I collected 4 to 4.5 sen alot mah!

The future crack spread until Dec 2023 mths....is still above USD 10 mah!

Still Very healthy & profitable mah!

U need to understand this loh!

The CME crack spread is a combination of a mix products of petrol, diesel, jet fuel, base oil , naptha etc mah!

But petrol & diesel is still the main products loh!

The problem is HRC already spend billions to upgrade its plant but it still cannot produce adequate Euro 5 petrol & diesel loh!

What has happen leh ??

Did management again siphon cash....resulting that the refinery cannot perform as original upgrade target loh!

The virtue of over excessive use of derivative of various type....point to the potential kon loh!
Making....it difficult for layman to identify and pinpoint where & what exactly is the kon model employ mah!
Lu tau boh ?
Posted by Johnzhang > 8 seconds ago | Report Abuse

@hng33,
I am not sure at all if HY only hedged it’s raw material ie crude oil as you claim. If you look at the financial account, you will notice that HY uses 4 types of derivative instruments:
1. Forward priced commodity contracts
2. Commodity swap contracts
3. Commodity options contracts
4. Refining margin swap contract .
Among them , 3 and 4 has the highest losses that put through to P&L for Q12022.
I am a layman in derivative . But I think the refining margin swap contracts are for the purposes of locking in refining margins (crack spread) . As crack spread surge month by month it give rise to huge ‘losses’ in this derivative.

Petron’s hedging is a lot more straightforward. They only have commodity swap contract which is essentially used to hedge against price swing in a given commodity like crude .

Post a Comment

Not true mah!

Harapan is trying to salvage & save some of msian finance from unfair contract mah!

If u listen to Tony Pua, msia actually save a massive Rm 20b from this exercise mah!

U need to understand this loh!

PH was conned by DR M mah!

Posted by Tobby > 49 minutes ago | Report Abuse

Posted by qqq3333 > Jun 6, 2022 8:34 PM | Report Abuse

mocking Mahathir is surely BN strategy to stay in power.

Answer : Umno has been winning one by election after another because they keep distance from Mahathir! This old bugger is very suey!
I really don't know why Harapan leaders spent so much time worshiping Mahathir!

Correctloh....people should be encourage to buy more of Petron but not hengyuan which have high risk of corp governance problem mah!

Posted by Sslee > 34 minutes ago | Report Abuse

The crack spread spike up is because the fuel demand is more than the refinery capcity/capability to supply make worst by sanction on Russia crude and fuel products

U need understand this loh!

During time of Shell & Esso....they never employ hedging why leh ??

This bcos msia petrol price pricing mechanism formula already has a natural hedge for crude oil volatility mah!

Why people like HRC want to use the derivative as basis of hedge leh ?

And most of the time HRC lose money from the hedge from the past record mah!

This is another red flag mah!

Posted by hng33 > 5 minutes ago | Report Abuse

hengyuan only need hedging on its input crude oil derivative as it need few week shipment time from various crude source supply. Hengyuan only source 50% crude from local Petronas, another 50% are mainly source from Russian, Arab and Asia. Hengyuan need to protect its profit margin from erode due to volatility crude oil cost.

hengyuan didn't need to hedge its refine end product as it have long term supply taker from Msia Shell until 2026. Most if no all of its refine end product are solely supply to Shell Malaysia.

Therefore, hengyuan hedging loss/gain mainly due to volatility in crude oil. If refine end product price increase as indicate by crack spread, hengyuan will only profit higher in tandem with higher crack spread

John u must understand this mah!
My spy cannot give u substantial info mah!

Just from the surface u can see how HRC kon u mah!

U yourself says....the frequency of HRC occurence losses is unbelievable mah!

Of course mah!
If the business model is to make use of derivative as one of the main business model to sapu money....surely base on analysis it appear on the surface imprudent business hedge loh!

But actually is done to kon & siphon cash thru hedging losses loh!
It is confirmed kon mah!, how come the frequency of derivative hedge has more losses occurence than gain leh ??

Usually it should be 50 ; 50 gain v losses mah!

