1500 units in two days!
The target is average 6000 cars monthly in the first 3 months. That's is nearly a third of monthly volume of ~17/18k.

Quoted'According to managing director of Perodua Sales, Datuk Zahari Husin, bookings for the new Myvi have reached an all-time high, with 1,500 units recorded in just under two days."
https://paultan.org/2017/11/11/2018-perodua-myvi-1500-bookings-in-just-two-days/

Launching is set on 16 Nov 2017. Will have a better feel of the market response towards the new Myvi.

PetDag, 3% higher sales volume is based on combined retail & commercial. If only include the retail segment, the actual growth volume YoY is -4% due to upgrading & improvement activities. Compare that to expected volume growth for PetronM 3Q2017 of 18.2%, deduced from the “Malaysia grew volume by 9%...” from Petron Corporation’s statement to Securities and Exchange Commission, “gaining market share” is going to be a powerful fuel to already heightened momentum for PetronM ….

Note: 3Q2016: 7.7m barrels, 2Q2017: 8.5m barrels; 3Q2017:9.1m barrels (calculated)

From the selling pattern by ASB for the past few days, it seems ASB defined the 8.40-8.68 area as sell zones…

The closer to the upper limit, the more they sold. Obviously, they expected the 8.68 high to hold. If they are really into technical, the rally is safe!! Today close is a strong green bar with surging volume. A clear cut warning sign to ASB to stay clear! Of course, there is always a chance ASB never get the memo......

Date, Open, High, Low, Close, ASB Selling Volume vs Total Volume (ASB/Total %)
2 Nov O: 8.5, H: 8.52, L: 8.44, C: 8.45, 525,900 vs 956,000 (55%)
1 Nov O: 8.52, H: 8.59, L: 8.45, C: 8.49, 386,200 vs 807,000 (48%)
31 Oct O: 8.31, H: 8.59, L: 8.31, C: 8.47, 755,600 vs 2,137,400 (35%)
30 Oct O: 8.40, H: 8.43, L: 8.25, C: 8.36, 0 vs 437,700 (0%)
27 Oct O: 8.40, H: 8.40, L: 8.31, C: 8.38, 0 vs 336,600 (0%)
26 Oct O: 8.36, H: 8.42, L: 8.34, C: 8.39, 0 vs 222,700 (0%)
25Oct O: 8.41, H: 8.41, L: 8.31, C: 8.40, 8,400 vs 231,200 (3.6%)

LCTitan’s projects, i.e TE3, PP3 and Integrated Complex in Indonesia are well positioned to tap into the growth market in Asia.

Quoted:”.. Shell says, the continued expansion of the world's economy, particularly in Asia, means consumption of other refined oil products and petrochemicals is likely to grow. For instance, there are no economically viable substitutes for asphalt, needed to build roads, or for the polymers and chemicals used to produce plastics…..”

http://www.lse.co.uk/politicsNews.asp?code=q9dor007&headline=Shell_looks_beyond_road_fuels_to_secure_future_of_refining

Congratulation to Hengyuan’s shareholder for the spectacular performance of the share price today!

Came across another article to report that Shell is upbeat on the prospect of refining business in Asia.

Quoted:” Shell is perhaps the most aggressive in its sector in forecasting that the demand for gasoline could reach an apex by the 2030s as drivers shift to electric vehicles and traditional engines become more efficient. But still, Shell says, the continued expansion of the world's economy, particularly in Asia, means consumption of other refined oil products and petrochemicals is likely to grow.”

http://www.lse.co.uk/politicsNews.asp?code=q9dor007&headline=Shell_looks_beyond_road_fuels_to_secure_future_of_refining

The turn of luck for Lotte?

Lotte gets approval for China property project as bilateral tensions ease

http://www.reuters.com/article/uk-lotte-china/lotte-gets-approval-for-china-property-project-as-bilateral-tensions-ease-idUSKBN1D608B

Aero1, the link to Reuters should work now. Thanks for the feedback.
https://www.reuters.com/article/us-refinery-operations-shell-convent/shell-shelves-plan-to-close-convent-gasoline-unit-in-2018-idUSKBN1D20SZ

@HibisRock, based on previous works in Shell Trilogy: The Final Call, North Sabah produced 2.2x more oil but only 1/4 profit per barrel.

Using back all the assumption, the additional profit from NS should be 2.2 x 0.25=0.55x Anasuria.

So, based on estimate 1Q2018F of RM11.4m, total net profit including both Anasuria and NS should be 1.55 x  11.4 = RM17.7m.

Effective date means with economic interest since 1/1/2017...

Transaction Status:
Quoted" We are currently working on fulfilling all conditions imposed on us by the Sellers and the Malaysian regulators and we continue to work towards making this transaction unconditional."

The S&P date is 12 October 2016.

Quoted" On 12 October 2016, the Company announced that its wholly-owned subsidiary, SEA Hibiscus Sdn Bhd had entered into a conditional sale and purchase agreement (SPA) with Sabah Shell Petroleum Company Limited (SSPC) and Shell Sabah Selatan Sdn Bhd (SSS) (collectively the Sellers) to acquire the entire participating interests of the Sellers in the...."

South Korea prosecutors seek 10-year jail term for Lotte chairman

http://www.reuters.com/article/us-lotte-group-probe-prosecution/south-korea-prosecutors-seek-10-year-jail-term-for-lotte-chairman-idUSKBN1CZ0M6?feedType=RSS&feedName=businessNews

A rising tide lifts all boats...and FPSOs.
Sharing my recent post at link below.
https://klse.i3investor.com/blogs/20102017/136525.jsp

Not exactly but the palm oil should be good driven by both volume and price....

Following is Maybank Research’s take on Q32017 result.

Quoted “The management will propose to Board for 2017 dividend to be 50% of reported net profit minus MYR 300m turnaround Capex. Based on our forecast, this will amount to 17sen/shr which equates to 3.3% yield at current share price. However, the Board will decide post full-year 2017 results and seek shareholder’s approval in the AGM.”

Given that PCHEM dividend yield is 2.57%, at similar dividend yield Titan is worth ~RM6.72. That should however act as the ceiling to dividend based valuation, given the premium PCHEM should deserve with its superior returns.

Second tranche just 38.1m share or RM26.5m, less share but more money than 1st tranche 62m share or RM23.9m.

Applaud the management and/or banker for getting more fund with less placement share. Still have some 44.2m share left for 3rd tranche if so desired.

On the flip side, look like demand is relatively soft at 69.5 sen.

Few take-away from the quarterly result.
1) Gross margin is up QoQ to 15.1% from 12.6% in line with plant utilization of 77% vs 71%.
2) On prospect, slightly bearish with improving supply especially in US. However, production will rebound as no major planned shutdown.
3) Utilization at Indo plants to remain low until polyethylene economics return. (Harvey hurricane drove ethylene price above both HDPE & LDPE from mid Aug. Meaning negative margin. Indonesia plants are fully dependent on imported ethylene)
4) TE3 is expected to be commissioned in 4Q2017.

Overall, a decent quarter given the operating environment. Am quite relief that Indonesia plants will have low utilization. Checked Indonesia subsidiary, losses and profits +/- USD$8m over last 3 years. So, shouldn't have too much bearing on that. TE3 will add 93KTA Ethylene, 127KTA Propylene and 134KTA Benzene vs 80~100KT Ethylene purchased per quarter (Add capacity is some 25% of ethylene purchased). That should lower down the cost. The worst seem over…

That's just my 2 cents.

@ VenFX, thanks! 三人行必有我师

Phillips 66 is expected to report earnings tomorrow (27/10/20). Generally the trend should be the same...

Another third quarter earnings release from Marathon Petroleum Corp which reported $903million or $1.77 EPS.

