What ever it is, I think HY is a Very good buy now.

May be sifu's subscriber can confirm. I was only told , no black and white.

Why bother to sell and buy back when its only 2 months to wait. You might have to buy back at higher price.

Looks like Last Friday volume indicated that whoever wanted to sell would have sold. HY probably seen the bottom. Slowly but surely moving north.

Why cut when so sure of the stock??

I though one sifu told his subscribers that HY is THE stock that will recover ALL previous losses?? Chance of a life time! He may be right. But then I was told he already cut losses? WHY?

Lets see By 1.9.2022 if its scenario 1 or 2

Scenario 1---
"Russia alrdy control 85% Donbas region @ wont take long b4 total victory (war end) + oil collapse
By time nxt QR out (wont matter good/bad QR), oil alrdy collapse + HY alrdy rm3"

Scenario 2
" Russia is still struggling in Donbas region@ victory is no where insight + crude oil price is still at US$ 115 level.
Q2 2022 HY PAT is at a record of RM600 Million, oil is no where near collapsing + HY is already over RM9.99"

I kind of like Scenaro 2.

OTB

@CharlesT,
I hold them for a bit longer term.
I will buy big when the TA is bullish again.
I do not mind to buy at a higher price.
I want to know the actual bottom.
Wait and see.

======================================================================
When you are sooooo sure of Q2 2022 result, it only make sense that you do not sell now and buy as it is pushed down [ unless of course you have no more $$$ ] and more on the way up, no? After all Q2 result is only 2 months away.

The chartist might say 2 months of consolidation for the formation of a cup and handle pattern then off it fly again ? :-) :=)

Hahahaha Comedy from KYY.

I fact I appreciate contributions from Probability, JohnZhang, ssLee and OTB. Made it interesting and informative.

Is OTB a operator? I have my doubts. Probably just an investment advisor with a substantial subscribers base. Obviously he had recommended many stocks . some make it some failed. He said his strategy is TA come first. I am not surprise HY now hit his cut loss level. he might has sold some and come back when the trend is up?
Do I blame OTB ? Definitely no. I made my decision to buy before OTB start writing abt HY and I believe HY will turn around when Q2 2022 is out. :)

Back to pre Covid price. The difference is they have RM2B cash now but peanut cash then. Thats why is big boss buying now.

In short Q2 2022 PAT is already in the bag. Meaning explosive. What ever hedging activities in June 2022 will be captured in Q3 2022 result.

I think people are more concerned with what these Chinese management do with the hedging policy than the stability of the crack spread in the next 9 months.

Kossan has enough cash to ride the hard times .

hng33
Many try to do prospective next Q profit for hengyuan. Can you use same formula calculation to arrive same figure as posted by hengyuan Q1 profit RM 47m to verifying?
======================================================================

AS OTB has done an estimate for Q2 2022 results,perhaps he is able to do it?

@Johnzhang
Well said. I added more HYC today.

Why want to hantam OTB ? kasi chance lah all to post. If we like we follow. If we dont like we dont follow.
At least you can debate with him if his figures are not logical ? The fact that people come to Hengyuan's forum could indicate that they have "interest" in Hengyuan. No???

It is trading at current level simple because of shitty local operations. The PP operations is contributing consistent income now . At current level , why not.

Enough of analysis and discussion of the prospect of HY and petron. Have patience, both HY and petron will move higher in the weeks to come. If one thinks petron is better go there. Otherwise stick with this horse with hidden treasure.

I will still stick with HY.

it looks like to estimate the potential derivative loss in Q2 2022 is just a very rough guess. It could be any figure ? RM200M loss or RM900M loss or even RM100M profit ?

probability

For everyone's reading pleasure:

How hedging for refining margin causes derivative loss / gain: HENGYUAN


=================================================================
Thank you Probability.
Does that mean the RM432 M Fair value loss on derivatives in Q1 2022 just a book entry and will be reversed in future qtrs? tq

I am confused with your comment OTB. last time you said you will stay FAR FAR away from kyy. Now you can even convinced him to keep his mouth shut ??

When you have so many unknowns and a total lack of transparency from the company, what ever optimism you may have becomes suspicious.
I assume OTB's profit forecast of EPS for FY2022 of RM 7.60. is now off the table?
I do not blame you, its a good input eventhough its way off. TQ

Have faith... somebody said Q1 only side dish , Q2 and Q3 is the main dish.
I believe him.

