Posted by CharlesT > 2022-09-11 09:51 | Report Abuse

I also wonder why QL valuation is so rich with PE of 40? Tech Stocks at PE 40+

Posted by CharlesT > 2022-09-11 09:52 | Report Abuse

Why Steel stocks n Plantation stocks at low single digit PE........

Posted by CharlesT > 2022-09-11 09:53 | Report Abuse

If u could figure out why then u could be in the better position to make more money fm stock mkt

Posted by Sslee > 2022-09-11 09:59 | Report Abuse

I can only say, Markets can stay irrational longer than you can stay solvent/rational.

Posted by CharlesT > 2022-09-11 10:03 | Report Abuse

Posted by Sslee > 2 minutes ago | Report Abuse

I can only say, Markets can stay irrational longer than you can stay solvent/rational.

Why glove co traded in low single digit PE with high DY not long ago

Posted by CharlesT > 2022-09-11 10:04 | Report Abuse

Its all with a reason.....just that some see it earlier some see it now some dont even see it now

Posted by CharlesT > 2022-09-11 10:05 | Report Abuse

Some choosed not to see

Posted by CharlesT > 2022-09-11 10:14 | Report Abuse

As for Philip's investment in Harta, he only see it 10 years from now

Posted by probability > 2022-09-11 10:32 | Report Abuse

exactly - keyword: pray that diesel crack wont dip below 12 USD/brl (2017 hurricane harvey peak was 17 USD/brL)

despite charlest pessimistic outward expressions...his background processors keeps learning...


Posted by CharlesT > Sep 11, 2022 10:22 AM | Report Abuse

Posted by Sslee > 46 seconds ago | Report Abuse

The important thing is by Q4 if HRC cash flow can repay the RM 1.5 billion borrowing and the marked to market derivatives loss is negligible as on 31/12/2022 then most likely the HRC price uptrend can sustain for some time.

Ya ya if only high diesel price becomes a new normal n stay for a long long time (so is Ukraine War) n HY can make EPS RM2 or RM3 for a long long time

Pray 24 hours that it will not plunge like Mogas 92 or Tin or CPO etc etc etc etc

Posted by probability > 2022-09-11 10:32 |

Post removed.Why?

Posted by probability > 2022-09-11 13:14 | Report Abuse

Column: U.S. diesel stocks critically low after failing to recover over

https://www.reuters.com/markets/commodities/us-diesel-stocks-critically-low-after-failing-recover-over-summer-kemp-2022-09-09/

LONDON, Sept 9 (Reuters) - U.S. inventories of diesel and other distillate fuel oils are now critically low after failing to recover during the summer driving season.

The shortage will keep upward pressure on diesel refining margins and prices unless and until the global economy and distillate consumption slows significantly.

Distillate inventories amounted to just 112 million barrels on Sept. 2, according to high-frequency data published by the U.S. Energy Information Administration (EIA).


Stocks are down from 134 million barrels at the same point in 2021 and at the lowest level for the time of year since 1996 ("Weekly petroleum status report", EIA, Sept. 8).

Stocks have barely recovered from a low of 104 million barrels in early May despite large volumes of crude processing over the summer as refiners met seasonal demand from motorists for gasoline.

The seasonal accumulation of distillate inventories since the end of June has been one of the smallest in the last 30 years, pointing to a persistent underlying shortage (https://tmsnrt.rs/3B26Xbm).

Domestic consumption is muted and running around 200,000 barrels per day (bpd) below the pre-pandemic five-year seasonal average.

But exports remain high as refiners respond to shortages around the world caused by the rapid rebound from the pandemic, disruptions caused by Russia's invasion of Ukraine, and China's coronavirus lockdowns.

Net exports were almost 1.3 million bpd in the five weeks ending on Sept. 2 compared with around 0.8 million bpd at the same point in 2021.

U.S. refiners have a window to boost inventories over the next few weeks by prolonging high crude processing rates for longer after the summer than normal and switching units from max-gasoline to max-distillate mode.

But the shortage of distillate fuel oils is worldwide with stocks at their lowest level for more than a decade in Europe and Asia.

Europe's distillate inventories are down 68 million barrels compared with 2021 at the lowest seasonal level since 2002.

Only a global slowdown in manufacturing and freight transportation will rebuild stocks to more comfortable levels and abate the upward pressure on refinery margins and oil prices.

.......

