Posted by Newmaster > 2017-06-30 20:44 | Report Abuse

Up to you, no promises it would go up, lol. Or buy only when up and up later ? Haha

Posted by Newmaster > 2017-06-30 20:50 | Report Abuse

Grandmaster probability, are you still working on the estimate of its retail segment as discussed earlier ?

Guess a lot of us here are still awaiting. Sincerely hope you could share the forescast if you could. Thanks in advance.

Posted by mamatede > 2017-06-30 22:14 | Report Abuse

so how to brain this? Oil price go up, their refinary margin decreases. oil price go down, their retail suffer... apa la.. both also loosing ah?

Posted by davidtslim > 2017-07-01 00:09 | Report Abuse

Brent oil stay above USD48 today, mean their stock loss will be reduced while they still enjoy decent refinery profit. Of course, their petrol retails biz is is as usual (even boost up by Raya holiday in June)

Posted by skyea > 2017-07-01 02:00 | Report Abuse

march quarterly report, part b section 12 , 3rd para, lies this statement made by the company:

"AS OIL PRICES RALLIED, MARGINS ALSO IMPROVED"

so this coming result WTI fell from 54 to 42 USD, its not rocket science to know that margins are going to take hits

building is burning and about to collapse, and you are still sitting there like a piece of wood. do something!

Posted by stockmanny > 2017-07-01 10:37 | Report Abuse

Everyone is collecting low. The only wood here is you ma ! Didnt like the company but wasting time stay up so early morning , what you gain, wood !

Pls la, who told you reference price used is WTI ?? Really a wood trying to be smart.


Stock: [PETRONM]: PETRON MSIA REFINING& MKTG BHD
Jul 1, 2017 02:00 AM | Report Abuse

march quarterly report, part b section 12 , 3rd para, lies this statement made by the company:

"AS OIL PRICES RALLIED, MARGINS ALSO IMPROVED"

so this coming result WTI fell from 54 to 42 USD, its not rocket science to know that margins are going to take hits

building is burning and about to collapse, and you are still sitting there like a piece of wood. do something!

Posted by paperplane2016 > 2017-07-01 14:06 | Report Abuse

https://m.facebook.com/story.php?story_fbid=1597248090286804&id=1200094743335476

Posted by stockraider > 2017-07-01 14:29 | Report Abuse

The fast improvement in crude oil price last wk will narrow the inventory losses loh...!!
This good for petron and hrc mah...!

Also remember to pump petrol b4 weds, bcos next wk petrol price will go up loh...!!

Most important Petron & Hrc will report good june earnings loh...!!

Posted by stockraider > 2017-07-01 15:12 | Report Abuse

Petron Malaysia has a bright future ahead if... - felicity
Author: Tan KW | Publish date: Fri, 30 Jun 2017, 06:18 PM
Friday, June 30, 2017

Back in 2004, I remember I invested into a stock which would have provided a 10 bagger. That stock was Digi - where at that point of time after the acquisition of the telco from Vincent Tan by Telenor, it had made a dramatic turnaround from losing market share and eating up cashflow to drastically improving its cashflow until it was debt free within 2 years. That Digi which was bought at RM5 during then has split into 10 shares and many "x" of dividends. I of course being not very clever, sold most of them off much too early although I made some good returns.

That discovery will not come very often and once a while, I thought I have seen some resemblance of the same kind of stock or company - but either I was too slow and stupid to make decision or it actually created a false sense of happiness. In any case, we do not need to find a 10 bagger but my believe is to continue to look for a stock which has that similar track.

Petron is a stock which I stumbled upon when reading several comments on the oil retailing stocks. Since then, and over the last 2 - 3 weeks, I have taken an interest to understand the petroleum retail business after at first looking at Petron Malaysia's financials for the first time (in detail).

I am not an expert in oil and gas businesses, however I believe I am good enough with my observation as well as investment research if I put enough efforts to understand the business.

[I had a similar stock which I had bought - PDB probably back in 1996 (or sometime around then), I had the stock for around RM3. Again, I did not wait long enough to reap its RM24 today (and a lot more of its dividends). During then, also I was way too raw to understand these kind of businesses.]

In mentioning oil and gas, actually Petron - unlike companies like Icon Offshore, UMW O&G, Bumi Armada etc. etc. - is in a much different type of business. It is in the retailing business which Lazada, Amazon or 11street cannot replace. (It can be threatened by Tesla or BYD though)

Just to get things started, what makes me spending time to look at Petron is basically because of the below - its net cash or debt position over a short period of time. Of course in investment, it is not as simple as that, but the below signifies strong and consistent free cashflow.

