high and reported accordingly.

Hedging loss:

(hedged margin - spot margin) x hedged barrels

= (12.7 USD/brl - avg 32 USD/brl) x 18 million barrels
= - USD 347 million
= - 1.5 Billion MYR

This is not a real loss, but expected 'ópportunity loss' due to hedging and thats why it is not reported in P&L.

The above forecasted losses when occurs in future, it is accompanied by greater gross margin where after offsetting these losses, it will deliver the profit margin in P&L as per the original hedge value of 12.7 USD/brl

As such, these forecasted loss done at end of each financial report would over-turn completely when gasoline margin dives down..

Refer below link which is presently showing $ 5.2/brl in Sep 2022 to $ 4.3 /brl in Dec 2023.

At end of June it was showing avg $ 32/brl

link:
.....

www.cmegroup.com/markets/energy/refined-products/singapore-mogas-92-unleaded-platts-brent-crack-spread-swap-futures.html


At end of Sept 22' (for Q3), if the spot margin value above maintains, you have

Hedging gain:

= (12.7 USD/brl - avg 4.5 USD/brl) x 18 million barrels
= USD 147 million
= 650 million MYR


Posted by Aseng > Sep 10, 2022 3:14 PM | Report Abuse

Probability, I do not what is going on here . I was attracted by the calculated earning 222 per share, but I am perlexed by the unrealized hedging loss of 360 sen per share. can you kindly clarify in a layman language how is the hedging gain/loss can be ignored totally to evaluate the earning potential of hengyuan. it is unfair for the readers to be mislead or misinformed by a good earning with a big paper loss . thank you

Posted by Aseng > 2022-09-10 16:35 | Report Abuse

probability,

honestly , it is more difficult to understand your hedging calculation than your profit calculatin using crack spread
one more silly question ,
under what circumstances will the 'ópportunity loss' due to hedging turns into real loss due to hedging ?

Posted by Aseng > 2022-09-10 16:37 | Report Abuse

one more silly question

what is Refining margin Swap contract (RMSC) of USS 226 million?

how it is related to hedging of the crack spread ?

Posted by probability > 2022-09-10 16:42 | Report Abuse

@aseng,

firstly it may not even turn out to be a loss but a gain - but whichever occurs the effective profit will be exactly as hedged.

it realized when it matures and followed by physical market transaction at that time

you need go through below to understand how hedging works

(its mandatory to understand the refining margin hedging):
.........................................................

Extract from below article:

www.cmegroup.com/education/articles-and-reports/introduction-to-crack-spreads.html


Fixing Refiner Margins Through a Simple 1:1 Crack Spread

In January, a refiner reviews his crude oil acquisition strategy and his potential gasoline margins for the spring. He sees that gasoline prices are strong, and plans a two-month crude-to-gasoline spread strategy that will allow him to lock in his margins. Similarly, a professional trader can analyze the technical charts and decide to “sell” the crack spread as a directional play, if the trader takes a view that current crack spread levels are relatively high, and will probably decline in the future.

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.

Posted by Aseng > 2022-09-10 16:44 | Report Abuse

now already the month of september , why the hedging matured at the end of Jun still an unrealised loss

Posted by probability > 2022-09-10 16:48 | Report Abuse

barrels hedged x hedged margin (or crack spread)

Posted by Aseng > Sep 10, 2022 4:37 PM | Report Abuse

one more silly question

what is Refining margin Swap contract (RMSC) of USS 226 million?

how it is related to hedging of the crack spread ?

Posted by probability > 2022-09-10 16:53 | Report Abuse

it did not mature, but they can forecast future hedging losses/gain (unrealized) against their hedged crack when it matures later, during the end of Q2 reporting period (30th June) using the futures link i had shared above

Posted by Aseng > Sep 10, 2022 4:44 PM | Report Abuse

now already the month of september , why the hedging matured at the end of Jun still an unrealised loss

Posted by Mikecyc > 2022-09-10 16:57 |

Post removed.Why?

Posted by Mikecyc > 2022-09-10 17:03 |

Post removed.Why?

Posted by probability > 2022-09-10 17:11 | Report Abuse

@Mikecyc, FYI below at 50% hedging level

Rock bottom EPS analysis
.........................

let us assume as extreme conservative scenario where 50% of HY throughput is hedged where they will only reflect hedge margin at 10 USD/brl, with the balance free to capture market margin

1. Diesel at 46% yield, cracks USD 50.36/brl
2. Jet fuel at 7% yield, cracks USD 38.40/brl
3. Gasoline at 35% yield, cracks USD 7.77/brl
3. Rest of product yield at 12%, using Mogas 95 cracks USD 7.77/brl

Gross profit from (Hedged) portion:
..............................