Take a look at the operating income from Refining and Marketing segment…
Quoted” Refining & Marketing (R&M) segment income from operations was $1.1 billion in the third quarter of 2017, compared with $252 million in the same quarter of 2016. The increase in the segment results for the third-quarter 2017 from the third-quarter of 2016 was primarily a result of a $3.47 per barrel increase in the R&M gross margin…”

http://ir.marathonpetroleum.com/phoenix.zhtml?c=246631&p=irol-newsArticle&ID=2311489

Valero Energy Corporate released their third quarter 2017 result. Net Profit $841m vs $613m YoY +37.0%
Of which Refining segment operating income of $1.4b vs $934m YoY +49.9%, the best among all divisions.

Quoted "The increase in operating income was driven primarily by higher gasoline and distillate margins and wider discounts for domestic sweet crude oils relative to Brent crude oil..."

This is despite 5 of their refineries were disrupted by Hurricane Harvey during the quarter…

http://www.investorvalero.com/phoenix.zhtml?c=254367&p=irol-newsArticle&ID=2311493

@ilovehits, UK has 30% corporate tax + 10% supplementary charges for its oil and gas industry. This tax rate can however be reduced though tax allowance for capital expenditure. However, as stated in the quarterly report, capex expenditure is minimal and will only increase in 2H2017. One will always find tax rate sometimes fluctuate quarter to quarter due to the timing differences as items of revenue or expense that are recognized in one period for taxes but in a different period for the accounting. It is always better if you use average tax rate for the year than period. Other possible reason causing higher tax rate could be due to certain expenses are non-tax deductible.

Market easily forgets one off losses as long as they do not impair the company's fundamentals.
Sharing my post on LCTitan at link below:
https://klse.i3investor.com/blogs/20102017/135826.jsp

For me, perhaps to consider re-entry at support after the release of quarterly report AND the oil price is staying afloat.
Only the paranoid survive…

Hibiscus share movement for both price fixing periods is noticeably different The timing of second tranche also appears accelerated as it is quoted in BIMB report that management expects to complete the second tranche in 2QFY18.

In the period leading to first price fixing, Hibiscus share price was range bound which only breakout after the fixing date. The share consolidated at higher range before it staged the 40% hike on20/9.

Conversely, we see a sudden price surge in the period leading to 2nd tranche price fixing. And guess what, the first day to be used in calculating the average VWAMP is also coincidently the first time ever Hibiscus share closed above RM0.70 in 2 years.

And now that price fixing is finally done 17/10, Hibiscus share is slowly drifting down despite record oil price with technical indicator turn bearish….

First Tranche Fresh Private Movement dated 4 August
5 days VWAMP of share up to & including 3 August: 0.4086
Discount: 5.8%
Range: 0.405-0.415

Second Tranche Fresh Private Movement dated 17 Oct
5 days VWAMP of share up to & including 16 October: 0.7276
Discount: 4.5%
Range: 0.68-0.765

Take note of the Valero reporting date: 26/10 which could be a catalyst for Hengyuan to breakout from the range.

http://www.reuters.com/article/us-usa-refineries-results/u-s-diesel-margins-to-drive-refiner-profits-for-third-quarter-and-beyond-idUSKBN1CN2U5

Few operational and/or strategic changes are pursued by the new refinery management as noticed. Among others are in inventory holding, functional currency, feed stock sourcing (as shared by Probability’s article) etc. That said, SRC Management real capability in this business will be tested in 2018.

2016 profit was driven by inventory gain and subsequently enjoying (or about to enjoy) windfall from superb crack margin in 2017. 2018 landscape is expected to be challenging given the anticipated increase in refining capacity in this region as well as normalization of crack margin. On operational side, HRC needs to deliver both the RM 700m plant upgrade and major turnaround in 2018.

A dividend policy underpinned by sustained profitability will support the stability of the share price. Hypothetically 50 cents per share dividend could pin the share price nicely at RM 10 or 5% yield.

That’s just my two cents…

FutureEyes,

Thank you for sharing the source of info. It certainly helps.