Keyword - ONLY A 'GLOBAL' SLOWDOWN

Posted by probability > 2022-09-11 13:20 | Report Abuse

Basically they are saying you need all the stocks listed in the world earnings to decline before diesel price comes down...

not sure even then its crack spread can come down from 50 USD/brl presently to 17 USD/brl like in 2017 Hurricane Harvey...

Posted by stockraider > 2022-09-11 14:03 | Report Abuse

Still bullshittng on hedge accounting loh ?!

If Raider just substitute the words "hedge" with "speculative or gambling", these word feed perfectly on Hengyuan current situation or current reporting situation too mah!

The facts...is Hengyuan Derivative have an outstanding unrealized losses of Rm 1.3b in its books, not being flow to its P&L account loh!

Whether this massive Rm 1.3b losses are actually due to hedging, speculation, gambling or due siphoning nobody actually knows.,...it is for anybody guess mah!

Thus to trust these Rm 1.3b deficit could be reverse from hengyuan account....is like hoping that you would strike lottery loh!

As the current situation for Hengyuan is much dire, bcos the crack spread now is low ranging from USD 0.5 to 5.0 loh from earlier USD 20 enjoyed in 2nd qtr mah!

This type of low crack spread will result...in very low or negative operating profit for hengyuan loh!

And Whether the current Hedging situation could save HRC financial negative position is a doubtful question, bcos HRC hedging need to reverse the Massive Rm 1.3b derivative losses deficits 1st, b4 it can contribute any bottom line to its P&L for Q3 result mah!

Posted by probability > 1 day ago | Report Abuse

Truth cannot be suppressed very long, the earlier one investigates and verify what is the truth the more upper hand one will have

the longer one waits the higher the odds are for others to find out ahead of you..

....

HEDGE ACCOUNTING & how it is reported on OTHER COMPREHENSIVE INCOME (OCI)

https://www.youtube.com/watch?v=w5P_M9fWqGg

The above simple example for ORANGES can be viewed as CRUDE OIL for HY where the hedging is done with the intention of going LONG (the higher the future price, the higher the gain)

For refined products hedge, it is for going SHORT, the higher the future price, the greater the loss.

The net effect of the above two is what reported by HY under their OCI.

The Cash Flow Hedge (CFH) in OCI shows the hedging gain / loss for the hedged position which are closed, but the corresponding physical market transaction (change in ownership of the goods) is yet to take place to deliver the available market gross profit which is then offset by this hedging gain / loss on CFH to give the P&L exactly as it has been hedged initially.

The Cost of Hedging Reserve (COHR) on the other hand shows the hedging gain / loss for all the balance hedged position (yet to be closed) from the notional amount (refining margin swap contract RMSC), where the corresponding physical market transaction will take place within the maturity period (next 24 months) assuming the hedging positions are closed as per current spot rate.

As such, COHR is a highly hypothetical figure that changes significantly as per the market spot price of the commodity (mark-to-market) when the financial reporting period is closed.

Posted by AlsvinChangan > 2022-09-11 14:07 | Report Abuse

SELL PCHEM BUY HENGYANG ?

Posted by stockraider > 2022-09-11 14:21 | 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!

REMEMBER WHAT RAIDER SAY ABOVE LOH!

A REFINERY BUSINESS LIKE HENGYUAN DO NOT REALLY NEED A HEDGING BUSINESS MODEL AS WELL.

IN HENGYUAN CASE.....THEY EVEN OVER DO IT....EXPOSING IT WITH A HUGE MASSIVE HEDGING LOSSES TODATE OF RM 1.3B LOH!

WHO IN THE RIGHT MIND, CAN CAUSE THE CO TO LOSE A MASSIVE RM 1.3B TODATE THRU HEDGING TODATE LEH ?

SINCE SSLEE GO BACK TO CHECK.....RAIDER HAD UNCOVERED ANOTHER MASSIVE HIGH RISK POSITION OF HENGYUAN....WHICH IS HIGHER EVEN BEYOND, GENERAL RAIDER CURRENT EXPECTATION LOH!-..........To be continue......!!!



Posted by Sslee > 21 hours ago | Report Abuse

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 leh⁷ ? How did u derive this high margin USD 25 margin....is it a guesstimate or from management disclosure leh ?

Stockraider,
Q2 result is for financial end 30/06/2022.
So go and check on 30/06/2022 what is the refining margin spot month and future month.