Posted by OTB > 3 hours ago | Report Abuse

Dear valued readers,

In my previous calculation, I used the sales volume as 9.00 million barrels per quarter.
In Q4 2021, the sales volume was 10.7 million barrels per quarter.
I believe I should use 10.7 million barrels per quarter to compute the projection for FY2022.

Projected Q1 2022 PAT and EPS
Inventory gain from increase of Brent crude oil price= 3.5 million * USD20.0 = USD70.0 million
Assume 1 USD= RM4.20, inventory gain = RM294.0 million

Profit margin = (10.7 million* USD13.86) - manufacturing & administrative expenses and finance cost
Manufacturing & administrative expenses and finance cost = -RM39.7 million

Profit margin = USD148.3 * 4.20 = RM622.9 million - RM39.7 million = RM583.2 million

Assume derivative financial liabilities = 280.0 million

Profit before tax = RM294.0 + 583.2 - 280.0 = RM597.2 million

Income tax = (100*24%) + (497.2*33%) million = (24.0 + 164.1) = 188.1 million

PAT = RM409.1 million

Number of shares = 300 million
EPS = 1.36

Date Crack Spread Brent crude price
1/4/22 14.01 104.58
29/4/22 21.06
2/5/22 23.46
11/5/22 26.90 108.44
Note :
The average crack spread for April 2022 is USD17.54
The current crack spread for May 2022 is USD26.90.
Never mind, I used the average crack spread of USD22.22 in Q2 2022.

Projected Q2 2022 PAT and EPS
Inventory gain from increase of Brent crude oil price= 3.5 million * USD6.0 = USD21.0 million
Assume 1 USD= RM4.38, inventory gain = RM92.0 million

Profit margin = (10.7 million*USD22.22) - manufacturing & administrative expenses and finance cost
Manufacturing & administrative expenses and finance cost = -RM39.7 million

Profit margin = USD237.8*4.38 = RM1041.6 million - RM39.7 million = RM1001.9 million

Assume derivative financial liabilities = 0 million

Profit before tax = RM92.0 + 1001.9 = RM1093.9 million

Income tax = (1093.9*33%) million = 361.0 million

PAT = RM732.9 million

Number of shares = 300 million
EPS = 2.44

Total EPS for the first half of FY2022 is equal to 3.80.
If the crack spread can maintain at USD25 for the second half of FY2022.
I believe the EPS for the second half of FY2022 should be higher than 3.80.
Never mind, I still stick to 3.80 for the second half of FY2022.

Total EPS for FY2022 is 3.80*2 = 7.60.

If my projection on the EPS of Hengyuan to be 7.60 is correct, Hengyuan will be the first stock listed in KLSE to have such high EPS in 2022.
Please tell me what is the fair target price of Hengyuan.

FYI, In 2017, the highest crack spread was USD18.00, the share price of Hengyuan hit 19.50.
Those who want to short the share price of Hengyuan, let them short now.
===========================================================================

TQVM OTB for your estimate.
Whether one agrees with him or not is another matter. I view it as his rights to his opinion and estimate.

So if I assign a PE of 2 [ in view of future uncertainty ] would give me a TP of RM15.20. Not bad at all.

Honestly if Q1 is loss making, something is not right.

TQ Slee.
I thought his Projected PAT for 7 months is 1.9B.

probability
someone, pls help to calculate for stockwin with the following variables

1) Refining margin 26 USD/brl
2) HY sales volume per qtr, 10.7m barrels
3) USD - MYR exchange rate: 4.38

================================================================

Dont get me wrong. I gunuinely wants to know how you get 1.9B in 7 months. I am heavy in HYC.

probability
opportunity of a lifetime here where at current margin - it makes its entire market cap in just 7 months

why fear to go in heavily before Q1 results - just because of a potential hedging loss?

just imagine you have money to buy out this company, would you miss such a golden opportunity - payback at half a year?
===================================================================

Hengyuan Mkt cap is 1.9 B. HYC is going to make 1.9 B in 7 months ? Am I missing something?

"EVEN IF Q1 22' has ZERO profit (due to some blatant judgement for hedging or production breakdown), Q2 ALREADY contributed RM 1 on behalf of Q1 and it has also contributed RM 1 for Q2....this is for sure."

Do we not know if Hengyuan has made " some blatant judgement for hedging or production breakdown" in Q1 by now? If not , then there could still be " some blatant judgement for hedging or production breakdown" in Q2 despite the hugh crack spread ?? just saying.
Of course I am hoping for a super profits in Q1 and more in Q2 !!

