Hibiscus current market cap = RM1.3billion Hibiscus current EBITDA FY2021 = RM380 million
Now let us assume that Hibiscus is valued based on market cap/EBITDA, which means the market is pricing in a market cap to EBITDA ratio of 4x.
Now let us assume that Hibiscus has completed its Repsol acquisition, and assuming that the market prices its future market cap to EBITDA of 4x as above.
Hibiscus current EBITDA FY2021 + Repsol = RM380 million + RM570 million = RM950 million.
If the above holds true, Hibiscus should be valued at RM950 million x 4 = RM3.8 billion.
Why is Repsol adding so much in market cap, you must ask? Because the RCPS has already been fully converted and hence diluted into the market cap of Hibiscus, plus majority of the funding of the acquisition is via the cash flow from the Repsol assets since 1 January 2021, and some minimal debt, according to Hibiscus's presentation with FIRL. In essence, Hibiscus is paying money that is already in its pocket, does not need to raise more capital from shareholders to get an asset that is generating 1.5x its current cash flow.
I don't want to say that it is obvious, but guys, come on, it's damn obvious. Furthermore the above Ebitda of RM950 million is assuming oil price is between USD50-55 Brent. It is currently trading at USD73, which means much higher EBITDA.
err... oil down price up, oil up price down, so as a shareholder, should I pray a falling oil price to see a rising share price or a rising oil price to see better earning report?
The government has agreed to open the tourism sector in several destinations under the ‘travel bubble‘ programme based on a list of conditions.
As reported by Utusan Malaysia, Prime Minister Datuk Seri Ismail Sabri Yaakob said, for a start, Langkawi Island was chosen as a pilot project to be reopened to local tourists on Malaysia Day, 16 September.
“We are pleased to inform that through the meeting, we agreed to open the tourism sector in several destinations under the “travel bubble” programme based on the conditions set. For a start, Langkawi Island has been selected as a pilot project to reopen to local tourists starting 16 September,” he said.
He added that it would not be long before other tourist destinations will also be a part of this project.
“Other tourist destinations will be allowed to operate when the locality vaccination rate reaches 80%,” he said.
1) North Sabah Average net oil production rate : 6,442 bbls per day Average realised oil price: USD51.75 per bbl. Opex : USD14.21 per bbl Revenue : RM569.9 million EBITDA : RM313.2 million Margin of EBITDA : 55%
2) Anasuria UK Average net oil and gas production rate : 2,665 bbls per day Average realised oil price :USD50.04 per bbl. Opex : USD22.19 Revenue : RM229.0 million EBITDA : RM90.5 million Margin of EBITDA : 39.5%
Total net operating cash flow : RM 297 million Total capital expenditures ( capex ) : RM 137.5 million Free cash flow : RM 297 million - RM 137.5 million = RM 159.5 million
3) Repsol assets --Hibiscus bidded Repsol assets at early of 2021, during Brent oil USD 48-55 per bbl --Average net oil and gas production rate : 17,400 bbls per day --Opex of oil : around USD 15 per bbl --Opex of oil and gas : less than USD 15 per boe --Estimated EBITDA : RM 558.8 million --capital expenditures ( capex ) : USD 80 - 110 million (Aminvest and Public Bank prediction)
Energy Information Administration (EIA) estimated the average Brent oil price for 2021 is around USD 68.
Total revenue from Repsol ( 01/01/2021 till 31/12/2021) = 17400 x 365 x 68 x 4.1 ( RM conversion rate) = RM 1,770.7 million If the margin of EBITDA same with North Sabah, which is 55%, Estimated EBITDA from Repsol : RM 1,770.7 million x 55% = RM 973.9 million
Total EBITDA for Hibiscus for CY2021 ( 01/01/2021 till 31/12/21) = North Sabah + Anasuria UK + Repsol = RM313.2 million + RM90.5 million + RM 973.9 million = RM 1,377.6 million ( at least )
Maybe "investors" are still not sure because it took about 18 months for the North Sabah deal to complete (Oct 2016 to Apr 2018).
Then Hibiscus was a nobody and it was a first where a "novice" is buying. Before, it was a major buying from another major.
Today, Hibiscus is known to Petronas and the wavier/expiry of pre-emption rights by Cargali (& PVEPC) was quickly obtained as announced on 14 Jul 2021, a mere 1+ month from S&P announcement on 4 Jun 2021. Remember Carigali is 100% owned by Petronas - Petronas would have given approval to Carigali to proceed with the wavier.
The remaining steps would be EGM and Petronas (& PetroVietnam) approval. These two steps would be mere formalities, so the closing of this Repsol deal would be end of 2021/early 2022.
As I have written before, this deal is Hibiscus buying another Hibiscus. The value accretion is there. Do your own due diligent.
the problem with hibiscus is keeping issuing new shares at "way below market price", to who knows who they are, to buy new assets. The issuance of new shares keep diluting the profits earned due to the new shares issued, just look at the NA/share. Minority shareholders are not participating in the issuance of new shares are not actually benefiting from the acquisitions.
@Kahheong: I agree with you. This is the only reason I can think of that is causing the current stock price. In 21 days, Q121 will end and another RM50MM NP. But that doesn’t mean anything if shares continue to get diluted. The announcement is a surprise and disappointing.