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

And current crack spread is only from usd 2 to 5 leh then how much money your refining magin swap contracts maturity on Sept will earned?

Posted by probability > 2022-09-11 14:27 | Report Abuse

@not so pandai raider...

Understanding the Cost of Hedging

https://www.treasuryandrisk.com/2021/10/13/understanding-the-cost-of-hedging/?slreturn=20220811021228

Why Hedge Performance Is Not the Right Measure of Cost
.......................

Individuals less familiar with hedging may think that the cost of a hedge is equal to the monetary gain or loss upon settlement of the derivative. This is not an accurate assessment, as it ignores the fact that hedging is ultimately meant to reduce risk and uncertainty.

Consider a company that is planning a bond transaction. In one month, the organization will issue a $1 billion, 10-year bond at 3.5 percent. The treasurer is worried that interest rates may rise over the next month, making the bond more expensive than expected, so she decides to partially hedge that risk using $500 million worth of 10-year treasury locks. If rates rise, the derivative will be an asset that offsets the increased interest rate at issuance, reducing the financial impact that market shift has on the company’s new debt.

By contrast, if rates fall, the derivative will become a liability; the bond will be priced better than expected, and the derivative will look like an unnecessary cost. Suppose rates fall by 50 basis points (bps) from the time the hedge is executed until the time the bond is issued. The bond issuance will be executed at 3.0 percent, and the derivative will be a liability of roughly $2.5 million. However, that is only half the story. Amortizing the termination value of the hedge over the life of the financing results in an effective cost of debt of roughly 3.25 percent, which is still better than the original expectation of 3.5 percent.

Some executives facing such a scenario will view the hedge as costly because it ultimately was not needed. This is not the right perspective. The purpose of the hedge was to reduce risk in future outcomes, giving the company greater certainty around cost of capital planning. Think about the opposite scenario: If rates had risen 50 bps instead of falling, the hedge would have been an asset worth roughly $2.5 million, and the effective cost of debt would have been roughly 3.75 percent—higher than the original expectation because only half of the issuance was hedged. In this case, would the treasurer be happy that the hedge was an asset, even if the cost of financing was higher than anticipated?
In both scenarios, the hedge serves its purpose by reducing the potential volatility of future issuance outcomes and narrowing the band of possible issuance rates. By keeping in mind that derivatives are meant to reduce risk, companies can move away from measuring the costs of their hedging programs using gains and losses.

Posted by stockraider > 2022-09-11 15:08 | Report Abuse

Lets play dumb & assume naively SSLEE & PROBABILITY use their computation is going to work & Raider can be billionaire if can use their hedging model disciplinary and steadily below loh!

If 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!

The Virtual Refinery own by raider will Purchase its future crude by purchasing from NYMEX & compute it...& sells on Nymex sell price of Petrol & Diesel which showed a good profit on paper when doing its hedge...the same hedge can be done...vice versa when crude is selling at a premium to Diesel & Petrol loh!

With this model Raider effectively do not really need a refinery mah!
Just by using the hedging....Raider can do the trick of making money without any need of any refinery mah!

BUT LETS FACE IT LOH....IT IS NOT SO SIMPLE IN REAL LIFE LOH!

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, it still did not make money loh!

Thats is the reasons why....NOBLE & Hin Leong....2 large listed company in singapore dealing with trading of commodities go bankrupt despite having all the capital, 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!

Beside this risk of raider fear of siphoning money loh!

HEDGING....RAIDER NEED TO UPDATE U LOH!

THE HEDGING TRADE THAT HENGYUAN HAS DONE IS NOT REALLY DONE PROFESSIONALLY & SAFELY LIKE WHAT RAIDER HAD DONE FOLLOWING THRU REPUTABLE MKT LIKE NYMEX or CME LOH!

THE HENGYUAN REFINING MARGIN SWAP IS FLOW THRU ONE COUNTER PARTY AGENT IN SINGAPORE LOH!
ACTUALLY THERE IS NO REFINING MARGIN SWAP AVAILABLE IN THE REPUTABLE MKT LIKE IN NYMEX OR CME MAH!

IT IS JUST AN ARRANGEMENT BETWEEN HENGYUAN WITH A PRIVATE PARTY LOH!
THUS THIS TYPE OF DEALS WILL HAVE MUCH LESS ASSURANCE & IT CAN BE AN EASY DEVICE FOR SIPHONING CASH- THIS TYPE OF DEAL CAN BE EASILY STRUCTURED MAH!

