Post removed.Why?

@Zhuge, just to be 100% correct, i used 210k bpd as effective sales volume. The actual name plate capacity of the vietnam new refinery is around 250k bpd. In any case, USD 5 billion or in the worst case USD 3 billion as a market cap for HY considering its debt, should be a very fair valuation of 40 yr old refinery.

Russia’s Gazprom abruptly imposes three-day maintenance on Nord Stream 1
Ruth Liao

19-Aug-2022

https://www.icis.com/explore/resources/news/2022/08/19/10797713/russia-s-gazprom-abruptly-imposes-three-day-maintenance-on-nord-stream-1/

Russian producer Gazprom on 19 August announced three days of maintenance on Nord Stream 1 starting on 31 August, curtailing all gas flows on the key pipeline to Europe.

“The prospect of Gazprom shutting down Nord Stream 1 for three days is only going to spook the market. Gas prices jumped at the very end of the trading day as the maintenance was announced and could easily rise further on Monday as buyers assess whether they really believe the pipe will return to service as stated by the Russian supplier,” said Tomas Marzec-Manser, Head of Gas Analytics at ICIS.

Marzec-Manser added that the three day duration would likely be taken “with a massive pinch of salt” by the market, as concerns would likely persist on whether the pipeline even returns to service, on time or at all.

very true Tobby..if we go in this direction..afghanistan is where malaysia is heading

The only religion that preaches freedom of speech - so that truth has a chance to surface:

https://www.youtube.com/watch?v=akeA0EvLEbs

Post removed.Why?

Rosneft says replacing Russian oil at German refinery will cause fuel price jump

https://www.euronews.com/next/2022/08/13/rosneft-germany-refinery

The European Union plans an almost-complete embargo of Russian barrels by year-end, and is trying to wean itself off Russian crude imports, which have fed inland refineries in Germany.

“The replacement of even a part of Russian supplies will lead to underloading of the plant and a sharp increase in the cost of petroleum products, the shortage of which is already a serious threat to the German consumer market today.”

just listen to the first 5 minutes

if you dont like the content of the book - dont read it

if you dont like what others say / joke - dont listen to it

do not impose on others to secure what u are insecure of

https://www.youtube.com/watch?v=IerteSOfbZ8&t=294s

what is free speech

https://www.youtube.com/watch?v=dqMPyIHdgqc

we are only seeing the tip of the iceberg....every month as time ticks towards 5 Dec 2022, refining margin will only keep rising.

EU sixth package of sanctions against Russia

https://www.shiplawlog.com/2022/06/13/eu-sixth-package-of-sanctions-against-russia/

The package of sanctions E.U. has prohibits the import (or purchase or transfer, directly or indirectly) of Russian crude oil and certain petroleum products into member states, as well as the seaborne delivery of such goods to third countries. Any insurance, reinsurance, technical assistance, brokering services, financing, financial assistance or any other related services, direct or indirect, are also prohibited. A wind-down period of six to eight months applies to existing contracts and “one-off” spot contracts, provided certain reporting requirements are met.

Again, it is prohibited to provide insurance or reinsurance for maritime transport of crude oil and refined petroleum products to third countries. European Union operators and entities may not provide any new insurance or finance contracts for the transport, in particular through maritime routes, of Russian oil to third countries. The Council has included a wind-down period of six months (until 5 December 2022) for closing out any existing contracts executed before 4 June 2022.

https://ec.europa.eu/commission/presscorner/detail/en/QANDA_22_2823

What is the impact of the ban on oil, on Russia and the EU?

The impact of the oil ban on Russia will be significant. Around half of its total oil exports go to the EU. In 2021, the EU imported €71 billion worth of crude oil (€48 billion) and refined oil products (€23 billion) from Russia.

Losing this leading lucrative market will have a significant structural effect on Russia, whose budget relies substantially on these oil revenues.