HRC had entered into futures, swaps, options and option derivatives to mitigate margin risks as preempted in their previous quarterly report (A17). They are also considering hedging against forex transaction.

Though I admit it is bit disappointing on the realized sum (in RM) but hedging is for downside protection, so it is more comforting that hedges are made at relative high level than the profit.
From the disclosure, it offer a sneak peek of their hedging policy. The phrase "from time to time" however indicates that the crack margin for future months may yet to be locked. Hedging is prudent in light of records crack margin which is unsustainable as seen in futures.

Without knowing their hedging position, it brings greater uncertainty in profit forecasting….

FutureEyes,

A typical hedge aims to protect against the downside at the expense of some upside. Based on info that you just shared, I interpret that HRC made gains from hedges in 2 months where crack margin rocketed up. That means HRC managed to lock-in prices only at the later stage of rally.
If the amount is in USD, that is extra ~RM50m. Good call by the management. That is some extra 16 Sen to PBT.

I wonder where you get this from. Care to share?

I’d commented on the tax rate in other post therefore not repeating it again here.
On LCTitan, it’s a good pick and I have position in this counter too. When the investment horizon stretches beyond the shutdown cycle, it’s less of a concern.

OrlandoOil, At first I thought EOR qualify for marginal field tax rate. But I have no evidence of so despite extensive online search. So to be on the conservative side, I choose to use higher rate.

Quote:
The qualified marginal field is a specific area determine by the Minister, and is a field in a petroleum agreement area that has potential crude oil reserves not exceeding 30 million stock tank barrels or natural gas reserves not exceeding 500 billion standard cubic.
Unquote:

http://www.ey.com/Publication/vwLUAssets/Malaysia_provides_tax_incentives_to_encourage_marginal_oil_field_development/$FILE/2013US_CM3369_Malaysia%20provides%20tax%20incentives%20to%20encourage%20oil%20field%20development.pdf

OrlandoOIL, we shall know the accuracy when the next quarterly result is released. I had provide all the source from which forecast is derived. May not be the best estimate but it’s an honest attempt.

From the report by Public Investment Bank:
Anasuria: RM 0.58 (DCF with WACC=11%)
North Sabah: RM 0.48 (2C reserve only)
North Sabah is given a lower valuation despite higher production.
Again, not all profit are equal....

The 2700 bbl/day production that you quoted is still subjected to taxation...
Consider that in Iraq, contractors are paid fix fee US$2 per barrel, it is not too bad as with PSC you share more if the oil heads north.

The data source and the analysis are both provided and explained. Is my story really very different from those bank research? On the contrary, I think it’s congruent. Taking BIMB report that was shared in Hibiscus forum as example (table 3 & table 4):
Anasuria Fair Value (derived from DCF) for 2018, premised on 55 USD/bbl and 3800 bbl/d production, is RM 0.468
North Sabah Fair Value for 2018, premised on same oil price with 8000 bbl/d production, is RM 0.581

Shouldn’t North Sabah deserve a much higher Fair Value since the production is twice as much in comparison with Anasuria?
Not all profit are equal…

A cautionary note to Hibiscus Investor who expects imminent closure of North Sabah Deal:
From BIMB Market Insight Report shared in this forum, it is quoted on the North Sabah Update section that “Management expects to complete the acquisition by end 2017 or sometime in early 2018.” This means closure is expected within 3-6 months from now.

I expect volatility to persist, in tandem with Brent Oil movement which is impacted by seasonality. Historically, crude oil tend to rise in summer, peak-out towards Sept and October.
http://marketrealist.com/2016/03/seasonality-impacts-crude-oil-prices/

Fatimah, PSC is good for the country as the government get the biggest slice.

If you are asking in the context of Hibiscus share price, what I can say is that Hibiscus paid (or is going to pay) a good price for the assets, whether it translates into better share price for Hibiscus especially after nearly 40% increase is another matter...