THUS WE SHOULD BE VERY CAREFUL WITH THIS TYPE UNCONVENTIONAL PRIVATE REFINING MARGIN SWAP LOH!

ACCORDING RAIDER SIFU SENIOR ANALYST & CONFIRMED BY 009 INVESTIGATION TEAM, THEY HAVE INFO TO SUSPECT , THAT THE COUNTER PARTY IS A PRIVATE CHINESE PARTY OPERATING IN SPORE WHO HAVE A VERY CLOSE RELATIONSHIP WITH THE HENGYUAN CHINA OWNER LOH!

Posted by probability > 2022-09-11 15:10 | Report Abuse

aiyo @raider...why u so not so pandai?

..think you drinking too much Baijiu leh..

how to make money using hedging instruments alone?

you really need to meditate...take a deep breath liao...

understand how refining margin hedging works first

go through the below and check yourself can you make money just buy playing with the hedging instrument consistently - both on the refined product gasoline and crude without a physical refinery?

..............

Extract from below article:

www.cmegroup.com/education/articles-and-reports/introduction-to-crack-spreads.html

Fixing Refiner Margins Through a Simple 1:1 Crack Spread

In January, a refiner reviews his crude oil acquisition strategy and his potential gasoline margins for the spring. He sees that gasoline prices are strong, and plans a two-month crude-to-gasoline spread strategy that will allow him to lock in his margins. Similarly, a professional trader can analyze the technical charts and decide to “sell” the crack spread as a directional play, if the trader takes a view that current crack spread levels are relatively high, and will probably decline in the future.

In January, the spread between April crude oil futures ($50.00 per barrel) and May RBOB gasoline futures ($1.60 per gallon or $67.20 per barrel) presents what the refiner believes to be a favorable 1:1 crack spread of $17.20 per barrel. Typically, refiners purchase crude oil for processing in a particular month, and sell the refined products one month later.

The refiner decides to “sell” the crack spread by selling RBOB gasoline futures, and buying crude oil futures, thereby locking in the $17.20 per barrel crack spread value. He executes this by selling May RBOB gasoline futures at $1.60 per gallon (or $67.20 per barrel), and buying April crude oil futures at $50.00 per barrel.

Two months later, in March, the refiner purchases the crude oil at $60.00 per barrel in the cash market for refining into products. At the same time, he also sells gasoline from his existing stock in the cash market for $1.75 per gallon, or $73.50 per barrel. His crack spread value in the cash market has declined since January, and is now $13.50 per barrel ($73.50 per barrel gasoline less $60.00 per barrel for crude oil).

Since the futures market reflects the cash market, April crude oil futures are also selling at $60.00 per barrel in March — $10 more than when he purchased them. May RBOB gasoline futures are also trading higher at $1.75 per gallon ($73.50 per barrel). To complete the crack spread transaction, the refiner buys back the crack spread by first repurchasing the gasoline futures he sold in January, and he also sells back the crude oil futures. The refiner locks in a $3.70 per barrel profit on this crack spread futures trade.

The refiner has successfully locked in a crack spread of $17.20 (the futures gain of $3.70 is added to the cash market cracking margin of $13.50). Had the refiner been un-hedged, his cracking margin would have been limited to the $13.50 gain he had in the cash market. Instead, combined with the futures gain, his final net cracking margin with the hedge is $17.20 — the favorable margin he originally sought in January.

Posted by stockraider > 2022-09-11 15:15 | Report Abuse

Just becareful loh!

The Hedging is done thru a Private Refining Margin Swap....thru a chinese counter party in SPORE loh!

It is one to one bets loh!

Be very careful mah!

Posted by probability > 2022-09-11 15:16 | Report Abuse

BECAREFUL OF THE NOT SO PANDAI RAIDER LOH! BRAIN DAMAGED SPAMMER without any substance lorrr!!!!

Posted by stockraider > 2022-09-11 15:26 | Report Abuse

Why need to be very careful with "Private Refining Margin Swap" ?

Even in the event, we are highly successful with the trade and make billions- The Private Counter Party....can simply just default and nothing we can do loh!

The huge sum of money, that Hengyuan is betting...to tune of Rm 1.3 billion losses, is just ridiculous mah!

Posted by stockraider > 2 minutes ago | Report Abuse

Just becareful loh!

The Hedging is done thru a Private Refining Margin Swap....thru a chinese counter party in SPORE loh!

It is one to one bets loh!

Be very careful mah!

Posted by probability > 2022-09-11 15:30 | Report Abuse

ALREADY EXPLAINED how the derivative loss figure in OCI comes about mah!!

NEED A FUNCTIONING BRAIN TO UNDERSTAND Lorrr!!!

..................

Hengyuan had hedged 18 million barrels at avg 12.7 USD/brl refining margin to be effected as it matures at the rate of 0.8 million barrels per month. This is mainly for gasoline.

This is indicated by the Refining margin Swap contract (RMSC) of USS 226 million as can be seen on their financial report.

USD 226 million = USD 18 million x USD 12.7/brl

The fair value changes with respect to the hedged value are reflected under Other Comprehensive Income (OCI) using Cash flow Hedge and Cost of hedging reserve as per IFRS 9:

These are basically forecasted derivative loss against mark-to-market margin in future as of 30th June.
....................

Since the market margin (in futures) as of 30 June 22 was extraordinarily high at $ 32/brl. The expected hedging losses for gasoline going forward was high and reported accordingly.

Hedging loss:

(hedged margin - spot margin) x hedged barrels

= (12.7 USD/brl - avg 32 USD/brl) x 18 million barrels
= - USD 347 million
= - 1.5 Billion MYR

This is not a real loss, but expected 'ópportunity loss' due to hedging and thats why it is not reported in P&L.

The above forecasted losses when occurs in future, it is accompanied by greater gross margin where after offsetting these losses, it will deliver the profit margin in P&L as per the original hedge value of 12.7 USD/brl

As such, these forecasted loss done at end of each financial report would over-turn completely when gasoline margin dives down..

Refer below link which is presently showing $ 5.2/brl in Sep 2022 to $ 4.3 /brl in Dec 2023.

At end of June it was showing avg $ 32/brl

link:
.....

www.cmegroup.com/markets/energy/refined-products/singapore-mogas-92-un...

At end of Sept 22' (for Q3), if the spot margin value above maintains, you have

Hedging gain:

= (12.7 USD/brl - avg 4.5 USD/brl) x 18 million barrels
= USD 147 million
= 650 million MYR

Posted by stockraider > 2022-09-11 15:32 | Report Abuse

Ya how do u handle the high risk highlighted below leh ?

Why need to be very careful with "Private Refining Margin Swap" ?

Even in the event, we are highly successful with the trade and make billions- The Private Counter Party....can simply just default and nothing we can do loh!

The huge sum of money, that Hengyuan is betting...to tune of Rm 1.3 billion losses, is just ridiculous mah!

Posted by stockraider > 2 minutes ago | Report Abuse

Just becareful loh!

The Hedging is done thru a Private Refining Margin Swap....thru a chinese counter party in SPORE loh!

It is one to one bets loh!

Be very careful mah!

Posted by probability > 2 seconds ago | Report Abuse

ALREADY EXPLAINED how the derivative loss figure in OCI comes about mah!!

NEED A FUNCTIONING BRAIN TO UNDERSTAND Lorrr!!!

..................

Hengyuan had hedged 18 million barrels at avg 12.7 USD/brl refining margin to be effected as it matures at the rate of 0.8 million barrels per month. This is mainly for gasoline.

This is indicated by the Refining margin Swap contract (RMSC) of USS 226 million as can be seen on their financial report.

USD 226 million = USD 18 million x USD 12.7/brl

The fair value changes with respect to the hedged value are reflected under Other Comprehensive Income (OCI) using Cash flow Hedge and Cost of hedging reserve as per IFRS 9:

These are basically forecasted derivative loss against mark-to-market margin in future as of 30th June.
....................

Since the market margin (in futures) as of 30 June 22 was extraordinarily high at $ 32/brl. The expected hedging losses for gasoline going forward was high and reported accordingly.

Hedging loss:

(hedged margin - spot margin) x hedged barrels

= (12.7 USD/brl - avg 32 USD/brl) x 18 million barrels
= - USD 347 million
= - 1.5 Billion MYR

This is not a real loss, but expected 'ópportunity loss' due to hedging and thats why it is not reported in P&L.

The above forecasted losses when occurs in future, it is accompanied by greater gross margin where after offsetting these losses, it will deliver the profit margin in P&L as per the original hedge value of 12.7 USD/brl

As such, these forecasted loss done at end of each financial report would over-turn completely when gasoline margin dives down..

Refer below link which is presently showing $ 5.2/brl in Sep 2022 to $ 4.3 /brl in Dec 2023.

At end of June it was showing avg $ 32/brl

Posted by probability > 2022-09-11 15:34 | Report Abuse

what risk leh?..that was FORECASTED loss end of June 22 mah!!

now the risk already disappear lorr...

now FORECASTED GAIN liao...

Posted by stockraider > 2022-09-11 15:39 | Report Abuse

REMEMBER THE COUNTER PARTY CAN JUST WALK OUT, IF LOSE THE HEDGING BACK AGAINST HENGYUAN MAH!

PAKAI OTAK LAH! NO RISK MEH ?

NO RISK MEH ?

Why need to be very careful with "Private Refining Margin Swap" ?

Even in the event, we are highly successful with the trade and make billions- The Private Counter Party....can simply just default and nothing we can do loh!

The huge sum of money, that Hengyuan is betting...to tune of Rm 1.3 billion losses, is just ridiculous mah!

Posted by probability > 59 seconds ago | Report Abuse

what risk leh?..that was FORECASTED loss end of June 22 mah!!

now the risk already disappear lorr...

now FORECASTED GAIN liao...

Posted by probability > 2022-09-11 15:40 | Report Abuse

PAKAI OTAK LAH,,,now crack spread is below hedging value,,,your otak can faham how it affects cost of hedging reserve or not?

ADA FAHAM KAH??

Posted by stockraider > 2022-09-11 15:43 | Report Abuse

PAKAI OTAK LAH!
THE COUNTER PARTY....DO NOT WANT TO HONOR....THE PRIVATE REFINING SWAP CONTRACT...IF IT LOSE ALOT OF MONIES TO HENGYUAN MAH!

THIS IS THE RISK MAH!

LU TAU BOH ?

Posted by stockraider > 2022-09-11 15:47 | Report Abuse

U ALA DENGAR BAIK BAIK KA ?
HENGYUAN MENANG MANYAK MANYAK...ON HEDGING....TAPI OLANG TAK BAYAR ...HOW ?

Posted by probability > 2022-09-11 15:48 | Report Abuse

ITU FORECASTED TANGGAL 30 JUNE MAH..sekarang FORECAST SUDAH LAIN..

LU TAU BO macam mana bikin forecast cost of hedging reserve??

Posted by stockraider > 2022-09-11 15:49 | Report Abuse

Ini Info baru mah!

Lu tau boh ?

ACCORDING RAIDER SIFU SENIOR ANALYST & CONFIRMED BY 009 INVESTIGATION TEAM, THEY HAVE INFO TO SUSPECT , THAT THE COUNTER PARTY IS A PRIVATE CHINESE PARTY OPERATING IN SPORE WHO HAVE A VERY CLOSE RELATIONSHIP WITH THE HENGYUAN CHINA OWNER LOH!

Posted by probability > 2022-09-11 15:51 | Report Abuse

JANGAN BAWA SPEKULASI TANPA BUKTI KUKUH lorr!

OTAK TAK PANDAI macam ini la bikin cerita...

Posted by stockraider > 2022-09-11 15:53 |

Post removed.Why?

Posted by probability > 2022-09-11 15:59 | Report Abuse

MORAL OF THE STORY - the CLUELESS will suspect everything...even himself

Posted by stockraider > 2022-09-11 16:00 | Report Abuse

U should not attack Raider mah!
Go & investigate the Private Refining Margin Swap Contract Dulu mah!
Go & find out more 1st loh!

For your own good mah!

Posted by Philip ( buy what you understand) > 2022-09-11 17:12 | Report Abuse

How many plantation and steel stocks have family mart type of business and export internationally their products?

>>>>>
CharlesT

Why Steel stocks n Plantation stocks at low single digit PE........

7 hours ago

Posted by Philip ( buy what you understand) > 2022-09-11 17:13 | Report Abuse

How long will insas stay irrational before it reflects is true value? Is it possible that people can be blind for 7 years?
>>>>>>

Sslee

I can only say, Markets can stay irrational longer than you can stay solvent/rational.

7 hours ago

Posted by Philip ( buy what you understand) > 2022-09-11 17:15 | Report Abuse

One of those 2 does not gamble with the price of oil.

>>>>>
AlsvinChangan

SELL PCHEM BUY HENGYANG ?

