Posted by Maxpowar > 2022-09-06 11:34 | Report Abuse

@sslee yes, door gift is icing of the cake, the most important thing in attending AGM is to get a sense of what the management is like in person, the way they carry themselves, their body language and how they respond to investors’ questions etc in order to know whether you want to place your money with them. I’m surprised to hear someone claiming to have such sizable portfolio saying “I have never attended a single AGM”.

Posted by i3lurker > 2022-09-06 11:35 | Report Abuse

sslee
dun give excuses, you were hoping to meet Mabel

Mabel is a 70 year old man totally bald,
he combs few hairs across his bald head,
unshaven
fingers yellow with nicotine
never brushes teeth
wears white Pagoda singlets with holes to AGM
and uses Chinese red wooden slippers

see someone like that,

=> thats Mabel

Posted by i3lurker > 2022-09-06 11:39 | Report Abuse

Really ?

I have seen many people with portfolios way more than RM100 million and had never attended a single AGM before in their entire lives.

1 guy told me this => My staff goes ...

Posted by Maxpowar > 2022-09-06 13:56 | Report Abuse

I3lurker: you’ve seen many people with 100m portfolio? Wow…you must have at least tens of millions worth of portfolio..impressive,come I clap for you

Posted by Sslee > 2022-09-06 14:08 | Report Abuse

I3lurker,
A actually hope to meet Leno the cat woman at Insas AGM

Posted by i3lurker > 2022-09-06 16:09 | Report Abuse

Maxpowar

I do some "work" for them.
I have more than 12 clients all Extreme High Net worth,
some of them, their grandfathers were already rich and stayed in Damansara Heights or Bangsar,
I also used to have a Billionaire as a client.

It just so happened like that ....
not that I planned for it, coz they knew each other and introduced me.

Posted by Maxpowar > 2022-09-06 17:18 | Report Abuse

I3lurker: good for you, I’ll refrain from commenting further then, as I have nothing against you.

Posted by Philip ( buy what you understand) > 2022-09-06 20:23 | Report Abuse

So you only comment if you have something against them?

Well, let me remark properly for those who can't read my words as posted. I do go to AGM, but only those which I have something specific that I wish to learn from. Omaha once a year, and in fact I attended the rhonema AGM and yinson AGM before as well. I think just like stocks, some AGMs are more useful than others.

Sadly you find a lot of nonsense in AGM as well.

Like kids going just to collect vouchers, or asking to increase dividends instead of asking them what they are going with the business.

You even have some asking people to do share split, like it makes any difference.

Posted by Maxpowar > 2022-09-06 21:53 | Report Abuse

Fair enough

Posted by PSAi3alert > 2022-09-06 22:32 | Report Abuse

Blue Sail has reported losses for the past 4 quarters

Excluding an other income item, Intco would have posted losses for the latest quarter

---

Intco
(RMB Millions) _____ 30/06/22 ___ 31/03/22 ___ 31/12/21 ___ 30/09/21
Total Revenue ______ 1,453 ________ 2,288 ________ 2,593 _______ 2,972
Gross Profit _________ 213 __________ 402 __________ 1,019 _______ 1,414
Net Income _________ 319* _________ 83 ___________ 488 _________ 1,064
* Included an other income item of RMB438M

Blue Sail
(RMB Millions) _____ 30/06/22 ____ 31/03/22 ___ 31/12/21 ___ 30/09/21
Total Revenue _____ 1,276 ________ 1,298 _______ 1,536 _______ 1,385
Gross Profit ________ 99.15 _________ 176 ________ 253 _________ 341
Net Income ________ -128 _________ -52 ________ -2,263 _______ -23


.

Posted by Windy1974 > 2022-09-07 09:01 | Report Abuse

While everyone's trying to ridicule Philip (I am not saying he is 100% correct), why noone here dare to go challenge this OTB? If you think Philip is cocky, then OTB is what? Not to mention his vulgarity?
If you are in your 20s or 30s i could understand you being naive. Many here are in their 60s. If you can't differentiate who are worst then obviously you aren't very smart

Posted by PureBULL ... > 2022-09-07 18:03 | Report Abuse

THIS IS RIGHT.TIMING CALL
only IF u have knowhow to read it, then that could forced u to take the right action:


Stock: [HENGYUAN]: HENGYUAN REFINING CO BHD
Sep 2, 2022 3:50 PM | Report Abuse

Stock: [PETRONM]: PETRON MALAYSIA REFINING & MARKETING BHD
Aug 30, 2022 4:49 PM | Report Abuse

Program selling takes over when prices dropped below the floor levels i.e.

hy < 534
petronm < 538

BE FEARFUL 1st, on preparation mode to safety.,.

https://www.tradingview.com/x/WxEqwzK0/
++++++++++++++++++++++++++++++++++++

the FIGHTING is going ON.,.