Meaning 70% of profit goes to PETRONAS and the balance 30% to the joint venture. Since Sabah Shell (to be taken over by Hibiscus) only has 50% share, then the profit attributed to Shell is only 50% of 30% share of profit of the joint venture (total output 18k barrel per day). I’m not able to find any information that production below 10k is given special rate of 50:50. Anyway, this is irrelevant since the joint venture TOTAL production 2015 is 18kbpd, which is over 10k (of which 9kbpd belongs to Sabah Shell).

Under PSC term, the government is enjoying 3 slices from the barrel pie, i.e Royalty, profit attributed to PETRONAS (in the form of dividend) and finally taxation.

2011 North Sabah Enhanced Oil Recovery Production Sharing Contract was entered between PETRONAS and a 50:50 joint venture between Sabah Shell Petroleum Company and Petronas Carigali. No, the 50:50 is NOT the profit sharing ratio but is the equity ratio in the joint venture between Sabah Shell & Petronas Carigali.

Actual Profit sharing between PETRONAS & the joint venture is not made available to BURSA and hence estimate of 70:30 is used, which is based on "revenue over cost" PSC sliding scale. See link below

https://hub.globalccsinstitute.com/publications/assessment-capture-and-storage-potential-co2-co-produced-natural-gas-south-east-asia/a52-malaysian-psc

HIAPTEK is weaker even exclude those impairment. Revenue declined -12.4% YoY & -23.2% QoQ....

I'm less optimistic on Splash deal completion on 5 Oct. The election date is just too near. But remember easily RM2.8-3.2billion!
ERCL is good potential. LRT3? So far LRT3 is awarded mainly to mid size contractor while George Kent is the PDP. The only really outstanding is the property division with the star performer its Vietnamese assets.

OrlandoOil, the term specific to North Sabah PSC was not disclosed by Hibiscus to BURSA, citing confidentiality reason. The premise for modeling the profitability and price sensitivity under PSC term was articulated in my previous post, i.e ” Shell Trilogy: The Last Call. ”
You may refer to links below for further information on PSC:
https://hub.globalccsinstitute.com/publications/assessment-capture-and-storage-potential-co2-co-produced-natural-gas-south-east-asia/a52-malaysian-psc
http://www.ccop.or.th/ppm/document/CAWS4/MalaysianPSC.pdf

Fatimah, I do concur with VenFx. Hibiscus will be volatile. The ride will be bumpy, depending on how and when the North Sabah deal eventuate. I don’t have a target price for you but caution is strongly advised as per the content of my write-up. Buy on weakness and do not chase high.

Venfx, thank you for supporting my write-up.

Thank you Connie for the kind comment. I'm humbled. Hibiscus breaks all the resistant points in this write up and rocket all the way up into clear blue sky within one day.
My latest post is up. Do take at look at "Shell Trilogy: The Great Sale".

Hengyuan change the functional currency from RM to USD since 1 Jan 2017

The trendline breakout is now confirmed as strong and clean! Well done Hibiscus!

GM68, I suppose you are referring to the disclaimer, which states " the author has position in Hibiscus..." I don't work for Hibiscus. It means I have equity/ share investment in Hibiscus.

Some 325,700 bbl/day refining capacity is about to go online. The refinery’s production was shut down by flooding from Harvey. Deer Park Refinery, operated by ex-owner of Hengyuan Refining Co.
http://www.reuters.com/article/us-un-assembly/as-north-korea-threat-looms-trump-to-address-world-leaders-at-u-n-idUSKCN1BS0WB

There’s excitement about the news on West Seahorse. I would rather sell West Seahorse and investing all the proceeding into Anasuria & North Sabah. Refer to my latest post from link below:
https://klse.i3investor.com/blogs/hibiscus_part1/132396.jsp

In fact some of the previously identified enhancement opportunities were already effected. Per quarterly report dated 30 June 2017, the two wells which were shut-in by the previous operator due to H2S level (TLS-P1 and GUA-P1) were recently reopened and currently producing. Positive financial impact will likely observed by end of 2017.

typo: up by 3.4%