Posted by swiftwind > 2017-08-11 22:08 | Report Abuse

Thank you for sharing. This is a balanced view. The numbers seem to check out. Perhaps David or Probability may share their views on this.

Posted by eyewitness > 2017-08-11 22:14 | Report Abuse

As you last predicted Mycron's PAT for Q1/3/17 would be RM18.9 mil but actual was RM7.3 mil, why do you think as an outsider, you can calculate Hengyuan's Q2 with such precision?

Posted by choop818 > 2017-08-11 22:16 | Report Abuse

FutureEyes, you from oil refinery industry with a conscience? Whatever, thanks alot.

Posted by Jeffbkt > 2017-08-11 22:22 | Report Abuse

Not right to consider 100% of inventory are made up of only crude oil. We are not sure the ratio of crude oil and the end product but definitely not 100%.

Posted by shortinvestor77 > 2017-08-11 22:23 | Report Abuse

Wow. Wait and see.

Posted by FutureEyes > 2017-08-11 22:26 | Report Abuse

you have a point, but you can assume a margin value (X) to add to the crude price and fix a ratio (y) between the crude and products, and yet you will derive exactly the same stock loss value above.

This can be mathematically shown, but not presented on the above article in order not to confuse the readers.


Posted by Jeffbkt > Aug 11, 2017 10:22 PM | Report Abuse

Not right to consider 100% of inventory are made up of only crude oil. We are not sure the ratio of crude oil and the end product but definitely not 100%.

Posted by Jeffbkt > 2017-08-11 22:33 | Report Abuse

End product margin definitely will not follow the decrease rate of crude oil price. Anyway, you can use the previous quarter which has the stock/inventory loss to prove your calculation is correct.

Posted by FutureEyes > 2017-08-11 22:43 | Report Abuse

Fix the barrels of Crude and Product out of the 4700k barrels say 50/50.

using your reference crude oil price and refining margins at the concern starting month end ending month end you can calculate the total value of the inventory (including crude + products) respectively at both periods.

Their difference in value is the stock loss/gain.

It would be exactly the same as above if there is no change in refining margin between the reporting period above and if there is indeed a change say by 1 USD/brl drop in margins from 9USD/brl to 8USD/brl as per article above, you have to reduce the end value of the products fraction accordingly.

This will result with a greater stock loss than calculated above.


Posted by Jeffbkt > Aug 11, 2017 10:33 PM | Report Abuse

End product margin definitely will not follow the decrease rate of crude oil price. Anyway, you can use the previous quarter which has the stock/inventory loss to prove your calculation is correct.

Posted by John Lu > 2017-08-11 22:48 | Report Abuse

LOL...the calculation are out

Posted by Alex Foo > 2017-08-11 22:55 | Report Abuse

according to my google skill, i can immediately quote 3 articles proving O&G player loss due to refinery margin

but another 3 articles showing profit due to refinery margin

fuiyo, can explain?

loss
http://www.moneycontrol.com/news/business/earnings-business/significant-amount-of-inventory-loss-impacted-gross-refining-margins-ioc-2349827.html
https://asia.nikkei.com/Business/Companies/Indian-Oil-profit-slumps-45-as-refining-margins-shrink
https://www.reuters.com/article/us-marathon-pete-results-idUSKBN1AC1NF

profit
https://asia.nikkei.com/Business/Companies/Reliance-first-quarter-profit-up-8.6-on-better-refining-margins
http://www.hindustantimes.com/business-news/ril-beats-estimates-profit-rises-28-on-high-refining-margins/story-1J0qLOsdWyFfYxHKZUe8zI.html
https://www.reuters.com/article/us-hollyfrontier-results-idUSKBN1AI19F

because i bullish hrc, so i post one more profit one can? hehe...this is called confirmation bias~

https://www.reuters.com/article/westafrica-oil-margins-idUSL5N1KM5CO

Posted by Alex Foo > 2017-08-11 22:56 | Report Abuse

over long term, you must ask yourself this Q..

will hrc benefit from current refinery margin spike? see

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

short term inventory loss can be offset in next quarter, you agree with alex?

Posted by Alex Foo > 2017-08-11 23:05 | Report Abuse

i reread your article. i think you covered that. so inventory loss is a temporary phenomenon to be offset in next quarter. It means Q2 so-so, Q3 huat, right? =)

Posted by TrippleZ > 2017-08-11 23:09 | Report Abuse

Temporarily is enough to send the price down to hell.