IF able to pierce thru the ceiling level = ho.say.leow i.e.

hy > 562
petronm > 557

++++++++++++++++++++++++++++++++++++

as stock players on a long haul, we don't need to know so so much about stock FA.,.
hard working with long calculation of future QR PAT isn't required = waste of total human time.,.
focus n do this to win BIG!

Price Chart can tell tomorrow news today.,.
I heard this decades ago. n this sounds bombastic.

we must await what signal the mkt would tell us.
the price action as indicated by Darvas Box = the mandatory law to obey:

above ceiling price = ho.say to hold for big gains
below floor price = boh.chow.see

_______________________________________________
TODAY stock.investing world is controlled by powerful QUANTS.
this digital world is abt 0 n 1 = meaning the AI algo machines will rule the stocks once the critical points r established i.e. the turning points of purebear n also purebull.,.

Posted by PureBULL ... > 2022-09-07 18:27 | Report Abuse

In stock mkt since August 1987 = That forced me to be a TALENT scout.

long # Phillip came to i3investor some 4-5 yrs ago with a v impressive 4 stocks in his portfolio:
pbbank, topglove, yinson, ql

of all 4 i was super impressed with his ql.
i talked n walked abt ql yet no human ever hew abt me.,.
i went to ql office to see the ceo for blocks of shares for placement to funds =
i had none.,.

long # Phillip was n still is super hyper kocky.
that behavior of his forced many young i3 members to hoot.9.e all the times.,.

they said Phillip conveniently added 2 ZERO to his portfolio a/c as konsultant to convince, confuse, condemn n kon =
don't u ever think so?

Posted by probability > 2022-09-07 18:48 | Report Abuse

you take out dividend, this stock is trading at 4.50 now

It has delivered EPS even better than what was estimated and yet, purely because of wrong perception on the meaning of the two clauses below, market is thinking it will revert back to its earlier earnings.

Cash flow hedge & Cost of hedging reserve

From what i have extracted and studied, these are nothing but the effects of the Refining margin swap contract.

Cash flow hedge (CFH) are basically hedge portions of the RMSC which has been liquidated as of 30th June and awaiting respective physical market transaction to take place to offset these hedging losses.

Whereas, Cost of hedging reserve (COHR) is simply the following:

Forward looking Mark-to-market estimate of the difference between the fixed price and the future spot price multiplied by the notional quantity and discounted back to a present value based on a reasonable discount rate determined by the producer.

Even if we assume the RMSC covers complete Gasoline production capacity of 35% yield x 10.6 million, 3.7 million barrels, you are securing the below gross profit after hedging losses or gain.

= 3.7 million x 12.7 USD/brl x 4.45 ex
= 209 million MYR.....(1)

No matter what the figures are reported on CFH & COHR, they are purely trying to show the ineffectiveness / effectiveness of the hedging but the profit contribution remains the same. (SERIOUSLY, THINK ABOUT THIS)

The CFH shows how much 'opportunity for greater profit than 209 million / per qtr' is confirmed loss while COHR shows potential loss if the scenario prolongs indefinitely for the balance notional value.

For every negative value on CFH & COHR that will take place, there will be equally higher gross profit in future physical market transaction where after deducting the hedging loss anticipated, you will report the same 209 million for gasoline per qtr.


For the balance refined products diesel, jet fuel and others (10.7 - 3.7 = 7 million barrels per qtr) , you have the following:

1. Diesel at 46% yield, cracks USD 50.36/bbl
2. Jet fuel at 7% yield, cracks USD 38.40/bb
3. Rest of product yield at 12%, using Mogas 95 cracks USD 7.77/bbl

Gross refining margin/brl:

= (0.46 x 50.4 ) + (0.07 x 38.40) + (0.12 x 7.77)
= (23.18 + 2.70 + 0.93)/ (0.65)
= US $ 41.2 / brl

Gross Profit :

= (7 million barrel sales per qtr) x ( US $41.2/brl) x (MYR 4.45/USD)
= 1.283 Billion MYR........(2)


Total gross profit after hedging gain / loss: (1) + (2)
= 1.483 Billion MYR

EPS will be exceeding RM 3 per QTR

The above is what we will obtain going forward if the Diesel & Jet Fuel margins are stable around there. The hedging losses reported on page 8 (438 million) are the effects of monthly hedging of Diesel & Jet fuel as all refinery does and this expected to become zero as crack spread stabilizes from month to month.