= (10.7 million x 50%) x (10 USD/brl) x (MYR 4.45/USD)
= 238 million MYR .....(1)



Gross profit (UN-HEDGED) portion:
............................

Refining margin/brl:

= (0.46 x 50.4 ) + (0.07 x 38.40) + (0.35 x 7.77) + (0.12 x 7.77)
= (23.18 + 2.70 + 2.72 + 0.93)
= US $ 29.5 / brl

Gross profit:
= (10.7 million x 50%) x (29.5 USD/brl) x (MYR 4.45/USD)
= 702 million MYR ......(2)



Total gross profit (1) + (2)
= 238 + 702
= 940 million MYR

PBT = 840 million
PAT = 638 million
EPS = 2.12

Posted by Mikecyc > 2022-09-10 17:29 |

Post removed.Why?

Posted by probability > 2022-09-10 17:33 | Report Abuse

these derivative effects we are seeing are mainly related to refining margin swap - not the inventory

as such crude oil price movement is insignificant to the derivative loss/gain

Posted by Mikecyc > 2022-09-10 17:34 |

Post removed.Why?

Posted by Mikecyc > 2022-09-10 17:47 |

Post removed.Why?

Posted by dompeilee > 2022-09-10 18:12 | Report Abuse

Can a major refiner go bust? Started tiptoeing into Shell(former name) @ 8.10 in 2013 then averaged down @ 5.65 in 2014. Seemed to be going bust in '15 with a 1 bil loss & NTA crashed to 1.00. Finally, looooong time holder Shell plc also throw in the towel, selling out @ 1.80 in '16 & it seemed my investment was doomed. Bought some @ 2.20+ shortly after but didn't dare to hold & contra-ed off for a small profit. Then an old con got involved & it rose past 5, then 6, then 7. Sold 70% of my stuck investment @ 7.60(avg cost = 6.77)...in hindsight way too early. The other 20% went out in the 8s, the last 10% @ 10.82 but it only peaked @ 19.20.

Share price movements are highly unpredictable even when the quarter is predicted/ confirmed to be good because insiders are already in action months in advance(discounting mechanism)

Posted by probability > 2022-09-10 18:22 | Report Abuse

yes, for the short term as the 'insiders' were taking profit

long term price will try to reflect the good earnings

Posted by dompeilee > Sep 10, 2022 6:12 PM | Report Abuse

Share price movements are highly unpredictable even when the quarter is predicted/ confirmed to be good because insiders are already in action months in advance(discounting mechanism)

Posted by Rabbit2 > 2022-09-10 19:55 | Report Abuse

Til today still not many people know what is hedging. hedging is simply mitigating your risk exposure, not magnifying your risk. Based on this principal, you can ignore the accounting part unless you are doing profit projections.

Posted by Jerichomy > 2022-09-10 20:04 |

Post removed.Why?

Posted by BobAxelrod > 2022-09-10 20:12 |

Post removed.Why?

Posted by BobAxelrod > 2022-09-10 20:24 |

Post removed.Why?

Posted by UlarSawa > 2022-09-10 20:26 | Report Abuse

So after hot debate. How. tomolo can green or red. Must bet also mah. Haiyoh. Correct?

Posted by UlarSawa > 2022-09-10 20:27 | Report Abuse

Ular bet tomolo is green. Boleh?

Posted by UlarSawa > 2022-09-10 20:27 | Report Abuse

Tomolo must be green lah. Aseng pun mari sini. Haiyoh. Correct?

Posted by UlarSawa > 2022-09-10 20:28 | Report Abuse

Musang pun mari sini. Tinggal Uncle Koon belum mari lagi. Haiyoh. Correct?

Posted by UlarSawa > 2022-09-10 20:29 | Report Abuse

Ah Pang ada mari or not. If all also mari. All the 2017 old Superpromoters pun mari. Then pasti Tuju Langit lah. Haiyoh. Correct?

Posted by Ahahah > 2022-09-10 20:30 | Report Abuse

@Ular Sunday where got market.

Posted by BobAxelrod > 2022-09-10 20:33 |

Post removed.Why?

Posted by BobAxelrod > 2022-09-10 20:35 |

Post removed.Why?