Posted by Johnzhang > 2 hours ago | Report Abuse

I have compared the P&Ls' of HY from 2016 to 2021 and noticed that the single item in the yearly P&L that swing the nett profit wildly is OTHER OPERATING (LOSSES)/GAIN.
Q12022 ($339 mil) - note : one qtr alone !
FY2021 ($552 mil)
FY2020 $308 mil gain
FY2019 ($61 mil)
FY2018 ($8 mil)
FY2017 $81 mil gain
FY2016 ($6 mil)

Posted by Johnzhang > 5 minutes ago | Report Abuse

@Stockraider,
With due respect , this seem to be an unsubstantiated information spreading from one to another. I treat this as speculation until it is confirmed by HY . It doesn’t help at all to speculate this and that which eventually cloud the clarity every investors are looking for .
———/——————

Stock raider posted :
The key from this Rm 132m write down of Russian crude as i say due to msia govt discourage Russian Crude & shell disallow Russian crude loh!

But the point is the big exceptional losses of Rm 132m is due to massive losses of russian crude of USD 80 purchase compare to the salvage disposal price to china parent at USD 7 mah!.

This is another major red flag investor should aware mah!

Just remember this true profit potential of sapnrg loh!

Do not listen to all these naysayers loh!
Sapnrg is highly undervalue mah!

If there is no fire sale it is worth alot mah!

How do u value Sapnrg potential gain leh ??

1. Current sapnrg share price 5.5 sen @ Rm 879m.
2. Restructuring rebate from banks frm 3.6b or @ 22.5 sen ( base on 35% haircut)
3. Revaluation of OMV 50% share gain of Rm 5.0b @ 31.5 sen
4. Conservative Min wealth creation of sapnrg is Rm 8.6b loh or 54 sen mah!

Remember there are also hidden value in Sapnrg drilling & EPCC business & assets not taken in value here mah!

If we account for this, another potential of 30 sen loh!

Thus sapnrg should be 84 sen fair value loh!

Bcos of uncertainty we discount this 84 sen value aggressively by 70%....thus target price should be at least 25 sen loh!

That will give u a potential massive gain of 19.5 sen....or 354% if u buy sapnrg at dirt cheap at 5.5 sen mah!

Very big profit potential in sapnrg loh!

Talk with common sense mah!

How is armed force veteran, single mum, oku, orphans and old folks got to do with sapnrg leh ?

If u talk rubbish. also must make sense mah!

Posted by i3lurker > 1 hour ago | Report Abuse

many ways to give Free Money to Sapura, besides cut off armed forces veterans benefits
can cut all monthly allowances to Single Mums, OKU including but not limited to blind folks.

orphans, old folks .. all just kick them out to sleep on streets ok jer

can save a lot of Free Money for Sapura.

so just buy with Confidence then drive to Penang Bridge

Of course Raider has my own spy to feed me mah!

But raider give u this simple hint loh....HY only make Rm 47m for q1 31-3-2022 but just 1 transaction from the Russian crude can lose Rm 132m alone meh ??

Just this indication alone already point to very big hanky panky deals loh!

Lu tau boh ?

Posted by lai3bu > 1 minute ago | Report Abuse

Where is the proof sold at USD 7, you are really a stupeeedd cow that talk nonsense

Logic mah!

If u ask from the kon man, how he kon do u think he will reply & give u the info to U genuinely & accurately leh ??

Of course not mah!

Posted by Johnzhang > 8 minutes ago | Report Abuse

@OTB, may I suggest that Ahahah should also check how far forward the derivative contracts are entered into. If 25% of revenue for 12 months forward are hedged at any one time it is equivalent to 3 months revenue hedged at any one time.

Posted by OTB > 2 minutes ago | Report Abuse

Please request, I have no problem.
I want this type of information which I cannot get it easily.
Thank you.

The key from this Rm 132m write down of Russian crude as i say due to msia govt discourage Russian Crude & shell disallow Russian crude loh!

But the point is the big exceptional losses of Rm 132m is due to massive losses of russian crude of USD 80 purchase compare to the salvage disposal price to china parent at USD 7 mah!.

This is another major red flag investor should aware mah!

Of course mah!
If the business model is to make use of derivative as one of the main business model to sapu money....surely base on analysis it appear on the surface imprudent business hedge loh!

But actually is done to kon & siphon cash thru hedging losses loh!
It is confirmed kon mah!, how come the frequency of derivative hedge has more losses occurence than gain leh ??

Usually it should be 50 ; 50 gain v losses mah!

