I suspect the capacity is not all for popular products like petrol and LPG. so it won't make sense if they ramp up the utilisation rate and produce other refining products which have lower demand

I think now the expectations of a ramp up in future production outweighs the concerns over their current financials or valuations. last q results out price didn't really react could be a sign

agree with 逍遥子. at the end of the day cashflow is what comforts me for this company

it's always good to win contracts, no matter the amount. but now ekovest has grown to such size that RM79m probably won't excite the markets that much. just focus on the big picture

if today can close above 1, that would be a good base to launch further upwards

inventory gains/losses will affect the refining segment profit but I don't consider it as core because price fluctuates all the time. more importantly is they are making decent profit (spread) from refining process and are selling well to end customers.

that said, of course you don't expect 40c eps every quarter (can you imagine RM1.60 eps a year!). I think per quarter 20-30c would be great enough for now, and use their cash generated to pay off all borrowings and reward shareholders. as to how much PE the market wants to give them we don't really have control, but last quarter did show that market can't ignore good financials forever

just my 2 cents

based on my understanding, the main factors to watch will be retail petrol price (marketing), refining spread and crude oil price (refining).

comparing 3Q16 vs 4Q16 vs 1Q17 so far

Retail price: 1.75,1.75,1.70 vs 1.80, 1.95, 1.90 vs 2.10, 2.30, 2.30
Average Refining spread (Tapis): 4.90 vs 6.78 vs 8.47
Closing crude oil price (USD): 49.1 vs 56.8 vs 52
Closing crude oil price (RM): 203 vs 255 vs 231

seems like market still reeling over yesterday night's drop in oil price. brent futures is rallying now but not much interest in O&G stocks

i feel some pressure now. petron CB buy at own risk ya cause it's really a high risk high return trade. fundamentals are there but you can never know the short term mood swing of prices

crude oil bounced back on API data. this is the precursor to today's weekly EIA data, occasionally there could be discrepancies between the two but mostly similar trend

major shareholder sell some shares to institutional funds. like I said, big funds are slowly buying in

price movement not supported by fundamentals, so cannot sustain

it's not worth trading on this stock, you can't really make money with a few cents movement. if you are investing, then you just need to be aware of the potential returns and the risks involved. it's impossible to always time the market correctly and collect at its bottom

slow and steady up is good, bullish sentiment on construction sector also helps

if possible, I don't think company will want to let the price fall below ESOS 1.30 price, will affect employee's mood, haha

and just to highlight for those who are unaware, these are call warrants issued by investment banks, unlike those issued by the company. so the IBs are legally allowed to do "market-making" or market manipulation as I sometimes see it, so just be aware of what you are investing in.

of course if uptrend resumes then no market manipulation can stop it

if you observe the buying volume during the period after results, there were serious volumes first at 5.70 then next day around 6.10, so big money were at those two levels. these few days the volumes were considered very low compared to those up days. personally I think that's the price level those investors/operators/speculators are building on, just waiting for another catalyst to push up

just based on the construction schedule. quarter on quarter sometimes there may be delays but over a few quarters will tend to even out

even after his past week the price was affected by oil and gas sentiment, I'm not worried about petron's fundamentals. for CB the only concern is petron's price may not reflect its fundamentals before the expiry. so if more conservative then should go for mother

yes it's very short, it's a high risk high return trade so should not buy too much. July expiry is after May results release, so if 1Q17 results is as expected, there could be a rebound. who knows, maybe even one day gain could erase all these days' losses.

last year effective tax rate was abnormally high, this year should normalise. construction still full steam ahead, O&G and property should still be profitable plus plantations losses will continue to narrow.

earnings prospects are looking good, wouldn't be surprised if earnings could double this year

happy for everyone. ekovest give angpow so spend wisely ya. don't assume this will happen everyday

market crazy now

shell down, petdag up. how can shell, a pure refining company, fall less than petron?

let them flush, last time ekovest-wb I also kena flushed from 1.30 down to 1, now it's more than 2.50 adjusted. patience do rewards when it's a good counter

from what I discovered so far, crack spread is the best indicator since it measured the spread between your input cost (crude oil) and output price (diesel, gasoline etc.). although shown as one data, it has more than 2 variables as each commodity has its own supply and demand dynamics

this 2 day's sharp drop in crude oil is mainly because of EIA weekly data showed huge increase in crude supply relative to analyst expectations. but if you look at gasoline (petrol) inventories, the drawdown (not oversupply) is bigger than analyst expectations. that's why gasoline futures actually didn't drop as much as crude oil futures and thus the crack spread is widening these two days.

it's worthwhile monitoring different data instead of just crude oil

short term no excitement if no good news or operator not interested to push. just relax and wait for dividend and next qr then

the owner and the big funds are buying like no tomorrow. really crazy

so tempted to add

http://www.reuters.com/article/us-usa-oil-eia-idUSKBN16F1XL

no problem. to be fair, crack spread did weaken in Mar before slowly recovering these few days. but ytd, the average is still higher than 4Q16 and 3Q16

harris started selling at around 1.30 (before dividend and split), can't believe today it's already 1.30 again after dividend and split hahaha

this counter seems to have a very strong operator based on the price movement before last results. surge up within days then press down like crazy just before the results before going limit up. just let them flush enough first before the next climb

the expansion makes sense since gasoline future dropped less than crude oil futures. futures price you can get from CME website

@逍遥子 I rely on my friend to get it from Bloomberg

you are right when you said that UiTM could have borrowed directly themselves to fund it but the reality is they did not. you are also right to say that after Triplc borrowed the amount, they have to bear the construction risk, cost overrun risk etc.