Posted by probability > 2022-09-07 21:03 | Report Abuse

ROCK BOTTOM EPS analysis
.........................

let us assume as extreme conservative scenario where 50% of HY throughput is hedged where they will only reflect hedge margin at 10 USD/brl, with the balance free to capture market margin

1. Diesel at 46% yield, cracks USD 50.36/brl
2. Jet fuel at 7% yield, cracks USD 38.40/brl
3. Gasoline at 35% yield, cracks USD 7.77/brl
3. Rest of product yield at 12%, using Mogas 95 cracks USD 7.77/brl

Gross profit from (Hedged) portion:
..............................

= (10.7 million x 50%) x (10 USD/brl) x (MYR 4.45/USD)
= 238 million MYR .....(1)



Gross profit (UN-HEDGED) portion:
............................

Refining margin/brl:

= (0.46 x 50.4 ) + (0.07 x 38.40) + (0.35 x 7.77) + (0.12 x 7.77)
= (23.18 + 2.70 + 2.72 + 0.93)
= US $ 29.5 / brl

Gross profit:
= (10.7 million x 50%) x (29.5 USD/brl) x (MYR 4.45/USD)
= 702 million MYR ......(2)



Total gross profit (1) + (2)
= 238 + 702
= 940 million MYR

PBT = 840 million
PAT = 638 million
EPS = 2.12

Posted by Philip ( buy what you understand) > 2022-09-07 23:55 | Report Abuse

I remember I messaged you and asked you to meet up so I can put some money with you to trade and see how effective your trading is. You have me some excuses when I pushed and until today you have still not replied me when I want to give you some money to trade and invest because I want to learn this trading thing.

So how? Are you still unable to show your trading portfolio results or come to terms with an agreement to trade some of my money?

We can start with 500k or 1 million with profit sharing discussion. Of course being fair any losses should also be shared between you and me 50%.

So far you still have not replied my private message.

Any reason why?

>>>>>>>
PureBULL ...

In stock mkt since August 1987 = That forced me to be a TALENT scout.

Posted by Philip ( buy what you understand) > 2022-09-08 00:24 | Report Abuse

Even if this were true. That would still mean that in 2019 I started with 260k and turned it into 560k in the period, with a CAGR North of 21% every year for the last 4 years. Growth compounded every year by 20% no matter the value of the account is still a 20% growth which in my kocky opinion better than EPF, sp500, most etf etc before fees. Tell me your CAGR results with ever growing sums of money. I wonder how everyone is doing in the last 4-5 years? I know many institutional traders who are not even doing nearly as well if you look percentage wise.

Maybe I am the minority.
The only one who posts his portfolio results and his How-To guide to DIY your own investments and timeline with a daily snapshot of what happens your portfolio goes UP as well as DOWN.

Trust me. Not many people dare to show their portfolio when it is down.

They only like to show when it is going up and getting results.

Trust me, other than me, Felicity, and the founder of the edge magazine, I can't remember finding anyone else posting their long term portfolio online, what they buy and what they sell, and what their results are.


>>>>>>
they said Phillip conveniently added 2 ZERO to his portfolio a/c as konsultant to convince, confuse, condemn n kon =
don't u ever think so?

5 hours ago

Posted by Philip ( buy what you understand) > 2022-09-08 00:30 | Report Abuse

More importantly Maxpower, time for you to realize this:

I post to show the benefit of long term sit down investing in excellent companies.

So take for example now, I did nothing with pchem and bought at 8.5, and now after ex dividend it is 9, and I get 25 cent dividend.

That is the art of doing nothing and watching and excellent business grow over time.

>>>>>>
Posted by Philip ( buy what you understand) > 1 week ago | Report Abuse

And thanks for the pointer, I have bought 100k shares in pchem as well.. on margin at 8.5+

Posted by Maxpowar > 2022-09-08 08:31 | Report Abuse

philip: There’s still no accountability, doesn’t change the view of many people that this whole portfolio does not exist in real life. I’ve mentioned earlier, you sparingly use the term “watch the paint dry” to your convenience, when the wind changes direction, you steer another way round.

Posted by Maxpowar > 2022-09-08 09:58 | Report Abuse

Since you engage me into the conversation again, so here’s my view..nothing personal,just solely commenting on what I see in the way you interact with others here. While there is nothing wrong with investing for the long term, you have a problem, the same problem every retail investor has-whereby “watching the paint dry” only applicable to you when share price keeps tanking. but when you take profit from a stock, you tend to suddenly forget about the “long term story” you keep chanting. That makes you look extremely hypocritical. If anything, that only makes you a mid term trader in disguise of long term investor.

Posted by Philip ( buy what you understand) > 2022-09-09 07:50 | Report Abuse

How do I become a mid term trader if my core stocks has not changed in the last 4 years? I think you have a very bad investment mind when you think in absolutes that someone is either all in, or all out on a stock. That is silly thinking and very amateurish.

Ask yourself this, if I am a mid term trader, why is pchem, QL, yinson still 75% of my portfolio? After so long?