Net Debt improved dramatically from RM1 billion in 1Q14 to almost no debt now

Before, we even look at numbers in detail - many would have (as well as me), been wondering why would I invest into a Philippines controlled oil and gas company where firstly the country does not even have a strong O&G industry.

Then, as I have seen what really happened to BP (which turned into BHP, under Boustead) as well as Projet (if anyone remembers - which was later sold to Shell) - the same could happen to Petron. It is not an easy business. This is not entirely a technology business but involves operational execution strength and marketing - which is what San Miguel, the parent company of Petron is strong at.

One may also say that Petron is also doing refinery then retailing. Correct. That is one of the concerns, but it seems that it is able to cope well. Its 88,000 barrel/day refinery in Port Dickson is smaller than competitors like Petronas (obviously) and Hengyuan (bought from Shell) at 156,000 barrel. However, it manages to bring back profitability from the refinery - which is important.

What is questionable is that why was it Esso which sold the entire business (refinery and retail) to Petron back in 2012 could not really make much money from this refinery - but Petron could as it has shown especially over the last 8 quarters.

Petron has turnaround from losses in 2013 - 2014 to strong profits over last few quarters
Of course, when one questions oneself - if it could be such a good business, why would Esso sell. And in that same period Shell sold its refinery to Hengyuan while BP has left the country having sold the retailing arm to Boustead. These are the oil majors leaving the country in the downstream operations except for Shell and Caltex (owned by Chevron) which keeps the retailing business.

That answer lies in them being "focused" and the Malaysian market being not big enough. However, what is not big enough for Esso is big enough for San Miguel. In the era of consistent and extreme competition, the big giants can only focus on few things that they think they can be better and make much more money than others. ExxonMobil, Shell and BP are strong in exploration and pretty much the upstream business - an area which not all players can be deemed to be good at. Beyond technology, it is also involving geo-political relationship. Why would then, a CEO of Exxon-Mobil be given a Secretary of State position...

Posted by stockraider > 2017-07-01 15:12 | Report Abuse

At the same time, as many would know - this business is getting challenged from the shale guys (using a different technology and business model). They are also being challenged from the alternative energy guys such as solar, battery technologies, wind, biofuel etc. Hence, downstream, refining especially is the least of their problem.

It is like manufacturing to Apple and Google.

Petron actually was having a similar deal back in 1973 when Esso sold its business to the government of Philippines. Today, Petron is the largest petrol station operator in Philippines with 40% of market share and operating 1900 stations. In Malaysia today, Petron has close to 600 by now being the 3rd largest player after Petronas (1000+) and Shell (900+). That 600 stations over time, however may bring in very significant return to San Miguel group as one must note that Malaysian oil consumption is about 600,000 barrels a day while in Philippines it is below 300,000 (if I am not wrong).

With that backdrop, more importantly to us investors, Petron is willing to invest in a competitive ground with the backdrop having players like Petronas and Shell. It is growing at a pace of 30 - 50 stations a year now while the likes of Shell is growing in teens. Caltex (400+ stations) and BHP are even further behind, if I am not wrong.

Although the petrol retailing business is growing at just an average 3 - 5% yearly, Petron is probably the ones that has the highest growth. Fighting against negative perceptions in the first few years of its operations, it is now growing faster than Shell and Petronas (which I will show in my future article). This is probably as I believe, the other guys have a larger giant to slay. Shell, Caltex have much bigger agenda to worry about than Malaysia's petrol station business while Petronas will continue to worry over the low oil price environment and its revenue contribution to the government. BHP? Well nothing much to say. Maybe not so competent.

Further from the very nice cashflow which I shown above, Petron is now trading at just below RM2 billion (RM7.25) market capitalisation. Against the significantly bigger giant of about 2.6x revenue larger, Petronas Dagangan - it is really cheap as PDB is now trading at RM24 billion market capitalisation. Translating into PE over last 12 months, it is even a nicer story. Nevertheless, I am also careful over the fluctuation in the oil price which will have some impact to the bottomline numbers - hence I am not reading too much into the profit numbers over the last 2 - 3 quarters. I believe the rise and drop in oil price has some impact as it has certainly has some inventories to hold. When oil price drops, the inventory value will drop, vice versa.

Over time, however this should not be an important benchmark - as we cannot do a projection over the price of oil into the future. The more important benchmark is whether their refinery is creating a healthy margin and secondly - is it able to sell through its petrol pumps as most of the oil that it refines - goes to the pump - if not mistaken. THAT, over the last 2 years have shown mark improvement for Petron - and it is a very important denominator for this business.