the economic reality is UiTM did not borrow themselves and they do not own the assets until the end of the concession period. the sukuk carries interest of 5-6%, but Triplc won't charge UiTM for just 5-6%, they will charge more on top of the construction margin to compensate them for all the trouble they have to go through and the risk. and when Triplc has the cash, any interest income they keep and doesn't go to UiTM.

the difference with your example is that UiTM did not secure the financing themselves. it's more like you bought a house using mortgage. so if the bank had borrowed the sum to lend you, your repayment is not to settle the borrowed sum, but the mortgage loan. banks gets the sum and pass it to you. while you pay them, they pay their lender and earn a spread over it. and if they can get the sum in the first year but only release the sum over 3 years, there's value to them in the first 3 years

Triplc owed the lender and UiTM owed Triplc. it's 2 different economic transactions and cannot be mixed into 1. I think you are overly focused on eventual ownership, put it simply, you can think of it as Triplc effectively owns the asset during the concession period and they own the debt and they are liable to pay for it. just like you don't legally own the house until you settle the mortgage.

the debt is obtained solely for the project and will be settled during the concession period. the entire amount will be spent in the first 3 years for this concession alone, after that is repayment
the PV of the debt is not dependent on future projects because the real value is you can get financing for this concession without forking out your own money. I'm not looking at the point of view that the amount can be distributed to shareholder but more like the shareholders do not have to fork out any money.

there was initial concerns among industry players that IFRS15 could change the way of revenue recognition but after the feedback, you will realise that IFRS15 is almost the same as the current IAS11. concession revenue has separate standards under IC12 and I'm not sure if that will change. but since there's little difference between IFRS15 and IAS11, I assume IC12 is to stay

what kind of MNC cannot afford RM2.4m? that's like less than 600k USD hahaha

just an observation. 1.50 is the reference price so you can understand why IWC surged from 80c to 1.64. but I'm afraid insiders bought early and at the last leg retailers just bought without inside info. yes the land has tremendous value and RNAV looks tempting but the problem is this is technically the value after xx years when it is unlocked. if your are investing for the next 20 years, maybe that's value but most market players are not. it is quite common for property counters to trade at big discount to RNAV

so up or down, let's see

the spread actually expanded overnight. crude oil (input) fell by 5% but gasoline (output) only fell 1.6%

wow just mentioned about topping up, havent' act already up. looks like ekovest doesn't wait. today also funds buying ahmad zaki, another mini ekovest?

it's hard to estimate cashflow because it hinges on so many items including working capital. but it does seem like petron can get RM250-300m in free cashflow (operating - investing before debt repayment) every year. that's more than 15% of their current market cap. moreover, that could increase if profits increase and their reinvestment needs reduce.

dividends they have the capability to pay and I do believe they can increase yoy but they might not want to increase too much in a year to manage shareholders' expectations. again I think short term just ride on the bumper earnings, longer term ride on its strong cashflow

for those who wants to collect but afraid it will correct further, then top up in stages. drop further, collect more. rebound, then just rejoice and enjoy. no point thinking of "what could have been"

not sure whether the cheaper light oil directly benefits petron. but based on that article, it seems like asia buyers should benefit from that. if that's true, then the stars seem to be aligning for petron for this year

I think petron is currently undervalued because institutional investors are still unsure how to value it (refining+retail). plus there was a period of earnings volatility. but from a cashflow perspective, things will be clearer, it's a strong free cashflow machine.

now is time to be patient, wait till next quarter another good results then maybe finally market will re-rate it upwards.

it's like what DK66, in concessions you rarely own the assets at the end. most concessions run on the build, operate and transfer method so eventually ownership will be passed back to UiTM or whoever that grants the concession.

Try to think of it this way, BOT is essentially a construction plus financing scheme. in a vanilla construction contract, Triplc construct and will get paid. here, UiTM does not want to pay the lump sum in the early years, instead they want to stretch the payment over a longer period, so effectively they have to pay a higher amount to compensate Triplc, similar to a loan

the value of the concession to Triplc is not dependent on whether they will own it, but how much value (earnings and cashflow) can they extract during the concession period. just like orderbook for construction, you don't own the building but you get profit and cashflow from the order, that's your value. concession is similar but stretching over longer period of time

point to note that there are 2 main types of concession. one is like the highways, company build the highway and is granted xx years to collect toll, government doesn't pay anything. second is like most university concession, company build then get paid later in instlalments by UiTM/MOE. first type highway companies will recognise the highway concession assets and fully amortised it over the concession period. second type they never recognise the asset, but instead recognise a financial asset (obligation from UiTM to pay them for works done). like I said, just like a loan.

Triplc belongs to the second type. If you read their annual report, you will see that most of the trade receivables (non-current and current) is that financial asset (discounted PV). take that amount and minus the borrowings, that would be an indication to the value of Z1P2, the previous concession they completed

like you said, DCF is not without its flaws. I personally dislike it because they are too sensitive to a few assumptions but for concession, it is still by far the best method. for normal investors, they will probably look at earnings which Triplc will recognise them soon. I have written on that topic before in a Prestariang piece, you can read them if you are interested to see the earnings impact

decent price now, load some for leverage

have to look at all angles when you think

1. NTA doesn't mean anything if not backed by real assets with value. yes they do own 23% of parkson and some land but nobody really knows about the value of the other assets they have

2. earnings is definitely boosted by one-off income. look at associate profit, that's one off gain from Parkson's results. there's also RM19m other income which is not explained. take that out, then probably you can see the real earnings

3. most importantly is the shareholder intention and capability. the shareholder is in trouble for most of his business and he is not young anymore. does he have the appetite now to secure financing to privatise a cyclical business? very doubtful

looking more reasonable now since the euphoria is over

fund managers are buying, apparently management is very confident of getting a major sensor qualified

give it another 3 months, we may not see Petron below 6.50 anymore