Unlike those who keep talking about how good tguan is and how they are in it for the long term, but they still end up selling everything after 6 months of holding without saying a single word when they sold out. Very kyy of you.

I think your idea of long term offering and mine are very very different indeed.

Posted by Philip ( buy what you understand) > 2022-09-09 07:53 | Report Abuse

In any case here I am enjoying my 700k of dividends, which is growing larger and larger as the day passes. And today at my holding cost, I am collecting 10% dividends from pchem, lowest price paid 4.09. guess what, pchem is now going to 9.

That is how you should be approaching long term investing.

Not trying to time the market trying to sell at highest and buy at lowest. In the end you miss out on the best deals by being to inflexible.

Posted by Philip ( buy what you understand) > 2022-09-09 08:10 | Report Abuse

In terms of trading opportunity, I'm sure you are far more capable than I am. But similar to kyy, I worry about the idea of using fundamental analysis over a assumed future value of stocks to determine your trading buy call. As you know when speculative buys based on a few quarters pushed the entire company to unsustainable market cap and the subsequent crash.

For me I just choose to stay away for a simple basic business reason.

Does hengyuan/shell have a competitive advantage in Malaysia over Petronas, petronm?

Do they have a refining cost advantage that would allow them to take market share?

Are they able to export their goods internationally and compete globally in China/Korea/Japan etc?

Do they have superior management that allows them to upgrade gas stations to the newest euro compliancy at a far cheaper price than their competitors?

Is their barrel production constantly growing year after year? Are they building more refineries? Do they have the cash to build new refineries?

For me those are the basic blocks for further growth for hengyuan for long term analysis.

In the short term the crack spread etc may be useful, but in the long term the ups will always be balanced by the downs.

Which is why I prefer to avoid hengyuan and the other producers. Low margin business, high competition, no differentiation.

>>>>>>>
probability

ROCK BOTTOM EPS analysis

Posted by Philip ( buy what you understand) > 2022-09-09 08:14 | Report Abuse

I do seriously think about this. Which is why I am not touching hengyuan at all.


>>>>>>>
probability

you take out dividend, this stock is trading at 4.50 now

It has delivered EPS even better than what was estimated and yet, purely because of wrong perception on the meaning of the two clauses below, market is thinking it will revert back to its earlier earnings.

Posted by stockraider > 2022-09-09 10:41 | Report Abuse

If u invest in Petrol Refinery, u are talking about a lifespan of 12 to 15 yrs b4 it is render obsolete with EV loh!

Thus strategically there should no more big capex spend on refinery mah!

Naturally Refinery will be need to be high, bcos of no more new capacity, as no one willing to invest loh!

Thus valuation of Refinery should not be on PE loh....it should be based on discounted cashflow over 15 yrs loh!

Lu tau boh ??

Posted by BobAxelrod > 2022-09-09 14:23 | Report Abuse

Joker pressed the Buy but unable to find the Sell button....

Posted by OTB > 2022-09-09 17:54 |

Post removed.Why?

Posted by CharlesT > 2022-09-09 18:08 | Report Abuse

Its too humble of OTB....

Yr ROI fm 2013 is way way way way better....

Posted by CharlesT > 2022-09-09 18:11 | Report Abuse

Export themes in 2015 n glove theme in 2020...this two alone can last for at least 2 generations

Posted by Zhuge_Liang > 2022-09-09 19:43 |

Post removed.Why?

Posted by Philip ( buy what you understand) > 2022-09-09 23:16 | Report Abuse

For me profit is never the most important criteria, it is risk. For you based on TA selling at 10 and buying back at 8.7 may be profit, but for me I find it impossible to know exactly what price movement and more importantly, when will it happen. If we are honest, if it is so easy to calculate, then we would be able to consistently use TA to analyze jaks and hiaptek efficiently. More importantly, if we can use TA with accuracy, we could put 50% of the portfolio into buying hengyuan, or even 100% of portfolio into buying it.

The concept is simple, as sums get bigger and bigger, it becomes harder and harder to trade efficiently.

For me it is simple, as harta price goes lower and lower, my risk in owning it becomes lower and lower.

I just have to make sure of 3 things.
1. Is harta a wonderful company?
2. Is the management of harta good and are they shareholder friendly?
3. Am I paying a discount to existing company value and future earnings?

If the answer is yes, then I buy. If I have money and the answer is still yes, then I buy more. So it becomes easier to allocate future money into buying that good stock idea,

>>>>>>>
I did buy Pchem and I sold all around 10.00.
Based on TA chart, I will buy back around 8.70 in the next few days if I can catch them.
To you the profit is small, but to me a gain is still a gain.

Posted by Philip ( buy what you understand) > 2022-09-09 23:20 | Report Abuse

For me the game then becomes about collecting "Rolex" companies that appreciate in value over time instead of trying to "time" the market perfectly.

