this is simply misleading, you cant make such comparison based on the absolute EPS alone. there are many other factors to consider such as market leader, competitive advantages, efficiency, pricing power, earnings sustainability, free cash flows, dividend yield etc etc...before u come to a conclusion how much PE multiples should the market be pricing in...
to compare with DLady and Nestle, well....speechless
Actually the author of the article only has ONE aim. That is to lure unsuspecting and naive investors, probably with greed and impatience to buy in at higher price and dumb dumb hold all the way up while they realise the profit
You are comparing HengYuan to the likes of Dutch Lady, Nestle and BAT. All of which are stable consumer counter and are rarely affected by cyclic factors.
HengYuan on the other hand is at the mercy of cyclic factors such as the volatility of crude oil prices.
Heng Yuan : Investors should take long term view 18 months to 36 Months, Huge Upside Potential
Author: 360Capitalist | Publish date: Thu, 17 Aug 2017, 12:12 PM Be patient, I didnt say overnight HengYuan's share price can reach RM37.00.
I agree. The key question is profit sustainability. The target price is set based on holding period of 18 to 36 months. At price below RM8.00, it is very safe to hold on with huge margin of safety.
The track record after Heng Yuan took over the ownership is very impressive, due to management taking the right approach to sustain the earnings of the company with solid Gross Refinery Margin:-
Q4'16.. NTA 3.37, Profit RM207 mil, EPS 69.27 Q1'17.. NTA 4.25, Profit RM279 mil, EPS 93.16
Note:- Same case for Petron Malaysia after the changed of ownership from Esso to Petron, the profit jumped.
Refinery Business Model and Change of Ownership ??? Many us us not really understand Refinery Business for the case of Shell (Heng Yuan ) and Esso ( PetronM). I believe this is due to complexity of business involving tax, investment allowance, and transfer pricing ( Buyer and Seller, same related party) and volatility of commodities price..
SHELL MAJOR PROBLEM 2011-2014 .. Not Allow to Hedge Shell is not allow to hedge using market instruments. For Shell, it had expected to sell Shell Malaysia. A former report showed that Shell Malaysia had a continuous deficit from 2011 to 2014, which even reached a deficit of 2.079 billion Yuan in 2014. After continuous deficit, Shell Malaysia was planning to sell its refining business in Malaysia or transform its refining business terminal into import, export and storage terminal. Chairman Luo Yuan of Shell Malaysia once revealed his idea to sell it in July, 2014.
We had also noticed such a problem. The international petroleum market was quite depressed in 2014. The company started a new project of 1.1 billion Yuan.( Besides, limited by regulations, Shell Malaysia could not make hedging, which expanded the deficit, said Wang Youde.) He still focused on the significance of “overseas export of domestic petroleum products, since Shell had realized a profit of over 90 million USD in the first three quarters last year.
Forward Looking 1. Earning Capability If you take longer perspective view, let say for another 6 quarters, very likely Heng Yuan can achieve EPS 50 cents per quarter. For the last 2 quarters, the EPS was 69 cents and 93 cents, which is in average 81 cents per quarter and much higher than what we are projecting at 50 cents. It is quite realistic and achievable.
2. Moat of Business Malaysia has 3 refinery players, namely Petronas, PetronM and Heng Yuan. That is always shortage of supply and the barrier of entry is high with huge capex investments. ( For example, Petronas new refinery in Pengerang cost RM20Billion for 300,000 bpd.) With China owner backing, Heng Yuan can always sell its products to China mass market.
3. Crack Spreads Rally and Gross Refinery Margin The recent crack spreads rally is mainly due to low crude oil proce and under investments in refinery facilities since 2014. Supply cannot cope with demands due to huge jump on industrial and fuel oil consumption. The under investment were mainly caused by depressing O&G market and business outlook with more electric cars target to hit mass market after 2020. This had caused many big O&G companies to slashed the investment and capex expenditures since 2014.
With strong crack spreads in decade, Asia's Gross Refinery Margin is expected to improve the profit margin of refinery business.
Just imaging crack spread from USD4.50 per barrels average in Q4'16 to current USD12.50 per barrels in August '17. With 120,000 to 156,000 refinery capacity per day, it is not surprising to see huge jump in Heng Yuan's profit and EPS in Q3'17, double or triple jump ???
(Note : Management can always use hedging instruments to sustain its profit and market risks
the bank ready to issue all the rubbish warrant to hengyuan already, if really can achieve that high, u think bank will release call warrant to make them loss?
kyy will sell off all the share before the call warrant expiry, and blame anything or anyone just like najib. however u all will believe it in anyway.
go see back supermx is a good example, before the price drop , the bank will keep issue all the rubbish warrant to let u all buy... congratulations to all holder..
If it was such profitable, I doubt Shell would've sold it off (summore at a so low price) Don't tell me they failed to see this coming. Don't you think it is too fishy?
THE GUY SAYS HRC TP IS RM 37.00, WHEN THE SHARE PRICE IS RM 7.77 IS NOT WRONG MAH!!
WHY LEH ?? IF U THINK OTHERWISE HRC TP SAY IS RM 9.00, 10.00, 11.00, 12.00..BCOS OF CAPITALIST PROMOTION CALL TP RM 37.00..U BUY RM 7.77 IS NOT WRONG LOH...!!
BCOS IF U BUY...RM 7.77....EVENTUALLY, THE PRICE IS RM 18.00 N NOT RM 37.00 U R NOT WORSE OFF MAH.....!!
ONLY PEOPLE WHO HAVE LOW,BAD AND ENVY OPINION, LIKE 3iii WHO SAYS HRC IS WORTH RM 6.00 WHEN SHARE PRICE IS RM 7.77...IS CREATING GREAT DISSERVICE TO THE ART OF MONEY MAKING LOH...!!
BCOS HE HAS PREVENTED ALOT OF PEOPLE MAKING MONIES...FOLLOWING HIS STUPID ENVY CALL LOH....!!
My advice to investors to hold on Hengyuan, if eps per quarters can sustain another few more quarters for at least 50 cents, RM37.00 will no longer be a dream. After all, petrol is something needed everyday for almost everyone and we only have 3 refinery players in Malayisa. To start the new refinery, the capex is talking about RM10B to 20B minimum.
If Petronas willing to invest RM20B in new refinery plant with daily capacity of 200,000 barrels in Pengerang, they should have realistic ROI to go for it. So, how much is Hengyuan's facility worth with daily capacity of 120,000 to 156,000 barrels. We give certain discount, it is still worth 3 to 4 times higher than its market capital.
It is massively undervalue and can become your pricey and proud holding in your portfolio. Outperform and next Bursa Darling...
if can 37 I can kena toto grand also. if can 37 why not u go lend from banks and make an MGO? all talking bull.based on the results it should be 6.00-7.00 only
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Tom
2,984 posts
Posted by Tom > 2017-08-16 18:10 | Report Abuse
这作者发白日梦,你推销的ifcamsc目前跌到面目全非