Posted by stockraider > 2022-06-01 11:37 | Report Abuse

U look at Petron , why is it superior than Hengyuan ??

1. Petron is integrated...it sell its petrol directly to consumers no need shell to retail its petrol mah!
2. Hengyuan...depend on Shell....come expiry of the distribution agreement....HY is dead duck loh!
3. Hengyuan cannot afford to pay div but Petron can afford to pays decent div mah!
4. Petron actually make more money than Hengyuan mah!

Posted by stockraider > 23 hours ago | Report Abuse

Already proven Hengyuan is taken position in derivative & lose monies mah!

Thus this scenario will not happen mah!
No need to take unnecessary risk loh!

Petron is your answer mah!


Petron annualzed EPS Rm 1.56 mah!

Hengyuan annualized EPS Rm 0.64 loh!

Surely Petron should rate higher mah!

Also got div 20 sen propose for Petron mah!

Posted by VincentTang > 2022-06-01 12:06 | Report Abuse

If I am Petronm investor, I will sell all Petronm and move to Hengyuan lah.

probability: For PetronM next qtr results do not expect more than 30 cents EPS - if you are happy with it - go for it - thats all i can say

Posted by stockraider > 2022-06-01 12:07 | Report Abuse

Luckily u r not petron investor loh!

Bcos u will do alot of disservice to your family wealth mah!

Posted by VincentTang > 5 seconds ago | