Recession is best tool to cool down oil market

Market responsive is Fed rate hike induce recession to curb inflation outweight oil supply risk

Affin bank director is too greedy asking share grant. The additional share grant now is now pending BNM approval.

Director wanna to get these share grant before declare special dividens foe them to entitle more

Crack spread for gasoline is at historical lowest range USD 3-5.

In contrast, dissel and jet fuel crack spread are at historical high range.

In winter time, gasoline is at decreasing demand, but, dissel is higher due to need to replace gas

Based on current gasoline crack spread of just USD 3-5 range, RON95 actually should lower instead of increase.

Only dissel and jet fuel are at elevated level. Gov can increase dissel retail selling price in accord to international crack, but, not gasoline which is now at historical lowest range

Based on current gasoline crack spread of just USD 3-5 range, RON95 actually should lower instead of increase.

Only dissel and jet fuel are at elevated level. Gov can increase dissel retail selling price in accord to international crack, but, not gasoline which is at now at historical lowest range

Added more HLC at 6.17-6.18

The schedule is early 2023 according to annual report

After 2018, next 5 year major shutdown maintenance is next year 2023

Also reminder to all hengyuan shareholder, that hengyuan refinary plant will under major 5 year plan shutdown for maintainance in early 2023. If you plan to hold for 1 year or more, please take note of it ya

Refiner profitability dependent on triple parameters.

1. Average crack spread - Q3 crack spread is lower than Q2, but still much higher than breakeven cost
2. Stockholding gain/loss- Q3 crude oil is lower than Q2 by about USD 10/barrel, so, Q3 will incur 1 month stockholding volume loss -USD 10/barrel
3. Hedging/swap contract - Depending on contract expire date or timing of settlement

Remark: All in, EPS in Q3 result is expect to lower than than Q2, but will still higher than corresponding Q3 last year

Today, bursa will approve RHB interim dividend reinvestment plan, 10sen cash + 5sen (reinvestment)

Chairman need to resume buyback to instill minority confident

If without take into accounts inventory loss, mark to realizable value, topglove should record breakeven eps.

Since ASP will increase 5%, there will no more inventory marked down in next Q result forward, topglove will return profitable next Q result

The root cause is oversupply due to aggressive expansion capacity, the demand is resilient and growth every year.

To solve problem, it just need to cut production rate, and collective action among top 4 in Malaysia to limit supply. ASP have bottom, time to rebound back to normalize level, profit margin 8-10% is good enought.

In additional, despite labour cost and gas hike, but major production cost, raw materials have decreasing. Overall, net impact is production cost still on downtrend.

USD stengthen also boost export oriented glove business

China glove manufacturers alrdy stop expansion, and is clearing nventory at below cost.

Glove oversupply is due to glove manufacturers expanding capacity too fast beyond markey can absorb, causing supply/demand imbalances, resulting ASP tumble below cost.

The situation cannot last longer as glove manufacturers have option to stop expansion, decrease capacity by decrease plant utilisation rate.

Once major glove manufacturers collective taking similar action to decrease production, supply and demand will reach balance faster than expected.

Aldy, topglove, a top glove producer have initiated cut plant utilisation rate to below 50%, initial increase ASP 5%.

Malaysia glove maker still control global 65% market share, topglove lead cut production rate, increase ASP will prompt other glove maker to follow, as afterall, its useless to produce glove is is loss making business, no other can sustain even for few quarter

Added second batch RHB at 5.66

Added second batch supermax at 68.5sen

Supermax US glove plants is next key earnings driver as US healthcare policy to gradually self sufficient on healthcare product including glove and mask. Policy to souce local US producr glove and mask to be based on contractual local produce healthcare product.

Alike other industries like semiconductor, US policy now emphasized on self supply by attract direct investment in US, souce on US produce product.

Large new semiconductor plant set up in US also increase glove and mask demand in US

Among all glove stock, supermax balance sheet is strongest. Net cash holding is higher than market capitalisation allow supermax to continue reward dividend to shareholders.

Supermax aldy propsed 3 sen final dividend to be declared next month.

ASP alrdy reached bottom based on topglove latest result. ASP to gradually increase 5% start next month

Dividend yield of mote than 10% now shpuld cushion any further downside risk.

bought supermax at 69.5-70sen

bought HLC at 6.22

Buy and hold is not applicable on cyclical stock

Sslee

This is strategy when deal with cyclical stock

Coming Nov is critical time as winter season reach coldest. Monitor whether EU situation, whether or not will reach deal with Russian to resume gas supply as Ukranie war may temporary easefire. Iran nuclear deal and easefire could press down gasoil crack spread

Hengyuan share price finally normalize back to pre-limit up level at RM 4.30. But, no hurry, still have 2 month time grace period to re enter back if cycle repeat that share price move up a week ahead before Q result release end of Nov.

In the meantime, just monitor closely crack spread for gasoline, gasoil and kerosene in next 2 month. The most important guide is whether gasoil and kerosene crack can sustain, or follow gasoline crack normalize back in next 2 month. Opt right timing to re-enter to avoid sudden reversal crack spread risk.

Banking is best stock selection in time of rising interest rate. Affin pending special dividend is major catayst to propell stock move above resistance level at RM 2.30

Banking is best stock selection in time of rising interest rate.

Interim dividend 15sen will be declared by end of month. RHB dividend yield 7%, is one of the highest among all stock listed in bursa.

bought RHB at 5.64

better focus on banking stock, every interest hike translate to higher net profit margin

Palm oil is commodity, pure commodity stock like TSH unable to fetch high valaution due to cyclical business nature

I know some of Indonesia planted land is actially co-share by their native people, profit is sharing under certain ratio and land is lease for only for 30 year.

Calvin

You mean TSH only sold just quarter of its kalimantan land only?

Calvin

TSH sold kalimantan land, wonder how many land areas still available near Indonesia new capital, can you highlight?

Preserve cash while awaiting right timing to re enter.

Time also needed to monitor sustainability crack spread for both gasoil and kerosene in next 2 month.

No hurry, still have 2 month time grace period to re enter back.

Confirmation petronM upcominv Q3 result can ascertain ahead via its holding company, petron corp which tend to announce beforehand.

Very soon, the payment date must before end of Dec 2022.. It left only 3 month for announcemnt

1. Annocement date special dividend: Sept/Oct
2. Ex-date for dividend: Nov
3. payment date: Dec

Once, BNM approve, Director can get more grant share, allow them to entitle special dividend

Director cleverly seek BNM approval to grant them incentive share before offcially declare special dividend.

bought litrak at 4.87-4.89

For trading purpose, TA first, second only FA. Follow chart and next 3 month crack spread before Q3 result, ample time to make decision before re-enter yea.

For trading purpose, TA first, second only FA. Follow chart and next 3 month crack spread before Q3 result, ample time to make decision before re-enter yea.

PetronM return back to below RM 5.00, likely hengyuan will follow too. Still have a lot time to decide whether re-enetr or gove up before Q3 result release.

In the interim, just monitor dayily crack spread for gasoline, dissel, jet fuel in next 3 month. If trend is reversal, time to re-enter back, but if trend continue downward, it time to give up. Stay sideline, enjoy all locked profit taken, await for oppurtunity to to return

PetronM return back to below RM 5.00, likely hengyuan will follow too. Still have a lot time to decide whether re-enetr or gove up before Q3 result release.

In the interim, just monitor dayily crack spread for gasoline, dissel, jet fuel in next 3 month. If trend is reversal, time to re-enter back, but if trend continue downward, it time to give up. Stay sideline, enjoy all locked profit taken, await for oppurtunity to to return

Will buyback on further weakness, to build back position later before Q3 result

Bad sentiment in oil market

Sold armanda at 40sen, locked profit.