3 hours ago

Posted by probability > 2022-09-11 17:22 | Report Abuse

HY makes margin from refining, independent on oil price

PCHEM only has the competitive advantage as long oil price is high and help by petronas, the moment price goes down - it loses its competitive advantage if i am not mistaken


Posted by Philip ( buy what you understand) > Sep 11, 2022 5:15 PM | Report Abuse

One of those 2 does not gamble with the price of oil.

>>>>>
AlsvinChangan

SELL PCHEM BUY HENGYANG ?

3 hours ago

Posted by PureBULL ... > 2022-09-11 19:09 | Report Abuse

everybody BIG in stock knows,
CRUDE OIL is the curse of our world.
= as crude OIL super bull run, WAR is a certainty.,.

n that happened on Feb 24th, 2022 = crude OIL went berserk to usd$130 per tong in that 1st 10 mkt days.,.
thereafter, OIL has been in purebear till low of today at usd$86 :

https://www.tradingview.com/x/FVGXAWlK/

OIL is heading to usd$66 per tong = then ONLY rude sia KAPUT financially.,.
WHAT say U, investors?

Posted by Philip ( buy what you understand) > 2022-09-11 19:12 | Report Abuse

Hi probability,
In my opinion this is a very valid risk which is why I do not invest in hengyuan. Yes you may be right and you will make handsomely on the hedging that hy does and hopefully they pay a dividend or share buyback.

However what are the risks involved? For me there is one hundred percent certainty that in the long run ( or short) their hedging will cause them to lose money.

Yes they may make tons of money in the short term. And I'm sure you will have great success with it.

But for me if I am looking at the long term aspects of the business, I do not like how the management is running it.

In any case I wish you luck.

For me, as you will know I almost never agree with stockraider on anything. But for this, he and I see the same thing.

Take it as you will.

Good luck on your investments sir.

>>>>>>>>
probability

ALREADY EXPLAINED how the derivative loss figure in OCI comes about mah!!

NEED A FUNCTIONING BRAIN TO UNDERSTAND Lorrr!!!

Posted by Philip ( buy what you understand) > 2022-09-11 19:26 | Report Abuse

Firstly. Pchem has 25% profit margins. Which is far more than every other comparable major petrochemical company.

Secondly 50% of pchem revenues comes from urea or fertilizer. They have an ungodly gross margins on fertilizer. Why?

Thirdly, neither basf, the Koreans, Japanese or the Americans have a major petrochemical processing center in South East Asia. Which means with the delay and difficulty and distance of transportation and logistics, the cheese stands alone.

Neither lctitan has anywhere near the profit margins (-5%)
Or Dow Inc (11%)
Or BASF (7%)
Or Formosa petrochemical (8%)

Now you start to understand why I am investing in pchem?
They serve South East Asia, the fastest growing economy in the world right now with Cambodia, Vietnam, Indonesia.

They have gross margins of almost 32%, name me another petrochemical company in the world that has that.

They have huge growth potential in the market, with long term TAM ( after adding the new businesses) of 100 billion ringgit a year. And the transparency and clarity of earnings stretch 10 years with the number of FID projects they are doing.

It is 50% of my portfolio.

For your conviction in hengyuan, how big a space does it hold on yours?

>>>>>>>
probability

HY makes margin from refining, independent on oil price

PCHEM only has the competitive advantage as long oil price is high and help by petronas, the moment price goes down - it loses its competitive advantage if i am not mistaken

Posted by probability > 2022-09-11 19:32 | Report Abuse

@Philip, no assertion here for you to invest on HY. Its highly subjective to the diesel crack spread. I have no comparison with Pchem.

Just highlighted above as you were linking HY with oil price whil i had the opinion that Pchem only has this advantage coz of cheap raw material price from Petronas.

Nothing to comment here. I had accidentally pasted my HY articles here (thinking it was my blog on HY earlier) in the first place..he he
and continued doing so after your comments.

no worries..have a good day

Posted by Philip ( buy what you understand) > 2022-09-11 19:47 | Report Abuse

No problems.

But I'm still curious, as you seem to have very high conviction in this stock.

How much are you deploying for this company, 20% of portfolio? 50%, 100%? Or 150% with margin

Posted by stockraider > 2022-09-12 08:17 | Report Abuse

Correctloh!

"one more thing.............u don't know what prices those contracts and whether long or short were struck, the weightage and volumes for each month also not known. .........how can u calculate here and there....they say rubbish in rubbish out applies here."!