Otb I am not saying your strategy is wrong, more I am saying I'm not smart enough to understand trading to make it a big part of my investing strategy (I do try though, you will find me trying to trade hiaptek as much as the next guy)

Posted by Philip ( buy what you understand) > 2022-09-09 23:24 | Report Abuse

But being not so smart my goal then becomes easier.

Find companies that are producing in myr. Sell internationally in USD (4.5). Are good enough to compete on global stage. ROE better than peers in the same industry. And then monitor them.

When the Price is attractive enough, buy.

Posted by Philip ( buy what you understand) > 2022-09-09 23:36 | Report Abuse

My recommendation is to understand the industry.

Shell sold their refining assets to hengyuan.
Shell sold their exploration assets to hibiscus.

And today shell is finally able to sell their Brunei assets to Petronas ( if the agreement pulls through).

When did shell sell if they can make so much money? That is a very interesting question to ask.

What is shell not selling? Shell chemicals. Why? Now that becomes a very interesting question indeed.

But back to stock raider clearly defined answer: you cannot use PE to measure hengyuan earnings and long term viability. Any approach to use quarterly earnings to define the value of the share price is just a dangerous laxative.

Mid term trade I have no idea. But I'm convinced long term hengyuan is not viable


>>>>>>
I also recommend you to buy Hengyuan since you can buy so much of Pchem.

Posted by Maxpowar > 2022-09-10 02:05 | Report Abuse

hats down to OTB, very humble of him to acknowledge his shortcomings, this is something philip has no match to, never will.

Posted by Philip ( buy what you understand) > 2022-09-10 07:17 | Report Abuse

At least otb has a stock recommendation in his list and has a reason for selection. This is Stock forum after all and we get to actually learn things. He even has PORTFOLIO so we can see his picks and we can judge how it performs.

You on the other hand, don't have a PORTFOLIO, talk bad about other people's stock picks and post no analysis of your own, and more importantly there one you talk about the most which is tguan, you don't even hold and quietly sell "for a profit" somehow and someway without commenting.

So what stocks are you actually holding or have analysed now?

Do something useful for once in your life instead of being a troll.

Do share your new stock analysis. At least then you can start criticizing others.

You are like that fat kid sitting on the couch at home everyday talking to the TV about how football players should be doing things differently. Ironic isn't it?

Posted by Philip ( buy what you understand) > 2022-09-10 07:25 | Report Abuse

Your last posting on tguan also scolding other investors on their comments on tguan. And yet you sell without a peep, make a " profit" and go along your merry way.

Who is the hypocrite here?

At least I am consistent. When I buy I say. When I sell I say. More importantly my core ownership in QL and pchem and yinson are still those which I have held on over the years without selling out, still making good money every year, good dividends every year, and making more and more revenue and retained earnings every year in growth.

Why sell my Rolex just for small profit? When the time comes to buy it back, no more chance to get at old price.

>>>>>>
Stock: [TGUAN]: THONG GUAN INDUSTRIES BHD

2022-02-25 18:37 | Report Abuse

@auditorandconsultant

luckily no one bought into your bull crap, I hoped. Tuneupro QR like shit, I never bat an eye to this crap company before. My conviction to Tguan for a holding period of at least 5 years remains. Looking forward for a record high profit.

Posted by CharlesT > 2022-09-10 08:50 | Report Abuse

The key word is Sustainability

If u can go to Casino and make money most of time for a long long time, then u can expect HY to make good hedging profit most of time for a long long time too

Posted by CharlesT > 2022-09-10 08:51 | Report Abuse

Fm FB i came across such incidents, some people kena lotteries very often in their life n they are having a good life now

https://www.ky3.com/2022/08/13/lucky-man-wins-lottery-twice-month/

LUCKY LOTTERY WINNERS... WIN AGAIN! - DocPlayer.net

lucky lottery winners... - The Olive School, Hackney

Real stories or ghost stories I dunno lah

Posted by stockraider > 2022-09-10 08:51 | Report Abuse

Understanding why Prominent Previous Refinery Owner in Msia like Shell & Esso do not do hedging ?

1.The traditional business model of hardcore refinery are simple loh!
They buy physical crude & refine it to physical petrol & diesel and sell at price base on formula with reference to Crude Price, Exchange Rate & Crack Spread fixed by Msia Govt and make money mah!

They do not do fwd hedging n their natural hedge is the inventory they have in hand & their refinery to quickly efficiently process the crude to mainly Petrol & Diesel & quickly sell base on the fixed formula the msia Govt had set loh!

Now with the introduction of Hengyuan, it has modified the refinery model as follows loh!