HANOI -- PetroVietnam Power, a unit of state-run Vietnam Oil and Gas Group, has announced plans to build an oil refinery and petrochemical complex in the country. The total investment is expected to be up to $18.5 billion.

https://asia.nikkei.com/Business/Materials/PetroVietnam-plans-to-build-oil-refinery-complex-for-18.5-billion#:~:text=HANOI%20%2D%2D%20PetroVietnam%20Power%2C%20a,be%20up%20to%20%2418.5%20billion.

Proposal to invest in an oil refinery complex and Vietnam's national crude oil and petroleum storage depot

https://vietnamenergy.vn/proposal-to-invest-in-an-oil-refinery-complex-and-vietnams-national-crude-oil-and-petroleum-storage-depot-29280.html

1) Refinery with a capacity of 12-13 million tons of crude oil per year

In PVN estimate, the investment capital of phase 1 is 12.5 -13.5 billion US$

.......

The above means US $ 13 billion for a refinery with a capacity 210k bpd.

HY at half the capacity shall be valued at at least US $ 5 billion then.

The Zaporizhzhia Nuclear plant has energy producing capacity of 5700 MW

https://en.wikipedia.org/wiki/Zaporizhzhia_Nuclear_Power_Plant#:~:text=The%20plant%20has%206%20VVER,output%20of%205%2C700%20MWe.

If they are going to replace the energy with fuel from crude oil, its equivalent to increase in fuel demand at 100,000 bpd (refined oil consumption)

no wonder russia was reducing diesel exports earlier

https://24.kg/english/242602_Russia_cuts_diesel_exports_amid_rising_prices/

Russia wants to disconnect power plant from Ukrainian grid - Ukraine energy company

www.bbc.com/news/live/world-62603741

Energoatom, the state power company that operates the plant, says the Russian occupiers are preparing to stage a "large-scale provocation" there.

It also says the Russian military is looking for suppliers of fuel for diesel generators, which would need to be turned on if power units are shut down.

All station personnel - except for those essential to the running of the plant - have been told to stay at home.

https://cyprus-mail.com/2022/08/19/ukraine-says-russia-plans-to-disconnect-nuclear-plants-power-blocks-from-grid/

“There is information that the Russian occupation forces are planning to shut down the power blocks and disconnect them from the power supply lines to the Ukrainian power system in the near future,” the Ukrainian statement said.

“The Russian military is currently looking for fuel suppliers for the diesel generators, which are supposed to turn on after the power units are shut down in the absence of an external power supply for the nuclear fuel cooling systems,” it said.

The vast nuclear power plant, Europe’s largest, was captured by Russian forces in March, but it is still staffed by Ukrainian technicians, though only two of its six reactors are working at full capacity.

Turning the plant off would pile new pressure on Ukrainian supplies, particularly in the south. Ukraine is already bracing for its most difficult winter since independence and preparing for a possible energy shortage.

HY refinery margin update - 19/08/22
.........................................

Diesel: https://www.tradingview.com/symbols/NYMEX-GOC1!/

Jet Fuel: https://www.tradingview.com/symbols/NYMEX-ASD1!/

Gasoline Mogas 92: https://www.tradingview.com/symbols/NYMEX-D1N1%21/
Gasoline Mogas 95 premium: https://www.tradingview.com/symbols/NYMEX-SMU1!/

From above:

1. Diesel at 46% yield, cracks USD 42.98/bbl
2. Jet fuel at 7% yield, cracks USD 34.54/bb
3. Gasoline Mogas 95 at 35% yield, cracks USD (11.35 + 3.84) / bbl
4. Rest of product yield at 12%, using Mogas 95 cracks USD 15.19/bbl

Gross refining margin:

= (0.46 x 42.98 ) + (0.07 x 34.54) + (0.35 x 15.19)+ (0.12 x 15.19)
= 19.77 + 2.42 + 5.31 + 1.82
= US $ 29.3 / brl
.................

Gross Profit at above derived present refining margin of US $29.3/brl

= (10.7 million barrel sales per qtr) x ( US $29.3/brl) x (MYR 4.4/USD)
= 1.379 Billion MYR
...................

https://www.theguardian.com/world/2022/aug/11/russia-oil-production-sanctions-limited-effect-ukraine-war

However, the IEA said the EU embargo on Russian crude and product imports, which comes into full effect in February 2023, would result in “further declines” as about 1m barrels a day of products and 1.3m barrels a day of crude “would have to find new homes”.

Meanwhile, with natural gas and electricity prices soaring, “incentivising gas-to-oil switching in some countries”, the IEA has raised its estimates for 2022 global oil demand growth by 380,000 barrels a day, to 2.1m barrels a day.

The global heatwave has also seen an increased oil burn in power generation, especially in Europe and the Middle East but also across Asia.

The report added: “EU members have committed to reducing their demand for gas by 15% from August 2022 to March 2023. We estimate that this will increase oil consumption by roughly 300,000 barrels a day for the next six quarters.”

The above is not a dream... it is ACTUALIZED by similar capacity neigbouring refinery:

https://www.listcorp.com/asx/ald/ampol-limited/news/4q-2021-lytton-refinery-performance-update-2657819.html

https://www.listcorp.com/asx/ald/ampol-limited/news/2q-2022-lytton-refinery-performance-and-trading-update-2736295.html?ref=more_news

The Lytton Refiner Margin (LRM)1 for the second quarter reached the unprecedented level of US$32.96 per barrel, materially higher than the US$10.59 per barrel realised in the first quarter. The significant increase in Singapore Weighted Average Margin (SWAM) was the key driver of the increase, reaching US$33.62 per barrel for the quarter

https://www.indoasiancommodities.com/2022/08/03/psu-indian-oil-sold-petrol-at-rs-10-a-litre-loss-diesel-at-rs-14-posts-rs-1992-cr-net-loss-in-q1/

“IOC (Indian Oil Corporation) reported an 88 per cent year-on-year decline in its standalone EBITDA to Rs 1,358.9 crore and a net loss of Rs 1,992.5 crore, despite record high gross refining margins (GRMs) of $ 31.8 per barrel for the quarter.

https://www.hydrocarbonprocessing.com/news/2022/07/binh-son-refinery-q2-net-profit-soars-to-424-mm

Vietnam's Binh Son Refining and Petrochemical recorded net profit of $424 MM in the second quarter, up by nearly six times from a year earlier, the company said on Tuesday.

Binh Son, which owns a 130,000-bpd refinery in central Vietnam

Gross Profit at above derived present refining margin of US $29.3/brl

= (10.7 million barrel sales per qtr) x ( US $29.3/brl) x (MYR 4.4/USD)
= 1.379 Billion MYR
....................

Correction:
...........

we shall use Mogas 95 instead of Mogas 92 with a premium of about US $4/brl

https://www.tradingview.com/symbols/NYMEX-SMU1!/

and the avg of the remaining products matching Mogas 95 as a minimum

Revised refining margin calculation:


= (0.46 x 42.34 ) + (0.35 x 15.91) + (0.07 x 34.10) + (0.12 x 15.91)
= 19.46 + 5.56 + 2.38 + 1.90
= US $ 29.3 / brl

I really wish all of HY debt is cleared soon..


Posted by probability > Aug 18, 2022 10:34 AM | Report Abuse X

spiked as predicted:

https://www.tradingview.com/symbols/NYMEX-GOC1!/

https://www.tradingview.com/symbols/NYMEX-D1N1%21/

https://www.tradingview.com/symbols/NYMEX-ASD1!/


1. Diesel cracks USD 42.34/bbl
2. Gasoline crack USD 12.04/bbl
3. kero-jet cracks USD 34.10/bb


Yield Basis: Gasoline 35%, Diesel 46%, Jet fuel 7%, the rest 12 % at crack of 10 USD/brl

Refining margin:

= (0.46 x 42.34 ) + (0.35 x 12.04) + (0.07 x 34.10) + (0.12 x 10.0)
= 19.46 + 4.21 + 2.38 + 1.2
= US $ 27.3 / brl

Natural Gas Shortage Fears Buoy US Market as Winter Reserves Lag

https://www.bloomberg.com/news/articles/2022-08-17/natural-gas-shortage-fears-buoy-us-market-as-winter-reserves-lag#xj4y7vzkg

Germans brace for two ‘stressful’ winters amid gas shortage

https://www.thevibes.com/articles/business/68936/germans-brace-for-two-stressful-winters-amid-gas-shortage

“It’s not just about one winter but rather at least two. And the second winter could be even harder,” he said.

