Posted by cola > 2017-08-04 09:24 | Report Abuse

Thanks David Lim for your hard work and sharing. Have learned so much about the refinery business from your recent articles on Petronm and HengYuan.

Posted by Alex Foo > 2017-08-04 09:30 | Report Abuse

thanks David. Truly homework done to spoonfeed me haha. I need to be reminded to bank on the crack spread. can't wait to see the coming QR and PE revision =)

Posted by musangfoxking > 2017-08-04 09:32 | Report Abuse

very well researched report!!!of the highest std!!!!! tks for the good read

Posted by Alex Foo > 2017-08-04 09:35 | Report Abuse

durian king, why no see u post article one? always drink starbucks only haiyo

Posted by teoct > 2017-08-04 09:50 | Report Abuse

Good write-up and cover all the important issues, especially the electric car part.

The crack spread would stay high for the coming 6 to 9 months as now is summer time in the northern hemisphere and it is peak season for holidaying and thus use of transportation, especially land. Yes, sibeh heng....

Posted by speakup > 2017-08-04 09:51 | Report Abuse

in Europe & US, ppl go to the park on weekends to enjoy fresh air & do sports.
in Malaysia, ppl go to the mall on weekends to enjoy air-cond & window-shopping

http://www.theedgemarkets.com/article/never-oversupply-shopping-malls

Posted by soojinhou > 2017-08-04 09:54 | Report Abuse

Thank you for the effort to formalise all these info into a easy to read writeup.

Posted by paperplane > 2017-08-04 09:59 | Report Abuse

GREAT!

Posted by stockraider > 2017-08-04 10:03 |

Post removed.Why?

Posted by Booyah > 2017-08-04 10:21 | Report Abuse

Love your writing style. Sibeh easy to follow.

Posted by probability > 2017-08-04 10:27 | Report Abuse

well researched presentation!

Posted by njue76 > 2017-08-04 16:08 | Report Abuse

bila nak merah..nak load lagi nih...

Posted by tftey > 2017-08-04 16:14 | Report Abuse

Very professional write up. Just want to add a point. Current scenario is unlikely to attract new investment into the distillate plant, hence existing cracking plant is going to enjoy good margin for long period of time.

Posted by probability > 2017-08-05 14:38 | Report Abuse

The implications:


http://www.cmegroup.com/apps/cmegroup/widgets/productLibs/esignal-charts.html?code=D1N&title=AUG_2017_Singapore_Mogas_92_Unleaded_%28Platts%29_Brent_Crack_Spread_&type=p&venue=0&monthYear=Q7&year=2017&exchangeCode=XNYM

1 USD rise = 14.4 cent eps/qtr = 60 cents/annum

Using a PE of 10 (remember you only use PE lesser than 10 when you incorporate uncertainty in earnings - to discount it),

10 x 0.60 = RM 6

Meaning this change in Refinery margin by 1 USD/brl should theoretically raise the HRC price by RM6 from its current price.

If some are not convinced and would like to use a PE of 5 as per very conservative market rating, then it immediately deserve to rise by RM 3 for every rise in Refinery margin by 1 USD/brl....

unless the only exception is that u believe it will definitely go down from here.....


perhaps it will......perhaps it wont.