Posted by tehka > 2022-09-10 20:40 | Report Abuse

Eh Ular, you mimpi lagi lah, tomolo got what trading? Btw, you people so obsessed with Hengyuan kah? Weekend no trading also burn midnight oil looking at i3 forum

UlarSawa
Ular bet tomolo is green. Boleh?



UlarSawa

Posted by tehka > 2022-09-10 20:42 | Report Abuse

Where got same as 2017? In 2017, raider is super promoter come out all the AhFah Pudu vegetable aunty story, but now turn super penkritik

UlarSawa
Ah Pang ada mari or not. If all also mari. All the 2017 old Superpromoters pun mari. Then pasti Tuju Langit lah. Haiyoh. Correct?

Posted by tehka > 2022-09-10 20:49 | Report Abuse

Yakah Uncle belum mari. How ular know? ular got curi-curi tengok uncle punya portfolio kah?
Haiyoh, Correct?

Posted by UlarSawa > 18 minutes ago | Report Abuse

Musang pun mari sini. Tinggal Uncle Koon belum mari lagi. Haiyoh. Correct?

Posted by UlarSawa > 2022-09-10 21:03 | Report Abuse

Haiyoh. Then you answer tomolo cannot green lah. Haiyoh. Correct?


tehka

Eh Ular, you mimpi lagi lah, tomolo got what trading? Btw, you people so obsessed with Hengyuan kah? Weekend no trading also burn midnight oil looking at i3 forum

UlarSawa
Ular bet tomolo is green. Boleh?



UlarSawa

Posted by UlarSawa > 2022-09-10 21:06 | Report Abuse

Yalor. Ular OKU one lah. But Ular dunno why you all like to talk to OKU one leh. Correct?


greatwall

Ular....from low iq to high iq? Just curious

28 minutes ago

Posted by UlarSawa > 2022-09-10 21:07 | Report Abuse

Uncle ada cakap he sold already b4 release QR leh. He panlai leh. Know HY price not sustainable one leh. Haiyoh. Correct?


tehka

Yakah Uncle belum mari. How ular know? ular got curi-curi tengok uncle punya portfolio kah?
Haiyoh, Correct?

Posted by UlarSawa > 2022-09-10 21:10 | Report Abuse

Raider repented mah. So he also scare other also kena conned so he horsim sharing his views from penkritik lah. You all must convince him to come back jadi super promoter leh. Same also must convince Uncle Koon mah. Else how to tuju langit leh. Haiyoh. Correct?

tehka

Where got same as 2017? In 2017, raider is super promoter come out all the AhFah Pudu vegetable aunty story, but now turn super penkritik

Posted by UlarSawa > 2022-09-10 21:11 | Report Abuse

Yalor Ah Pang is a very good promoter leh. But lately also jadi penkritik more leh. Must ask him to come back here jadi super promoter leh. Haiyoh. Correct?


BobAxelrod

You mean we shall soon have IBs satay meat?

Posted by UlarSawa > 3 minutes ago | Report Abuse
Ah Pang ada mari or not. If all also mari. All the 2017 old Superpromoters pun mari. Then pasti Tuju Langit lah. Haiyoh. Correct?

34 minutes ago

Posted by UlarSawa > 2022-09-10 21:12 | Report Abuse

You want history to repeat then must have all the previous Super Promoter join forces leh. Haiyoh. Correct?

probability

exactly....great reunion after 5 years!

Posted by UlarSawa > Sep 10, 2022 8:29 PM | Report Abuse

Ah Pang ada mari or not. If all also mari. All the 2017 old Superpromoters pun mari. Then pasti Tuju Langit lah. Haiyoh. Correct?

38 minutes ago

Posted by UlarSawa > 2022-09-10 21:14 | Report Abuse

Ular know lah. Purposelybto wake you all up mah. Else pun tak nampak lain orang except the few Cafe Boss punya macai spamming lah. Haiyoh. Correct?

Ahahah

@Ular Sunday where got market.

42 minutes ago

Posted by probability > 2022-09-10 21:22 | Report Abuse

@aseng,

the above is the most shortest precise information on OCI i can provide at the moment. You need not go through the youtube video above, but you must understand that there are two transactions needed in parallel for hedging to be 'effective'...

one transaction happens on the futures market & the other in the physical market

every gain they make in the futures market will be a loss in physical market and vice versa - that is how they determine-fixed the margin going forward in advance, i.e hedging

Posted by UlarSawa > 2022-09-10 21:33 | Report Abuse

Why Ah Pang scare of Sifu OTB kah. Why leh. Ada dispute kah. Haiyoh. Correct?

probability

Raider no hope..Pang72 got hope...Pang72 very scared of OTB...lets see

17 minutes ago

Posted by UlarSawa > 2022-09-10 22:45 | Report Abuse

Ular OKU leh. Apa tu hengyuanese. Got such race kah. Why hengyuanese all are very good kakijudi kah. Haiyoh. Correct?