I bought H shares last year and sold off all when CRPS/dilutions started. I bought H shares again before repsol acquisition announcement. It’s deja vu. I’ll sell all shares again this week and come back after 6 months. The stock price will be either be the same or lower.
err... what negatives? If a deal's most earnings go towards CRPS holders rather than shareholders of Hibiscus, particularly who have held long terms but not entitled to such exercise, how can this be good? Had all shareholders been offered the opportunities to participate before offering to certain party, the minorities may not feel that hurt. Truth is, if this were to happen again, I won't rule out requesting MACC to look into such deal.
When the repsol deal is finalized , i dont see why this share is not going 80 to 90 sen range. Looking at the recent oil price USD70 per barrel, year end expecting to reach USD 80 onwards especially towards winter time.
Dr Kenneth also mentioned during the repsol acquisition , the oil price at that particular time was at USD 50 per barrel. Now is 70 USD per barrel, we are talking like increasing in 40% per barrel.
Sell Hibiscus shares. 1. Major dilution is going to happen. This will only benefit the major holders. Buying price is 0.48. 2. Oil average at $73/barrel not positively influencing the stock price today. 3. Dependent on successful execution of MnA.
Jojoba, Kahheong and I shared the same promising data and news about Hibiscus. Only jojoba is in denial. He/she cannot answer for the poor stock price also.
NEW ISSUE OF SECURITIES (CHAPTER 6 OF LISTING REQUIREMENTS) : FUND RAISING HIBISCUS PETROLEUM BERHAD ("HIBISCUS PETROLEUM" OR "THE COMPANY") ALLOTMENT AND ISSUANCE OF UP TO 2,000,000,000 NEW ISLAMIC CONVERTIBLE REDEEMABLE PREFERENCE SHARES BY WAY OF PRIVATE PLACEMENT EXERCISE TO RAISE UP TO RM2.00 BILLION ("PRIVATE PLACEMENT OF CRPS")
The CRPS programme is a multi-tranche programme which permits the Company to issue CRPS in tranches as and when it is required. Since the launch of the CRPS programme in September 2020, Hibiscus Petroleum has only issued RM203.6 million CRPS. The Company exercised caution when sizing the issuance, which was based on the amount the Company estimated was required to pay a SPA deposit based on its bids pipeline.
Investment strategy : How to become financial free through stock market investment?
Step 1 : Try to find a way to make a big fund as early as possible, may be at least RM 300,000. This is the hardest part.
Step 2: Use all your fund to buy a single undervalued stock when the chance comes. Keep it for 3 to 7 years until 3X ,then sell all of them. Your fund should be worth at least RM 1 million. Keep all of these money in FD or bonds, and wait for the second chance.
Step 3: When the second chance comes, use all of your fund to buy a single undervalued stock, keep it for 3 to 7 years then sell it at 3X. Your fund should be worth at least RM 3 million.
Step 4 : Finally, you should diversify all these money in high dividend stocks or REITs which will give at least 5% dividend. That means you will have at least passive income of RM 150,000 every year.
This is a very simple way to help you retire early, but not easy to practise. You need to read a lot and do some research. You need to convince yourself regarding the true intrinsic value of stock.
Jeff Bezos, founder, chairman, CEO, and president of Amazon is the richest man in the world. Once in a meeting with Warren Buffett, he asked America’s most prolific investor, your investment thesis is so simple. You’re the second richest guy in the world, and it’s so simple. Why doesn’t everyone just copy you?”
Warren Buffett responded Jeff by saying, “Because nobody wants to get rich slow.”
I think by current share price, Hibiscus offers us the precious chance ( low risk, high reward) for financial free. In order to understand the true intrinsic value of Hibiscus, I think it is worth for you to spend at least 1 month from now ( before Hibiscus completes Repsol acquisition):
1) to read a lot regarding Oil and Gas industry 2) to understand Exploration and Production ( E&P ) sector 3) to read all annual reports and quarter reports of Hibiscus. Try to find extra information / presentation via Google or Youtube 4) Try to understand business model of Hibiscus 5) Can you trust the management team? What can be done better if you were CEO? 6) Who are Hibiscus' competitors? Local and international 7) What is the risks in investing Hibiscus
If you plan to invest big in particular undervalued stock for long term, I think it is worth your time to do detailed research on Hibiscus.
Management mentioned Repsol Asset acquisition expect to complete by CY2021. So the Segment result from Repsol will show in 2nd Half 2021 coming QR or next year?
Because some analyst informed Repsol result only included in FY22 2nd half....
cy2021 is calendar year 2021, that means expected to complete by this year. If completed by end Dec, segment results will be included in q1 2021 quarter and we will be able to see the q1 results on may 22.
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mokluhanj21
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Posted by mokluhanj21 > 2021-09-03 11:47 | Report Abuse
Girl, why u still asleep? HAHAHA. BUY BUY BUY WALAWEH
Nearly 95% of Gulf Coast oil and gas production offline as Hurricane Ida buffets Louisiana:
https://www.morningstar.com/news/marketwatch/20210829230/nearly-95-of-gulf-coast-oil-and-gas-production-offline-as-hurricane-ida-buffets-louisiana