1. Traditional Refinery Business Model as highlighted above.
2. Virtual Refinery Business Model using Paper Derivative as an investment & hedge to generate profit to be discussed below loh:

2.Virtual Refinery Business model thru pure hedging & derivative loh!
Do u notice that Hengyuan lose alot of monies consistently most of the time despite, mathematical computation on paper the derivative & hedge is highly profitable as per feedback of SSLEE and Probability leh ?

This is bcos the paper computation derivative & hedge shows profit do not reflect the reality situation & business dynamics of the trade loh! Reasons are as follows loh:

The Virtual Refinery Purchase its future crude by purchasing from NYMEX & compute it sells on Nymex sell price of Petrol & Diesel which showed a good profit when doing its hedge but how come this trade fail & registered big losses at the end leh ?

1. The mkt is very dynamic loh! On paper u may see big virtual profit by hedging future crude purchase & future sell of petrol & diesel end products....but when time come for settlement in turnout to be a loss loh!
Why leh the complete hedge trade of buying & selling here cannot convert to a easy profit, like paper indicated leh ?
a. This is bcos the movement of future crude purchase price, do not completely correlate to the selling future price of petrol & diesel price due to huge mkt volatility mah! Just within a day the business dynamic may change loh! Like within 1 day the Crude Price go up 10% whereas the Petrol & Diesel selling future price did not move at all or vice versa loh!
b. The trade initiated are pure paper swap with no delivery of physical goods, thats why it may not reflect the real dynamic of a real physical refinery mah!
c. Even it involve actual delivery of the commodities, there are extra cost & logistic to bring this commodities for processing to convert it to a profit mah!
d. Thus the virtual refinery of Hengyuan business model has shown consistent losses bcos of this challenges discussed above loh!

Posted by stockraider > 2022-09-10 08:52 | Report Abuse

f the virtual refinery of buying crude future & hedging it buy selling future petrol & diesel with a good paper profit computed by SSLEE & Probability really work, then General Raider will make billions just with Rm 10 million....by just doing repeating regular hedge base on the formula advocated by Probability & SSLEE mah!

If that is highly successful....Raider will become a billionaire, bcos it is risk free....bcos everything is hedge......with good reasonable paper profit, when the hedge is done mah!

Then why we need a refinery leh ??

The truth it is not true mah!
The deal done ....is actual speculative & unsustainable... despite fully hedge loh!

The situation & dynamics.. does not applies only to CRUDE & Petroleum mkt...but will apply to every commodity like Palmoil, Soyabean Oil, Metal etc loh!

U can do it on paper & completely hedge on paper with a reasonable profit....but the end still did not make money loh!

Thats is the reasons why....NOBLE....a large listed company in singapore dealing with trading of commodities go bankrupt despite having all the software & resources to support its trade loh!

I think sifu like SSLEE & Probability are just naive....by claiming a fully hedge position will make monies loh!

That is the reasons why ESSO & Shell refuse to do hedging loh!

Also that is the reasons why hengyuan registered a huge unrealised hedging losses on its derivative loh!
And this is beside the risk of raider fear of hengyuan intention of siphoning money loh!

Posted by Maxpowar > 2022-09-10 08:53 | Report Abuse

Haha old man get triggered easily, full of thorns on his body, attacks everyone who strucks his ego..no class

Posted by probability > 2022-09-10 13:35 | Report Abuse

Why Gasoline margin came down but its not so easy for Diesel?
............................................................

EU refinery are 90% simple type, asians like HY are mainly complex type

for simplicity their product yields are as per below:

keyword note - this output ratio cannot be altered

Simple refinery:
...............

40% Gasoline (crack spread : 7 USD/brl)
20% Diesel (crack spread: 50 USD/brl
10% Jet Fuel and other (crack spread at: 20 USD/brl)
30% Fuel Oil ( crack spread : - 25 USD.brl)

avg margin: 7.3 USD/brl

Complex refinery:
.................

30% Gasoline (crack spread : 7 USD/brl)
50% Diesel (crack spread: 50 USD/brl
18% Jet Fuel and other (crack spread at: 20 USD/brl)
2% Fuel Oil ( crack spread : - 25 USD.brl)

avg margin: 30 USD/brl

Due to good margin in refining in Q2 for all refined products including gasoline, everywhere refinery had increased their output by maximizing utilization rate at 99%..

by July gasoline supply had risen more than demand (user of gasoline have the choice to limit their consumption by say working from home)

but despite refineries squeezing all they can on output, the diesel supply still cannot meet demand (diesel mainly used for transportation and manufacturing industry)

Now at this limit of refining output (intentionally delaying maintenance), the diesel is still short...

results is lower crack spread for gasoline and still high crack spread for diesel...


keypoint:
.........

now, at the above low avg refining margin due to fuel oil, its likely that EU refinery will reduce output if gasoline crack is too low, further reducing diesel availablity