Posted by greatwall > 1 hour ago | Report Abuse

Ular@..you not an Hengyuanese? Then must be an oku?

Posted by UlarSawa > 2022-09-10 22:48 | Report Abuse

Lets ular interpret apa tu hengyuanese. It must be from Yuan Dynasty one lah. Itu Yuan Dynasty already no more leh. How can heng yuanese so clever kah. If clever why the Dynasty cannot survive until now leh. Must be loser lah. Thats replaced by another Dynasty lah. Haiyoh. Correct?

Posted by probability > 2022-09-10 23:06 | Report Abuse

Why Gasoline margin came down but its not so easy for Diesel?
............................................................

EU refinery are 90% simple type, asians like HY are mainly complex type

for simplicity they product yields are as per below:

keyword note - this output ratio cannot be altered

Simple refinery:
...............

40% Gasoline (crack spread : 7 USD/brl)
20% Diesel (crack spread: 50 USD/brl
10% Jet Fuel and other (crack spread at: 20 USD/brl)
30% Fuel Oil ( crack spread : - 25 USD.brl)

avg margin: 7.3 USD/brl

Complex refinery:
.................

30% Gasoline (crack spread : 7 USD/brl)
50% Diesel (crack spread: 50 USD/brl
18% Jet Fuel and other (crack spread at: 20 USD/brl)
2% Fuel Oil ( crack spread : - 25 USD.brl)

avg margin: 30 USD/brl

Due to good margin in refining in Q2 for all refined products including gasoline, everywhere refinery had increased their output by maximizing utilization rate at 99%..

by July gasoline supply had risen more than demand (user of gasoline have the choice to limit their consumption by say working from home)

but despite refineries squeezing all they can on output, the diesel supply still cannot meet demand (diesel mainly used for transportation and manufacturing industry)

Now at this limit of refining output (intentionally delaying maintenance), the diesel is still short...

results is lower crack spread for gasoline and still high crack spread for diesel...


keypoint:
.........

now, at the above low avg refining margin due to fuel oil, its likely that EU refinery will reduce output if gasoline crack is too low, further reducing diesel availablity

Its like natural mechanism in place to sustain Diesel & Jet fuel margin

unless logistics industry, airlines and manufacturing itself slows down due to high price..its unlikely diesel & Jet fuel crack to come down

thats why its actually good for oil price to come down to sustain business and thus demand for benefit of refineries

Posted by probability > 2022-09-10 23:07 | Report Abuse

Sustainability?
...............

what a state of chronic paranoia due to past volatility on earnings of refinery

one shall talk about sustainability of earnings when stocks are trading above PE 20 may be..or the least PE 10

panicking now for a stock that barely moved up from its historic avg low?

refinery stock like HY only needs 13 USD/brl avg refining margin to deliver EPS above RM 1 consistently

now its averaging above 26 USD/brl

and we dont need RM 1 EPS per qtr to justify current price, even 40 cents consistently would do...

there are too many structural changes GLOBALLY that indicates constraints will remain due to shortage in global refining capacity and takes years (more than 5 years to build a refinery and investors are not keen despite high margin currently) unlike gloves for supply to catch up with demand...

its earnings can certainly be volatile, but the mean avg of the crack is expected to be significantly higher than previous years as intermittent shortage due to refinery maintenance, break down etc is high....

as such the odds of margin spiking intermittently is just too high going forward

this especially so considering russian sanction (which is the core of the structural changes that we are basing here)

keyword: sanctions are expected to last years
............................................

there are no such thing as a business being inherently sustainable without such structural factors...any business including tech stocks can have its margin eroded significantly within a short a time

Posted by Mikecyc > 2022-09-11 00:12 |

Post removed.Why?

Posted by i3lurker > 2022-09-11 00:18 | Report Abuse

However I fully support and agree that now is the time to effect a HRC share transfer to "others" due to Global Refinery oversupply by 5%.

Last chance to sell.

Posted by tehka > 2022-09-11 00:47 | Report Abuse

Probability, and I believe that converting a simple refinery to a complex refinery is something that will take years, correct? This affect the diesel supply for many years to come

Posted by tehka > 2022-09-11 00:50 | Report Abuse

Dear lurker, what global refinery oversupply are you talking about? Any source and link? Thank you