“We’ve got to save a lot of gas for at least another year. To put it clearly: it’s going to be at least two stressful winters.”

He said shortages in the cold months of 2022-23 were “probable” in some regions.

“The shortfalls will probably be temporary at first and then could stop or return repeatedly,” Mueller cautioned, meaning that gas might have to be transported to stricken regions of the country.

Germany is heavily dependent on Russian gas and has seen deliveries drop sharply amid tensions over the Ukraine war.

@sslee, last time when Petron Corp delivered 5.6 billion peso in Q1 2017, the split to PetronM was as per the following summary:

Refer the first part of the table only.

https://klse1.i3investor.com/blogs/Insight1/2017-08-14-story129916-What_Petron_Corp_results_means_for_PETRONM_Q2_21_cents.jsp

If refinery margins are high, will that mean PetronM profit will be lesser? Not sure how to conclude for PetronM

how to calculate weighted average refining margin:
................................................

Yield Basis: Gasoline 35%, Diesel 46%, Jet fuel 7%, the rest 12 % at crack of 10 USD/brl

Refining margin:

= (0.35 x 10.641 ) + (0.46 x 41.46) + (0.07 x 32.30) + (0.12 x 10.0)
= 3.72 + 19.07 + 2.26 + 1.2
= US $ 26 / brl


Posted by hng33 > Aug 17, 2022 10:03 AM | Report Abuse

As of latest up-to-date crack spread level now, obly gasoline crack spread adjust more significantly from peak level, but still remain above USD 10 which is still command fat profit margin. The other two crack spread index remain at elevated level, at multiple year high upper range

1. Gasoline crack USD 10.641/bbl
2. diesel cracks USD 41.46/bbl
3. kero-jet cracks USD 32.30/bb

www.listcorp.com/asx/ald/ampol-limited/news/4q-2021-lytton-refinery-performance-update-2657819.html

4Q 2021 Lytton Refiner Margin UpdateThe Lytton Refiner Margin (LRM)1 for 4Q 2021 was US$11.24 per barrel, significantly higher than the third quarter margin of US$6.76 per barrel. Singapore Weighted Average Margin (SWAM) rose above the 5-year historical average, reaching US$12.79 per barrel in 4Q 2021, as regional refining supply and demand fundamentals improved. This was significantly higher than the US$7.67 per barrel for 3Q 2021.

....

Note how they say 'weighted average' above and that its the highest in last 5 years even at US$12.79/brl in 4Q 2021


Posted by hng33 > Aug 17, 2022 10:03 AM | Report Abuse

As of latest up-to-date crack spread level now, obly gasoline crack spread adjust more significantly from peak level, but still remain above USD 10 which is still command fat profit margin. The other two crack spread index remain at elevated level, at multiple year high upper range

1. Gasoline crack USD 10.641/bbl
2. diesel cracks USD 41.46/bbl
3. kero-jet cracks USD 32.30/bb

However, margin above is not accurate as they have petrochemical & retails

The above is in Australia, and the below is in Vietnam

https://www.hydrocarbonprocessing.com/news/2022/07/binh-son-refinery-q2-net-profit-soars-to-424-mm

Vietnam's Binh Son Refining and Petrochemical recorded net profit of $424 MM in the second quarter, up by nearly six times from a year earlier, the company said on Tuesday.

Binh Son, which owns a 130,000-bpd refinery in central Vietnam

........