Posted by FutureEyes > 2017-08-11 23:09 | Report Abuse

yes

Posted by Alex Foo > Aug 11, 2017 11:05 PM | Report Abuse

i reread your article. i think you covered that. so inventory loss is a temporary phenomenon to be offset in next quarter. It means Q2 so-so, Q3 huat, right? =)

Posted by Alex Foo > 2017-08-11 23:12 | Report Abuse

so meaning wait Q2 only buy la? ok la, monday i sell~ buy back oct =D

Posted by TrippleZ > 2017-08-11 23:15 | Report Abuse

You can't sell now bcos superinvestor will push it to sky high. hihi

Posted by Alex Foo > 2017-08-11 23:18 | Report Abuse

can la, i sell now, my lot so cute, ppl wont notice one~ haha

Posted by John Lu > 2017-08-11 23:18 | Report Abuse

I use calculator count...eps is 91c for Q2

Posted by Alex Foo > 2017-08-11 23:18 | Report Abuse

wait, you mean Q2 price wont drop? earning 17sen sure drop wor....that time i collect can?

Posted by Alex Foo > 2017-08-11 23:19 | Report Abuse

ah john, wait u publish article leh....must give 'balanced' view to i3 community right? =)

Posted by John Lu > 2017-08-11 23:20 | Report Abuse

I lazy write article la...but my prediction is 91c mah

Posted by Alex Foo > 2017-08-11 23:22 | Report Abuse

actually i aim 171 sen only....i only ask for PE 5....but Q3 memang sedap la....

Posted by TrippleZ > 2017-08-11 23:22 | Report Abuse

See Jaks, reported lost last time also shoot up sky high. Thanks to superinvestor. Hihi

Posted by paperplane > 2017-08-11 23:32 | Report Abuse

Hmmmmm,then how to explain Q1Eps?

Posted by VenFx > 2017-08-11 23:43 | Report Abuse

This is fair and balance job.
Thx FutureEyes ....

Maybe should someone put through a simulations by different price range in qtr time frame.... who has the closest spot he win ...hehe

Posted by VenFx > 2017-08-11 23:44 | Report Abuse

Would be good if an get my A.i. calculator for the Xmast present from Santa.

Posted by paperplane > 2017-08-11 23:52 | Report Abuse

But most report I read suggest very minimal impact from stock inventory loss! Even petron Corp report speedo confirm that. I guess, similar to hengyuan as well. Simply calculate and jump into conclusion it will be big loss is not responsible

Posted by Stock Kingdom > 2017-08-12 00:31 | Report Abuse

Good works! the results, basis & calculations are there. Any one challenge the basis using another basis? Look forward to read more debates or calculations.

Don't come out & just say my friend lah, my grandfather lah or even my calculator. These are jokes, not basis.

Posted by LA777 > 2017-08-12 06:54 | Report Abuse

This is misleading calculation, especially for the value stock inventory, the price you put in is just estimation, if this is the case, better put the same price, say USD53/barrel, the stock inventory no impact at all!

Posted by LA777 > 2017-08-12 07:00 | Report Abuse

If based on my calculation, it should be around 89 sen.

Posted by LA777 > 2017-08-12 07:13 | Report Abuse

Number of days is 91 not 90.

Posted by Icon8888 > 2017-08-12 07:24 | Report Abuse

Interesting information. Let's just wait for result to see whether the author is correct or wrong. I am open minded

: )

Posted by 3iii > 2017-08-12 08:25 |

Post removed.Why?

Posted by r°Moi > 2017-08-12 09:18 | Report Abuse

.

90 DAYS.. IS JUST TOO PERFECT LOH... NO DOWNTIME CANNOT BE LOH??

FACTOR IN 3 TO 5 DAYS AND SEE... OLD PLANT AND MACHINERY LOH

.

Posted by r°Moi > 2017-08-12 09:22 | Report Abuse

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IF STOCKHOLDINGS IS JUST 40 DAYS... AND IF ON FIFO.... THE VALUE OF INVENTORY... FOR CALCULATING STOCK LOSS... SHOULD BE ROLLED BACK TO JUST 22 MAY 17 LOH... NOT 1 MAR 17 MAH



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Posted by r°Moi > 2017-08-12 09:24 | Report Abuse

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YES.. THE DIFFERENCE MAY HIT THE PRODUCTION COST.... POINT IS... CANNOT TAKE THE CRACK SPREAD.. JUST OFF THE SHELF... AND USE MAH.