Posted by Johnzhang > 2 hours ago | Report Abuse

I have compared the P&Ls' of HY from 2016 to 2021 and noticed that the single item in the yearly P&L that swing the nett profit wildly is OTHER OPERATING (LOSSES)/GAIN.
Q12022 ($339 mil) - note : one qtr alone !
FY2021 ($552 mil)
FY2020 $308 mil gain
FY2019 ($61 mil)
FY2018 ($8 mil)
FY2017 $81 mil gain
FY2016 ($6 mil)
In the account, it explained this is related to net fair value losses/gain on derivative instruments.
Questions 1 : Why such wild swing starting FY2020 only ? It was a lot more stable and minimum before FY2020. Here, I am asking if there is element of imprudent hedging policy by the management ?
Question 2 : What market development in crude or refined product led to the wild swing from FY2020 and Q1 2022 in particular ?
Although hedging thru derivative instruments are meant to protect profits, there is element of taking a position with risk . The impact can be huge if hedging is excessive and in wrong position.
Would like to hear your professional view.

Posted by Johnzhang > 2 hours ago | Report Abuse

Regarding the inventory write down amounting to $132 mil, some of you link it to Russian oil purchase. Does anyone really have substantiated information on this ? Is this just guessing ?
It could also simply be Brent crude contracted at peak price of around USD120 in 2nd half March and written down to around USD103 which is the Brent crude price at the close of the qtr (31/3/2022). This is mark to market principle most company adopt.
Total write down was RM132 mil or USD31 mil. The mark to market of USD17/barrel (120-103) is equivalent to about 1.82 mil barrels of crude stock which is about 2.5 weeks of inventory.

Already explain mah!
The point u need to focus mah!

Is there a good profit to be made rescuing sapnrg....if yes better rescue loh!

If not other people will make profit instead of msian & govt mah!

Posted by Jkoay > 18 seconds ago | Report Abuse

Better for this Company to go to the graveyard, before taxpayers have to pay their debt

Correct loh....better avoid big tent....if kena betray later lagi teruk mah!

PH Need to work hard & take longer time & no short cut....never mind....as long as can build a govt that have integrity & can be trusted mah!

But if govt still can pay for the subsidy why worry leh ??

If govt remove the subsidy & ask u to pay instead... & then sapu the money save from the subsidy removal.....then we would all be much worse off loh!

Lu tau boh ?

Unique point is that bplant got valuable land of worth more than Rm 2b....if sold can reinvest buying other plantation & pay div as well loh!

Unique point is that bplant got valuable land of worth more than Rm 2b....if sold can reinvest buying other plantation & pay div as well loh!

The point u need to focus mah!

Is there a good profit to be made rescuing sapnrg....if yes better rescue loh!

If not other people will make profit instead of msian & govt mah!

Not audited mah!

Not yr end yet mah!

Management will just write down 1st mah!

After completion....even during yr end...if auditor dispute....management will tell the auditor...no choice....Russian oil.....Msia govt discourage & shell disallow....thus need to sell quickly to salvage some value to avoid total write off mah!

Mgt veli panlai to cook up with booshiit story & the auditor has no choice but to accept management explaination loh!

Lu tau boh ?

Not that true....Sapnrg is trying to be smart....tendering & getting project of low margin and doing project not its core competence like taiwan wind power generation which is a disaster loh!.

The covid issue further compounded its misery loh!

Rubbish explaination loh!

Both write down or write off amount to loss mah!

Write off means u have maximum loss with zero value mah!

Writedown...u already taken a loss.....but not upto the maximum loss compare to write off mah!

Your write down....in future may result in more losses if it further deteriorate but it could also lead to gain.....if situation improve....that may lead to writeback mah!

For Hy....case in respect of russian oil, it is unlikely they will be a writeback of its Rm 131m losses....bcos it has write down to USD 7 per barrel from usd 80 per barrel, for eventually selling to its china parent co mah!

I remember my senior analyst sifu....told me about 3 yrs ago about HY hedging loh!
He says he quite suspicious why HY hedge thru a singapore co.....for crack spread instead of going to CME directly leh ?

He says this are the risk loh;

1. If crack spread is sky high....definitely derivative will lose bigs.....but the co will not see losses bcos their product margin will be high & can aborbed the losses loh!

2. If crack spread fall.....their derivative will not report huge gain....bcos most likely the spore will take a big cut on the derivative margin & pass on a reduce gain to hengyuan loh!