QQQ talk alot of sense below loh:

Posted by qqq3333 > 11 hours ago | Report Abuse

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

And current crack spread is only from usd 2 to 5 leh then how much money your refining magin swap contracts maturity on Sept will earned?
_≠==============

Sslee.....that is a silly question...u can as easily and as correctly stated your question as how much money u would have lost...

....no kidding....don't use the word hedging without any understanding what happened

one more thing.............u don't know what prices those contracts and whether long or short were struck, the weightage and volumes for each month also not known. .........how can u calculate here and there....they say rubbish in rubbish out applies here.

Posted by PureBULL ... > 2022-09-28 15:37 | Report Abuse

ALL COMMODITY RELATED STOCKS R VERY DANGEROUS WHEN ITS commodity PUREBULL RUN IS GG


All commodity stocks go purebull run as short term VALUE stocks,
not growth, when its commodity's prices r in purebull uptrending.

n that good times in increasing ASP could last 1 to 2 QR max as proven by historical FACTS on plays in
steel, palm oil, crude oil, metals like tin n Al etc.,.

Crude OIL WTI had peaked at usd130 per tong n is now on straight line purebear run in CY3Q, n could go to usd66 by yr end.,.
The correlation is, Crude OIL derivative stocks prices move in tandem with crude OIL trend always, as follows:

1. BULL RUN
was in 1st Q n best in 2nd QR of 2022 =
meaning
1.1. Crude oil producers make super crazzy QR PAT n peaked in CY2Q.
for now, all their QR PAT should drop like crazzy.,. in the coming QR.

1.2 Petrol Chemical stocks like PCHEM made crazzy QR PAT n will see more drop in QR PAT by % than crude OIL producers.

1.3 Crude OIL refiners would have made the best of the BEST QR PAT in CY1Q till max in CY2Q, without having to hedge to max PAT!
for now these refineries every week r super making great HUGE losses even they hedge perfectly!

https://www.tradingview.com/x/N5nB47MR/

Look at ARAMCO's future, world's 1 n only # 1 in OIL:

https://www.tradingview.com/x/1IOApUQP/

NB: if U ever try to do research in FA, do make sure it is purely accurate 1st, n oso complete = then only u can win BIG in stocks.,.

Posted by Philip ( buy what you understand) > 2022-09-29 15:01 | Report Abuse

Joined jack in his belief that CU as a business can turnaround. I like the idea, worried about the debt, but they have many things that can be easily improved to gain profitability. More stores, less wastage, more efficiency. Bought some at 0.41-0.43 @400k shares

Posted by Philip ( buy what you understand) > 2022-09-29 15:03 | Report Abuse

You still have replied my messages to invest my money with your sure win trading strategy, why? Is it talk and post a lot, but when push comes to shove you don't have the results to show for it?
>>>>>>
NB: if U ever try to do research in FA, do make sure it is purely accurate 1st, n oso complete = then only u can win BIG in stocks.,.

Posted by enigmatic [hodl your shares] > 2022-09-29 20:43 | Report Abuse

Can we know the reasoning behind your sale of RHONEMA? And why MYNEWS, which has similar business model to QL's FamilyMart? A bit curious here.

Posted by Philip ( buy what you understand) > 2022-10-03 06:17 | Report Abuse

I posted on the transactions tab of why I sold rhonema. In my opinion as their main business model was reselling animal health products from foreign companies like CEVA for the swine and bovine cure and selling it in Malaysia, as well as importing Australian cows and products to grow with kulim their costs would limit competitiveness with incumbents for a very long time.

As I realized that their business model didn't pivot fast enough they are still among those companies that buy foreign and sell local, which is the total opposite of the business that I am looking tob invest into in this juncture with the high inflation and exchange rate. USA is telling you they want to be uncompetitive, so we should be looking to buy those companies that export to USA instead as they will be very well rewarded in the long run

Posted by Philip ( buy what you understand) > 2022-10-03 06:20 | Report Abuse

As for mynews, I own both QL and mynews. One is for trading thanks to another member in my telegram group sharing, the other is my long term holdings which are still growing it's revenue every quarter. As usual trading is only small amounts, while the investing portion is much bigger
>>>>>>
enigmatic [hodl your shares]

Can we know the reasoning behind your sale of RHONEMA? And why MYNEWS, which has similar business model to QL's FamilyMart? A bit curious here.

3 days ago