VERY MISLEADING LOH


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Posted by r°Moi > 2017-08-12 09:26 | Report Abuse

.


IF PRICE REMAIN CONSTANT AT 53.... HOW TO GET STOCK GAIN IN NEXT Q... DO NOT UNDERSTAND LOH...

VERY MISLEADING LOH


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Posted by supersaiyan3 > 2017-08-12 09:27 | Report Abuse

Thanks for the hardwork.

Posted by r°Moi > 2017-08-12 09:28 | Report Abuse

.


WHEN SUPER INVESTOR SEE PROFIT DROP.... HE WILL SELL LOH... NOT FOLLOW HIS GOLDEN RULE MAH....


SOMEMORE... MARGIN ACCOUNT A BIT STRECTED MAH...


AND SELL THIS ONE NO NEED TO REPORT MAH... BELOW 5% MAH


.

Posted by r°Moi > 2017-08-12 09:29 | Report Abuse

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CAREFUL LOH.... WHEN SUPER INVESTOR SELL... THE PRICE WILL DROP A LOT MAH.


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Posted by r°Moi > 2017-08-12 09:35 | Report Abuse

.




BETTER RUN FIRST LOH... DO NOT WAIT TILL SUPER INVESTOR SELL LOH


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Posted by John Lu > 2017-08-12 09:37 | Report Abuse

Investment is an art...its much depend on how you look at the business, estimation of the profit etc. Anything could happen pre-Q2 announcement.

2 groups of people here. One group i.e OTB, KYY, paper, Icon8888, Venfx, David, LA777, myself etc confident with HYC because of crack spread all time high & another group of people estimate below average result for Q2.

Just cross the fingure and wait for the announcement day. Cheers!!

Posted by vinc3362 > 2017-08-12 11:05 | Report Abuse

Above article datas are biased.....................

HRC main product is gasoline, why use jet fuel kerosene futures to substantiate your figures..............

Why use 26th June Brent crude prices when 30th June is the month end and is on Friday, a trading day. The pricing differential is already nearly USD 3 per barrel for that few days of trading.

Got to go back to work, will work out the details later.....but for sincere investors, please double check the data and don't follow blindly.

Posted by ktsk88 > 2017-08-12 11:26 | Report Abuse

Whatever it is, the inventory as at reporting quarter will depend on oil pricing and the inventory valuation gain/loss will definitely affected the bottom line and also the stock price too.

Thanks for highlighting the issue.........consider a fair view minus the calculations.

Posted by fattmoney > 2017-08-12 11:28 | Report Abuse

Just to add to vinc3362 comments on usage of Brent price on 26 June, if you really want to use 26 June, then it should be compared to 27 March price (26 March is a weekend) to be consistent, which is about USD51. Hence, the difference would still be smaller by USD2 (stock losses would be less).

Posted by ckcc > 2017-08-12 11:29 | Report Abuse

FutureEyes you not from Affin IB? Why you cover same stock like OTB?

Posted by BornToSpeculate > 2017-08-12 11:30 | Report Abuse

Inventory loss is common and should be the same for all oil refining operations. The question we should be asking the past 2 quarters how much was the 'extra-ordinary gain on inventory'.

Obviously we cant just take crack spread and use this as the only input for profitability.

Super investor if you ask me, would have bought in cheap when HengYuan first reporting their Q4 turnaround profit of 200m+. Knowingly that there are not much shares in circulation, this is the best down to pare down some holdings when there is volume.

Posted by InsiderR > 2017-08-12 11:42 | Report Abuse

Q2 inventory loss can be recovered in q3? Nobody can guarantee. How well the crude oil will perform in Aug & Sept still unknown. And nobody knows which day exactly HRC place order for crude. Buy high sell low is very likely, everythg depends on how good are HRC crude experts. Also, pls take note HRC has no hedging as of today. For inventory loss, u may go through Shell previous reports, it is possible inventory loss can wipe out all your margin when crude up/down tremendously. It is not as simple as just minus crude price at end of the mth/qtr with early of the mth/qtr. Anyway, counting down remaining +/-10 trading days for Q2. Good lucks!

Posted by ckcc > 2017-08-12 11:45 | Report Abuse

If HRC crude is expert why last year Hengyuan can drop below RM 2? There are also some loss qtrs.

Posted by RedGreen > 2017-08-12 12:02 | Report Abuse

Why hold 40 day stock ? Are they preparing for refinery maintenance or inspection ? Petron corp philipines shutdown 45 days for the maintenance ?
Just suggesting.