With Petron reported a decent PAT for Q1 2022, we can expect a very good set of numbers from Hengyuan tomorrow. Hopefully we will see green , very green for hengyuan tomorrow.

OTB said ---"Buy and hold Hengyuan until the end of 2022, you will win big.
The share price of Hengyuan will skyrocket up the roof once the syndicates have collected enough.
I stop here, I have shared enough here."
======================================================================

When you have people making statements like the above, we need to do our own home work. He only think that syndicates are collecting; but is it really? may be he is right.
Will you win big if you hold till year end? may be may be not.
Will the share price of Hengyuan skyrocket up the roof once the syndicates has collected enough? May be , may be not.
He has his reason for making the evaluation and forecast.
I think Hengyuan will outperform in the coming weeks but weather it will be like 2017 is another matter.

A clown

Hahahaha...2 weeks ago this old man said Hengyuan's profit growth is doubtful. Now he sing a different tune ???? The worst part is he does not know how CW works ???

"To make money, CIMB has issued 150 million Call Warrants with the exercise price of Rm 4.75 and conversion ratio of 5:1=Rm 23.75." Who understand what RM23.75 means ??? Rubbish!!

Logically Q1 2022 result should be better than Q4 result. Similarly Q2 2022 will be a lot better than Q1 2022.
Logically there should not be negative surprises in Q1 2022 result to be announced this week.
However you never know. lets wait and see.

Thank you OTB and probability for your info and estimate of Q1 results.
the stock SHOULD fly if it can achieve 75% of your estimate.

OTB
My subscriber give me this note, I wish to share here.
Very logic answer for the big drop today.

Quote !!
The share price of Hengyuan is being pressed down because the call warrants are expiring at the end of this week. Lower spot price would mean that banks will settle the call warrants at cheaper prices.
=======================================================================

It may be true for Hengyuan whose C22 is expiring on 31.5.2022. But for Petron ,whose CX and CY only expire on 16.1.2023 and 22.12.2022 and yet ist share price has been badly pushed down as well.
Wander Why !!

Is this because of T+3 forced selling of the purchases when it was chased up to RM7.7? or result far below expectation ? or the syndicate play? Time will tell !!

OTB

rr88 made a small amount of money, start to attack me to show off in this forum.
rr88, FYI, at the current price, my profit on Hengyuan can buy a brand new E250 Mercedes and C200 Mercedes.
rr88, you want to beat me, please wait for next life.
rr88, FYI, I still made 1 million profit on AYS.
Nothing to compare and nothing to attack me.
You do not have any material in you.
I wrote 3 good reports on Hengyuan before the share price starts to shoot, you still want to challenge me.
I use my last finger also beat you flat.
==============================================================
OTB, as a seasoned investor, perhaps you may want to share your articles here so that it can be analysed whether it is logic or not ? It can also act as a challenge to the those naysayers that Hengyuan is indeed undervalued? It can also prove that you did a detailed analysis than no one here has done ? It can also show that KYY is slow in recommending Hengyuan later? Yes, KYY will recommend Hengyuan when he bought enough? It will also assist armatures like me make a bit of RM here?
Of course the articles belong to you and its for you to decide!

probably the last chance to buy below 7.30 now before the qtr result is out !

Good numbers. but how do you arrived at one qtr PAT of RM 750M ( minimum) ?

I was going to buy earlier but then after I notice KYY is promoting, I pull my hand brake and think trice. Also heard another sifu also promote to his subscribers, I got more worried. Hahaha
I guess I have to do more homework. It could be super good and super bad !

30 sen, I will buy any day and come back in 2 years.

I think this is probably the best time to relook at Jaks. The sifus ignore this stock. The IB are not keen to look.
If one buy at 30 sen now and hold for 2 years, it could probably hit 60 sen or more. The star attraction is always the approx RM150M yearly profit from PP.
Buy when everyone dislike it and sell when everyone is loving it.

Its ok Mr OTB, since I am not your subscriber, its not fair I get from you that way. Thank you anyway.

I assume MSC is your Ms Universe Stock OTB ? Thank you.
Perhaps ONLY his subscribers can hantam him as they paid for his service.
We "benifited" from OTB FOC so its not nice to hantam him unless he posted with evil intentions. We made our own decision based on his input.
I dont blame you OTB, I say thank you.
BTW , what is your top 3 counters in this gila market conditions??

Hahahahaha its ok Mr Koon, we all know the quality of your stock tips. In a word --Misleading !!