Its like natural mechanism in place to sustain Diesel & Jet fuel margin

unless logistics industry, airlines and manufacturing itself slows down due to high price..its unlikely diesel & Jet fuel crack to come down

thats why its actually good for oil price to come down to sustain business and thus demand for benefit of refineries

Posted by probability > 2022-09-10 13:35 | Report Abuse

Sustainability?
...............

what a state of chronic paranoia due to past volatility on earnings of refinery

one shall talk about sustainability of earnings when stocks are trading above PE 20 may be..or the least PE 10

panicking now for a stock that barely moved up from its historic avg low?

refinery stock like HY only needs 13 USD/brl avg refining margin to deliver EPS above RM 1 consistently

now its averaging above 26 USD/brl

and we dont need RM 1 EPS per qtr to justify current price, even 40 cents consistently would do...

there are too many structural changes GLOBALLY that indicates constraints will remain due to shortage in global refining capacity and takes years (more than 5 years to build a refinery and investors are not keen despite high margin currently) unlike gloves for supply to catch up with demand...

its earnings can certainly be volatile, but the mean avg of the crack is expected to be significantly higher than previous years as intermittent shortage due to refinery maintenance, break down etc is high....

as such the odds of margin spiking intermittently is just too high going forward

this especially so considering russian sanction (which is the core of the structural changes that we are basing here)

keyword: sanctions are expected to last years
............................................

there are no such thing as a business being inherently sustainable without such structural factors...any business including tech stocks can have its margin eroded significantly within a short a time

Posted by probability > 2022-09-10 14:15 | Report Abuse

Diesel prices are likely to climb again soon

September 8, 2022

https://www.shiplilly.com/blog/sorry-diesel-prices-are-likely-to-climb-again-soon/

Cost and viability implications for the logistics industry

There are indicators that the diesel price crisis is ongoing. Such indicators belie the expectations that the economy is slowing down. Instead, demand for diesel is increasing. Some countries are already grappling with a diesel shortage. For example, many European countries are rushing to secure diesel deals because of the embargo placed on Russian barrels. As the harvest season comes to the US in the Midwest, demand for diesel is bound to rise even further. It may be that the suppliers must play a balancing act between meeting a domestic need and catering to international demand.

Diesel as an essential fuel of economic activity

John Kemp of Reuters has indicated in his oil-buying periodical that institutional traders and hedge funds are buying diesel contracts at some of the fastest rates since November 2020. In real terms, this means 9 million barrels are added to holdings. Bloomberg indicated that the demand for US diesel hit the highest level in the last half-decade. The winter is likely to bring even more demand. Indeed, the US exports of diesel reached an all-time high just last month. The biggest destinations of these exports are Europe and South America.

Other countries are putting protective mechanisms to ensure their supply of diesel. For example, India has placed exportation limits on diesel based on concerns about the adequacy of domestic supplies. Additionally, diesel from Russia has been shunned by mainstream Europe due to the existing sanctions regime that emanated from the invasion of Ukraine. That embargo will not likely end before the current year’s close. Even though there have been diesel shortages before, this one is gathering much publicity.

Government action to mitigate the risks of diesel shortages

An European Petroleum Refiners Association executive indicated at the beginning of the year that most governments were aware of the link between GDP performance and access to diesel. This was in response to the sanctions against Russia when some skeptics were worried about unintended consequences such as the current scarcity of diesel. This is no idle speculation since Russia remains the largest supplier of diesel to the European Union. It is estimated that Europe imports an average of 750,000 barrels every day from Russia, a matter of necessity given the freight transportation, heavy industry, and economic impetus.

Setting the sanction aside for the moment, the diesel market has generally experienced a much faster demand rebound than supply growth following the Covid-19 pandemic. That pattern was reflected in the market for crude oil. Some experts have noted that the demand growth has slowed down recently on the back of an expectation of a global downturn. This would make sense given the central bank rate increments and inflationary pressures discouraging buyers. However, that pattern only lasted for a relatively brief period to be replaced by an even greater demand for diesel.

An inventory that is lacking in reliability and completeness

A columnist for Reuters has noted that US crude oil inventories were failing to fully recover, despite the fuel price inflation. The implication is that the tightness of the fuel markets and the consequent price elevations will likely continue for the rest of the year. The Department of Energy in the USA reported this was that US oil inventories had fallen to their lowest levels since 1985. Indeed, the strategic petroleum reserve now stands at only 469.9 million barrels. As a result, the problems and worries are spreading to the rest of the world.

Some African countries, for example, have reported such shortages in fuel and drivers, impacting the supply chain in a myriad of ways. The Central African Republic is a case in point. Here, humanitarian organizations that have been active in the country recently have scaled back their engagement. A shortage of diesel has been partly blamed for this withdrawal. Cameroon is another case that has had to deal with street protests over dwindling fuel supplies and the inevitable soaring prices.

Posted by probability > 2022-09-10 14:15 | Report Abuse

The crises have a high potential for contagion across the globe

Brazil is another country beginning to feel the pressure of diesel shortages. Petrobras, the state-owned oil company, has warned of shortages unless the company was allowed to sell its fuels at market prices rather than subsidized rates that encourage consumption. If the traditional suppliers cannot meet the demand and there is a continued squeeze on Russian supplies, it makes for a potentially critical situation. The geopolitical context is unsuitable for turning to Russia and its associates as relief measures. Europe is also wary of its continued energy reliance on Russia, which has hampered its anti-Russia strategy in the wake of the invasion of Ukraine.

Meanwhile, the major consumers of diesel are demanding its steady supply despite the challenges in the market today. The economic recovery in the post-Covid 19 era is bound to be problematic due to the increasing demand for diesel beyond the expectations of a downturn. Economies require diesel to run, and the supply is not doing the trick. The expectations of a relief phase when sanctions against Russia are eased are not likely to come until 2023. This makes a grim reading for those in the logistics and transportation business and ordinary consumers that rely heavily on diesel.

Wrapping up

A combination of a supply squeeze and demand expansion means that diesel is in short supply. Even more worrying is the reality that the current state of the market is not likely to ease until next year. Russia is embargoed by much of Russia, and the USA must think about its domestic needs when harvests begin in the Midwest. In addition, some South American countries are rethinking their price controls on diesel and other fuels to stem demand. Meanwhile, African countries are facing civil strife and significant logistical problems due to the shortage of this essential fuel. The post-Covid 19 era is bringing new economic and political challenges that will require strong policy interventions in the medium and long run

Posted by stockraider > 2022-09-10 14:38 | Report Abuse

Sslee,

Why u so unpanlai one leh ??

Analogy in your layman term....if u bought into 3 million of insas at rm 1.00 as u think it is worth rm 3.00...and u plan to hold it for 2 yrs...but u have unrealized losses of rm 600k bcos current insas mkt price is only rm 0.80...it is not a concern todate, when u have mark to mkt losses of rm 600k leh ?
U may think u holding & did not sell insas thus no losses...but u still your overall wealth drop by rm 600k but if u use margin...they maybe a margin call on u loh , the same applies to hengyuan why its overall nta drop....bcos of its unrealized losses of rm 1.3b despite hengyuan reporting a strong eps of rm 2.20 per share in q2 loh ?

Your question 2 is a mystery to me....how can u claim your refining margin is usd 25 to 30, when your current crack spread is only from usd 2 to 5 leh ? How did u derive this high margin USD 25 margin....is it a guesstimate or from management disclosure leh ?

To add another dimension Q3, hengyuan will have operations inventory losses of roughly USD 10 per barrel, as its inventory crude prices has fallen from USD 105 in June to about USD 85 in SEPT mah!

Posted by Sslee > 1 hour ago | Report Abuse

Stockraider,
Can you slow down, keep your mouth shut and put on your thinking cap for a while to answer my 2 layman questions below:

If you hedge the refining margin at USD 12 - 20 per barrel from month july onward till maybe beyond 2022 up to 2023

So when Q2 end 30/06/2022 the spot month and future month refining margin is now at USD 30 - 25 per barrel.

How you going to capture this unrealised loss in your Q2 account?

Is this unrealised loss a great concerned?

Posted by Philip ( buy what you understand) > 2022-09-11 08:19 | Report Abuse

The simplest basic form of understanding is to go to your relatives and and friends who own gas stations and talk to them.

Start from big picture.

They suffer from 2 issues: first is the low profits which is single digits rates, and coupled with high volatile volume. Which is not as consistent as you would think.

The second issue is in storage: when oil prices are low, they are not allowed to stock more. When oil prices are high, they still have to sell at the same price and absorb. Since they cannot do hedging and profits are so small, they actually have to do other things to make money like getting it from convenience store and renting to maintenance and services.

As for oil traders who make hedging and buying and trading of oil as their main source of income, can you really use PE and consistency as a way of calculating profit and loss? Doing that with noble group, hin Leong etc would have been suicide.

Why then would you want to take so much risk in your investment on unknowns?

The main principle remains: why is shell selling their refineries and getting out of Malaysian market refining and gas station business?

Posted by CharlesT > 2022-09-11 09:45 | Report Abuse

The simplest basic form of understanding is to go to your relatives and and friends who own gas stations and talk to them.

Cant compare Apple with Orange i guess. Those gas stations 's profit are fixed,no much of speculation elements, earning few cents per little

Posted by Sslee > 2022-09-11 09:50 | Report Abuse

I just wonder why Petdag valuation is so rich with PE of 35?