These are the risk & loss of investing n doing hedging thru a 3rd party in spore....a strategy to siphon money mah!

Already explain mah!

They purposely impairment....impairment.....this is just paper figure... impairing from NTA Rm 1.40 loh!....to force the bank to give hair cut in the restructuring exercise loh!

This how the games always played mah!

Lu tau boh ?

The answer is

It is restructuring magic mah!

Lu tau boh ?

Remember the story of Raider as a despatched boy 35 yrs ago ah ?
If refinery cost Rm 1b to Rm 1.8b about 35 yrs ago?
What would cost a similar refinery now ??

Samething loh....if a double story house cost Rm 100k in bangsar 35 yrs ago....today it is worth at least Rm 1.2m loh!

So a refinery will cost Rm 3b to Rm 5b now loh!

So investing in Petron refinery is quite safe at current price mah!

Posted by stockraider > 42 minutes ago | Report Abuse

I remember when i was a despatched boy....more than 35 yrs ago....that time 11 yrs ago....that time 1 lit of petrol only cost 62 sen mah!

I only spend about Rm 20 to 30 per mth on my motorbike going here going & there & make Rm 80 to 90 on my fuel allowance loh!

There is no craps on fuel subsidy loh!

Esso & Shell refinery makes eps of 30 sen to 60 sen pa & the share price is Rm 3.50 to Rm 6.00 mah!

U know or not ah ??
These senior elite melayu are proud people mah!
3 yrs ago, did they ask the bank for hair cut leh ? No mah! Bcos they think, they are very smart mah! They think can turnaround without debt restructuring loh!

It is proven they are wrong mah!
This time debt restructuring with hair cut from the banks are required mah!

Posted by billionman > 1 minute ago | Report Abuse

Restructuring mode should hve been triggered 2-3 years back..when being injected vitamin $2.8 billions by big Papa....why now...too late..after rounds after rounds ceo and bod appointed..cessation...then appointed new set....exit..appointed ..too tired..yet still ship more holes..how???

Yes if Petron hedge we can trust loh!

But not hengyuan mah....they use hedge to sapu more money loh!

General Raider had share enough loh!
If people want to be rich u may consider buy sapnrg at 5.5 sen loh!

Do not fear mah!
Do your own research to improve your confidence loh!

Ding Dong profit mah!

If u hedge....u want to flatten the ding dong profit mah!

To dong....dong .....dong profit trend mah!

Posted by MoneyMakers > 47 seconds ago | Report Abuse

Aiyoyo company willing swallow derivative/hedging loss - means they worried crack spread drop lo

If mgmt confident crack spread consistently stay high, no need buy loss-making derivative/hedging contracts aiyoyo

Correct buy loh!

Jet fuel contribute very small to petron....it is still bread & butter petrol & diesel mah!

Just shut up loh!

Buy mah 5.5 sen loh!

If future drop to USD 10 crack spread.....the big derivative profit will kick in mah!

Can but most people will cut the frequencies loh...!

Bcos many pressing financial challenges....need to cut cost with high petrol price mah!

It is restructuring magic mah!

Lu tau boh ?

Posted by Understand > 2 minutes ago | Report Abuse

Ahyo come on la 2years covid petronas ceo can do magic ka. Vomit blood...really

Yes can afford to drive to work but would not simply go here go there mah!
Posted by Sslee > 10 minutes ago | Report Abuse

Posted by stockraider > Jun 6, 2022 10:49 AM | Report Abuse

Rubbish lah!

U think Petroleum price at Rm 4.50 to Rm 5.00 per litre from current Rm 2.05 per litre people can afford to pump more meh ??

Consumption will drop 35% to 50% loh!

Question:
Stockraider can you not drive your car to work?

Hair cut for banks is a must mah!
Bcos the banks already provided upto 70% or Rm 7b for the loan losses loh!
If the banks agree to give rebate or hair cut of 35% , they will recover Rm 3.5b mah!

This will increase the banks profit and give additional increase yr end bonus for the bankers mah!

Win win mah!
Who want to complain & do not agree when the deal is favorable for every one leh ?

Those complain too much will be demoted or sacked mah!

I remember when i was a despatched boy....more than 35 yrs ago....that time 11 yrs ago....that time 1 lit of petrol only cost 62 sen mah!