130,000 bpd refinery means, 11.7 million barrels per qtr.

refining margin:
= Profit / sales volume
= $424m/11.7m
= $ 36/brl

Look at Ampol refinery's historical refining margins:

4Q 2021 Lytton Refinery Performance Update

https://www.listcorp.com/asx/ald/ampol-limited/news/4q-2021-lytton-refinery-performance-update-2657819.html

Q2 results, 19 July 22'

https://www.listcorp.com/asx/ald/ampol-limited/news/2q-2022-lytton-refinery-performance-and-trading-update-2736295.html?ref=more_news

1 barrel = 159 liters

Even Ampol throughput volume is about 9 million barrels per qtr, very close to HY

Jangan lihat harga minyak, klu turun lagi mantap!

Tengok crack spread saja udah cukup...

Sekarang, merekah besar lagi spread nya...

Esok, kemungkinan besar angka dibawa mencecah atas 41 $/brl

https://www.tradingview.com/symbols/NYMEX-GZ1!/

even if i try to give up for Q2 results, Q3 results is still giving hope unfortunately...ha ha

HY cannot run away from our predictions...looks like :)

If a refinery situated in Australia is basing Singapore platts margin, why can't a refinery from a neighbour country just a few KM away?

with the profit HY will make, it can even buyout shell retails in Malaysia...

Well thats what they are doing now in Sri Lanka:

https://www.republicworld.com/world-news/rest-of-the-world-news/chinas-oil-giant-sinopec-eyes-business-in-sri-lankan-gas-and-energy-market-amid-crisis-articleshow.html


China's largest oil and energy corporation, Sinopec, is looking at retail business opportunities in the Sri Lankan fuel market as the South Asian island continues to suffer a stifling economic crisis.

@NoviceJ & @ValueInvestor88, best of luck... I am with you

Great thing about the above news is, Ampol also reported about the same gross margin HY had reported for Q1 22.

Lets pray for the best for Q2 22'.

https://www.bunkerspot.com/asia/56744-asia-pacific-ampol-reports-huge-refining-margin-hike

Australia’s Ampol has reported that the refining margin for its Lytton refinery reached the ‘unprecedented level ‘of US$32.96 per barrel in the second quarter of this year – up threefold from the US$10.59 per barrel achieved in the first quarter, and a five-fold increase on the $6.29 per barrel reported for Q2 2021.

In a statement issued today (19 July), Ampol said that the ‘significant increase in Singapore Weighted Average Margin (SWAM) was the key driver’ for the margin hike

..


for HY , we only avg 13 USD/brl for RM 1 EPS, sad to see investors dumping the shares...

by the way live data indicates margins are exploding again at the moment.... tomorrow we shall see the diesel crack spread chart further strengthening from 40.36

https://www.tradingview.com/symbols/NYMEX-GZ1!/

u mean they always have big jump in gross profit from qtr to qtr but hedging will wipe it out completely?

in the same sense i wish there is a company where they will report big loss in gross profit but hedging will save them to report bigger gain..

if the former can exist, i guess latter can too by the same principle

Post removed.Why?

Fantastic - oil price dropping and crack spread rising on live data!

This what we want - LOW OIL PRICE!!

Posted by probability > Aug 12, 2022 4:19 PM | Report Abuse X

Hope investors get the clear message that, as a refinery , HY need crude oil price to be low to sustain demand to an extent that the constraint becomes refining capacity instead of crude oil availability - only then crack will remain strong.

Morgan Stanley Upgrades Thai Oil Public Listed Co. to Overweight as Refining Upcycle Remains

15/08/2022

Read More: https://www.kaohooninternational.com/markets/515261/

Although headline refining margins have volatility of 25% daily in Asia, MS believed strength in diesel margins and quick recovery in gasoline margins in the past few weeks does underline marginal cash cost economics in play as the majority of global refiners are struggling to raise their utilization rates.

In this regard, Morgan Stanley upgraded TOP’s rating to Overweight and raised target price to THB65 from THB57 per share as the company has the highest exposure to middle distillates, among Asian refining peers and should be a key beneficiary of the upcycle in refining margins over 2023-24.

If gasoline crack drops too low, simple refiner will reduce output (or even stop producing) affecting even diesel availability on the market, thus supporting complex refinery margin who can produce more Diesel.

I.e, the simple refiner gets the damage first due to the negative crack spread of fuel oil.