I know, I am a bit late in the game - as Petron climbed from around RM5 - RM6 last year - at its current valuation and if it is manages to continue its growth momentum, this is not expensive at all. In fact, it is cheap.

(Over next articles, I may want to discuss the impact of technology - electric cars etc. and introduce more financial numbers towards this business. Obviously, I do not have all the answers.)

Posted by paperplane2016 > 2017-07-01 18:27 | Report Abuse

Omg! Felicity buying? I wanna follow!!!!

Posted by paperplane2016 > 2017-07-01 18:41 | Report Abuse

I am going big to petronm

Posted by musangfoxking > 2017-07-01 18:49 | Report Abuse

not a Humpty Dumpty?

Posted by stockraider > 2017-07-01 19:07 | Report Abuse

How Low Oil Prices Affect Downstream And Upstream Oil Companies In Different Ways
Jan. 16, 2015 10:46 AM ET|
Includes: SNP
MarketGyrations
MarketGyrations
Long/short equity, value, contrarian, Growth
(198 followers)
Summary

Cheap crude hurts upstream oil companies, but can also benefit downstream companies under certain circumstances.

The bottom line of certain companies has been distorted by price controls, which can be lifted with the drop in oil prices.

Opportunities exist due to overreaction caused by the sudden and drastic drop in oil prices.

As the price of crude oil has fallen, so too has everyone associated with it. Every company that's directly or indirectly connected with oil has seen its share price decline by a significant margin. That's not surprising considering the price of oil has fallen by more than half over the course of several months.

Oil is going down

The natural inclination for people is understandably to dump everything that's even remotely connected to oil. That includes every company that's involved in the oil business. The general assumption is that low oil prices will hurt oil companies.

However, a decline in the price of oil does not have to be a bad thing for every company involved in the oil industry. To understand why, it's important to differentiate between upstream and downstream players when it comes to oil.

Cheap crude oil can be a major headwind, especially in exploration and production

Basically, the difference between upstream and downstream companies is that the latter are further removed from the actual extraction of crude oil from the ground than the former. Upstream companies are more directly involved in the actual exploration and production of crude oil.

When the price of oil is relatively low, then this will have an immediate impact on these companies. In order for exploration and production of crude to be commercially viable, the price needs to be high enough to make sense from a financial standpoint.

DOWNSTREAM PLAYERS HAVE AN ADVANTAGE BCOS ITS MATERIAL INPUT IS CHEAPER, THUS IT USES LESS WORKING CAPITAL TO DO BUSINESS LOH.
ALSO A CHEAPER OF FINISHED PETROLEUM PRODUCTS ENCOURAGES MORE CONSUMPTION HENCE ENHANCING SALES VOLUME LOH...!!

Posted by davidtslim > 2017-07-01 19:55 | Report Abuse

Probability: I hv one question on your Throughput figure of 4300k barrels per quarter. How you get this figure? Based on management reply in recent AGM, its refinery capacity running at 60%. Its daily max capacity is 88k bpd. 60% should get 52.8k per day which lead to 4752k barrels per quarter.

Posted by Jeffbkt > 2017-07-01 19:59 | Report Abuse

Hi Probability,
Hope you wont mind if I ask a stupid question here. May I know whether the total amount of inventory in the financial report refers to the finishing product or both the raw material and finishing product.

Posted by davidtslim > 2017-07-01 20:40 | Report Abuse

First of all thanks for your confirmation and advise on my calculations. Brent oil price (48.2) is based on closing price at 00.00 time on 1 July.
Regarding your concern on the the Service stations inventory (10 days claimed by some news), I think now they will reduce to 3-4 days inventory as weekly pricing system (3-4 day is rule from government if I am not mistaken). As what I read the news, dealers seem cannot determine or decide the volume of gasoline to keep as its depending on the companies (Petronm). I think dealer will suffer some inventory loss even 3-4 day stock but I wonder Petronm need to share the loss or not?

They mentioned in their AGM their profit per litre is 5 sen (not sure fix or depend on weekly price movement). Anyway, from management reply in AGM, they are confident on repeating the Q1'17 profit. I think they also do some hedging on their finished refined product and also import price of gasoline so that their risk is minimized.

As per Jinhou's comments, is it when RM appreciate against USD, Petronm will enjoy forex gain? I tried to read AR report on its sensitivity on its foreign currency (seem it like RM to appreciate but I am not too sure).

Posted by Truetalk > 2017-07-02 08:47 | Report Abuse

Oh, crude also gettting stabilise with Petronm price hovering in steady mode too. q2 result looks promising, juz needs patience

Posted by stockraider > 2017-07-02 10:30 | Report Abuse

Contrarian bet: Why I sold PETRONM?

Author: Bullmarketz | Publish date: Sat, 1 Jul 2017, 08:48 PM

Very simple. PETRONM plans to spend at least US$1.5 billion to expand capacity of its oil refinery in Malaysia.

At the AGM last week, PETRONM are said they are reviewing options on the US$1.5 billion capex, including funding with debt and equity.

3 possible options I can think of

If they use debt, borrowing will increase RM6 billion! They may cut dividend for many years.
Private placement or rights issue means huge dilution to current shareholders. PETRONM has 270 million outstanding shares. They may issue 800 million new shares to raise RM6 billion.
50/50. RM3 billion debt and RM3 billion private placement/ rights issue also means huge dilution. Market capitalization for PETRONM is RM2 billion only.

All options are very dilutive and very risky to me. I decided to sell.

I welcome constructive comments.

RAIDER SAYS IT IS SHORT TERM THINKING ABOVE LOH...!!

1. PETRON HAS PROVEN HIGHLY PROFITABLE & THIS CAN BE SEEN THEY HAVE THE IMPRESSIVE ABILITY TO PAY DOWN RM 1.0 BILLION DEBTS IS LESS THAN 3 YEARS.

2. SINCE PETRON IS HIGHLY PROFITABLE, DON U THINK EXPANSION IN CAPACITY ENHANCES ITS LONG TERM GROWRH AND MAKE IT HIGHLY PROFITABLE MEH ?

3. DO NOT WORRY ABOUT DEBTS, IF NOT VIABLE BANKS WOULD NOT LEND MAH..!!

Posted by suregain > 2017-07-02 10:40 | Report Abuse

U need expansion ma, of course need money la.. u need to compromise lo.. takut ini takut itu... put in fd saje,la

Posted by Equityengineer > 2017-07-02 10:58 | Report Abuse

Expansion is. Not going to cut dividend la . It's expansion to increase the capacity// so long term it's will be more and current dividend will be mainataimed.

Posted by Equityengineer > 2017-07-02 11:07 | Report Abuse

Corp want to expand the business and there is write up saying it's bad and time to sell. I can tell you even if Petron is super cash rich and they use their cash to fund expansion some superficial analyst will say , their cash will decrease and so dividend will be slashed. So both ways expansion means sell. And this foolish way of thinking.

They are expanding means believe in thier business , they have plans for future so this is Petron should buy instead of sell.

Posted by stockraider > 2017-07-02 11:11 | Report Abuse

RAIDER THINK PETRON WILL CUT DIV IF EXPANSION....BUT OK MAH...JUST INVEST A LONGER TIME FRAME....THE PAYBACK WILL BE VERY HIGH ONCE THE FRUITS OF EXPANSION COME IN MAH...!!

THINK LONGTERM MARATHON, DON JUST SPRINT...SUSTAIN LONG TERM GIVE HIGHER REWARDS MAH...!!

Posted by Truetalk > 2017-07-02 11:21 | Report Abuse

Cut or no dividend cos of expansion, not likely. Why ?

Cos Petron Corp needs the dividend from Petronm to fulfill its div policy set at 25% every yr which the parent promised its shareholders d.

So, logic tells us not likely leh.

Posted by Truetalk > 2017-07-02 11:24 | Report Abuse

Would aggressively top up again if lower than 7, hope for the best return

Posted by stockraider > 2017-07-02 11:38 | Report Abuse

Cut or no dividend cos of expansion, not likely. Why ?

Cos Petron Corp needs the dividend from Petronm to fulfill its div policy set at 25% every yr which the parent promised its shareholders d.

So, logic tells us not likely leh.

NOT TRUE LOH...SAN MINGUEL ARE RICH COMPANY...THE BIGGEST COMPANY IN PHILLIPINE...THEY ARE EVEN BIGGER THAN MAYBANK.

THEY ARE WILLING TO INVEST GO FOR LONG TERM LOH...THE PETRON DIV IS PEANUTS TO THEM LOH...!!

SO RAIDER SAYS BE PREPARE TO GO FOR LONG TERM & DIV CUTS..IF CANNOT TAHAN SO LONG BETTER CABUT LOH...!!