I only spend about Rm 20 to 30 per mth on my motorbike going here going & there & make Rm 80 to 90 on my fuel allowance loh!

There is no craps on fuel subsidy loh!

Esso & Shell refinery makes eps of 30 sen to 60 sen pa & the share price is Rm 3.50 to Rm 6.00 mah!

I remember when i was a despatched boy....more than 35 yrs ago....that time 11 yrs ago....that time 1 lit of petrol only cost 62 sen mah!

I only spend about Rm 20 to 30 per mth on my motorbike going here going & there & make Rm 80 to 90 on my fuel allowance loh!

There is no craps on fuel subsidy loh!

Esso & Shell refinery makes eps of 30 sen to 60 sen pa & the share price is Rm 3.50 to Rm 6.00 mah!

Btw u think Henguan stuped meh ??

If they sell Q2 at USD7.....it will be recorded as in the overall revenue of HY mah!

They would not disclose a separate item of sell of Russian oil at USD 7 mah!

Posted by Sslee > 9 minutes ago | Report Abuse

If Hengyuan already sold this parcel of Russia crude before Q1 ending on 31th March 2022 then this purchase and sale will be recorded as revenue and purchases.

But if you look at operating cash flow the inventories written down of RM 131,588,000 is added back to operating cash flow. This can only mean the written down is a provision to show Hengyuan reject this parcel of Russia crude (taken out from inventories) that already paid for as purchases.

I might be wrong. Any comment from accountant?

Writedown to USD 7 from USD 80m 1st qtr.....with a loss of more than Rm 130m already recorded mah!

Not necessary HY will sell in Q1 at USD 7 mah!
If they sell in Q2 at USD 7 to the china parent in q2 at no gain & no loss also possible mah!

Lu tau boh ?

Posted by Sslee > 9 minutes ago | Report Abuse

If Hengyuan already sold this parcel of Russia crude before Q1 ending on 31th March 2022 then this purchase and sale will be recorded as revenue and purchases.

But if you look at operating cash flow the inventories written down of RM 131,588,000 is added back to operating cash flow. This can only mean the written down is a provision to show Hengyuan reject this parcel of Russia crude (taken out from inventories) that already paid for as purchases.

I might be wrong. Any comment from accountant?

Where got thin air leh ??

The more than Rm 130m russian oil write down by hengyuan is very true mah!

Correctloh....what airasia own leh ?
Nothing mah!
Even the airlines, it just lease mah!

Whereas Sapnrg own most of its assets mah

Do not listen to all these naysayers loh!
Sapnrg is highly undervalue mah!

If there is no fire sale it is worth alot mah!

How do u value Sapnrg potential gain leh ??

1. Current sapnrg share price 5.5 sen @ Rm 879m.
2. Restructuring rebate from banks frm 3.6b or @ 22.5 sen ( base on 35% haircut)
3. Revaluation of OMV 50% share gain of Rm 5.0b @ 31.5 sen
4. Conservative Min wealth creation of sapnrg is Rm 8.6b loh or 54 sen mah!

Remember there are also hidden value in Sapnrg drilling & EPCC business & assets not taken in value here mah!

If we account for this, another potential of 30 sen loh!

Thus sapnrg should be 84 sen fair value loh!

Bcos of uncertainty we discount this 84 sen value aggressively by 70%....thus target price should be at least 25 sen loh!

That will give u a potential massive gain of 19.5 sen....or 354% if u buy sapnrg at dirt cheap at 5.5 sen mah!

Msia Refinery just need crack spread of USD 4.5 to earn reasonable profit mah!

Very true loh!
When Airasia embarked on the restructuring its NTA is negative more than Rm 1.00 per share mah!

Sapnrg its NTA is still positive at 2 sen per share loh!

Sapnrg situation is far more better than airasia mah!

Lu tau boh ?

Rubbish lah!

U think Petroleum price at Rm 4.50 to Rm 5.00 per litre from current Rm 2.05 per litre people can afford to pump more meh ??

Consumption will drop 35% to 50% loh!

Posted by Sslee > 9 minutes ago | Report Abuse

Petronm and Petdag did not benefit from petrol subsidy. In fact if no subsidy Petronm and Petdag will benefit more as they can collect the retail sales in full from consumers rather than wait for months to collect the receivables (petrol subsidy) from government.