Well summarized John, thanks

Any higher GP reported than $1,056 will result equally higher hedging loss to give back the same after hedging loss of $956.

Just some notes from below link why it matters the complexity refinery (complex vs simple refinery)

https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/petrochemicals/072722-refinery-news-roundup-some-maintenance-continues-in-russia

As of June 30, complex refining margins increased 160% from February 22 to Rub21,000/mt ($382/mt), while simple refining margins quadrupled, reaching Rb5,000/mt over the same period, Petromarket told S&P Global Commodity Insights.

Finding alternative outlets for fuel oil and the switch to bitumen production in the summer months has also provided a relief to less complex refineries whose storages were flooded with fuel oil as international buyers avoided taking it, according to market sources. However, the situation might reverse again as the road repair and construction season ends with the advent of cold temperatures, and refineries increase fuel oil production.

No gloves stock had hit such high EPS we are estimating and unlike gloves, no one is going to build refineries in a year....

No one will invest in new refinery - pretty sure on that. I think nuclear fission is the next future of energy....

So, if you ask me what i will bet as the PBT as the most closest figure, i would say ~700 million.

However, be prepared knowing HY will always come with some unexpected costs...he he

lets not have too much expectation. Lets just aim EPS of RM 1....

With Hy proving such profit and market later realizing that full implementation of russian oil restriction will only take place end of the year like what @information had shared... HY should at least hit RM 10 as long term visibility would be there.

Take note to take out about 80 million MYR from the gross profit as the cost of production (the utilities cost of production like natural gas, chemicals etc) before arriving at other expenses such S&A, D&A, Interest etc of another 100 million MYR.

However, my derivation above of 956 million (after hedging loss) is based on data published for actual refinery producing 10 % Fuel Oil yield which has a 'negative' crack spread of above 20 USD/brl and Diesel yield of only 34%.

Whereas HY has yield of 46% for Diesel and 2% for Fuel Oil.
As such, the actual refining margin of HY can be much higher than the above derivation.

@john, as you are aware Q2 PAT (gross profit after taking out the hedging loss), shall be based on gross profit of Mar 22', Apr 22', and May 22' referring to average crack spread data on these months.

As such the peak crack spread of June 22' will be reflected on July 22' PAT.

The gross profit (before hedging loss) reported in Q2 however, will have the figures of Apr 22'. May 22 and Jun 22'.

......

Though the crack spread for Jun 22 is phenomenal, and it was not available to take into consideration on my derivation below early Jun 22, it does not matter since it will have the same 'phenomenal rise' in hedging loss to deliver almost the same Gross profit minus hedging loss of MYR 955 million as derived on link below:

https://klse1.i3investor.com/blogs/2017/2022-06-11-story-h1624320379-HENGYUAN_derivatives_loss_on_Q1_22_completely_clarification.jsp

spot on, thanks
Posted by stockwin > 17 seconds ago | Report Abuse

As we are only 2 weeks away before end of August, we can safely say that Q3 explosive result is in the bag now.
So we are staring at Q2 and Q3 2022 eps of at least RM1 per quarter. Logically that should be the case.

If any of you doubt that HY could have increased its Diesel yield to 46% as it was for the previous year, you can assume its just 39% and add Jet Fuel at 7% which has relatively similar crack spread. As such the above simple derivation will likely hold true as a 'bottom low possible gross profit' for conservative estimates.

Guys, as predicted crack spread had hit above 40 USD/brl

https://www.tradingview.com/symbols/NYMEX-GZ1!/

Posted by probability > 15 hours ago | Report Abuse

DIESEL crack spread is again exploding on live data, you will likely see the crack spread figure on chart below exceeding 40 USD/brl by Monday:

https://www.tradingview.com/symbols/NYMEX-GZ1!/

HY produces 10.7m barrel of sales per QTR. Gross profit from Diesel alone at 46 % yield:

= 10.7 million barrel sales x ( 46/100 yield of diesel) x (37 USD/brl crack ) x ( 4.40 MYR/USD exch)
= 800 million MYR gross profit