AS FOR EXPANSION IN CAPACITY COSTING USD 1.5 BILLION OR RM 6.4 BILLION U MUST LOOK AT IT IN CONTEXT LOH....HRC WITH A CAPACITY OF 125K BARREL A DAY ONLY HAVE A FULL MKT CAPITALZATION OF RM 1.6 billion loh..!!

So it is either HRC is damn undervalue or new refinery plant investment is damn expensive loh...!!

Raider think both loh, new refinery plant is damn expensive loh...ARAMCO investment in Petronas complex in Tg pengerang value at Rm 62 billion for a capacity of 400 barrel a day loh...!!

Posted by Alex Foo > 2017-07-02 13:49 | Report Abuse

follow probability sifu surewin one =D

Posted by probability > 2017-07-02 15:15 | Report Abuse

Davidstlim...if you dont mind, i suggest you delete the basis of derivation you had presented... enough had been presented and discussed. Everything is reciprocal..i see no use presenting it here further.

This way we can stand to gain from market inefficiencies in future due to say crude price dip.

Posted by stockmanny > 2017-07-02 15:16 | Report Abuse

Nasib baik, sudah cetak the presentation

Posted by probability > 2017-07-02 15:16 | Report Abuse

ha ha...smart one u!

Posted by Bullmarketz > 2017-07-02 18:46 | Report Abuse

https://klse.i3investor.com/blogs/Bullmarketz/126535.jsp

Posted by wltan22 > 2017-07-02 20:25 | Report Abuse

I hope that tomorrow got cheap sales, below 7 will be the best....ready to catch more...as the future of this company looks too promising... thanks for the well planning management to bring in new refinery, can't wait the company to become 10Billion company in future. Mother company San Miguel is one of the largest conglomerate in Philippines maybe can considered as one of the world also, I can't see anything can go wrong, as Petron Philippines has the know how to manage such project. As this big project coming in sure attract a lot of institutional investors, as now we can see the share price not moving much due to iliquidity. For those think that is too risky please sell to other investors has great fate on the company...

Posted by sheldon > 2017-07-02 21:08 | Report Abuse

I truly hope that you're right wltan22

Posted by wltan22 > 2017-07-02 21:26 | Report Abuse

I also hope that I'm right...but nobody perfect, above just my personal opinion, not a buy or sell call...for those who interested, please do your own research... cheers

Posted by davidtslim > 2017-07-02 22:45 | Report Abuse

Probability: I hv deleted.

Posted by probability > 2017-07-02 22:47 | Report Abuse

he he...thanks david...
lets contain the 'Qi' force within us...

Posted by williamtkb > 2017-07-03 10:41 | Report Abuse

Up up up....sell sell sell....buy buy buy.....huat huat huat ah

Posted by invest turtle > 2017-07-03 12:04 | Report Abuse

Price rebound

Posted by paperplane2016 > 2017-07-03 12:29 | Report Abuse

Fortune bbullz, you collecting?

Posted by shidayea > 2017-07-03 14:02 | Report Abuse

I'm waiting rm10..x jual punya buat masa skrg...mana en kadir?

Posted by Truetalk > 2017-07-03 15:34 | Report Abuse

Yup, crude has climbed further. Petronm also saw momentun

Posted by veln82k6 > 2017-07-03 17:08 | Report Abuse

Not bat. Thank you trade view

Posted by williamtkb > 2017-07-03 17:12 | Report Abuse

Can easily break 8 this week. Stronger rebound than hengyuan. Huat ah

Posted by stockraider > 2017-07-03 17:15 | Report Abuse

Upside for both petron & Hrc loh....!!

People are willing to invest in these highly profitable & low PE and high EPS stock with a long term view loh...!!

They will reaped huge rewards going fwd loh...!!

Posted by Petronm > 2017-07-03 17:28 | Report Abuse

Eh, im doing well today, hooray !

Still a lot energy inside me. So, shld continue up up up

Posted by wltan22 > 2017-07-03 17:31 | Report Abuse

haha... that's good one, Petronm, you sure got a lot of energy, a big like to you...

Posted by Woo Khai Thim > 2017-07-03 17:50 | Report Abuse

My TP RM8.5

Posted by leelc99 > 2017-07-03 20:23 | Report Abuse

Hahaha when I read this I want to laugh! https://klse.i3investor.com/blogs/Bullmarketz/126535.jsp

Posted by paperplane2016 > 2017-07-03 21:12 | Report Abuse

Auto. Run up back.

Posted by Yu Jin > 2017-07-03 21:16 | Report Abuse

remember to fill PETRON. not other fuels.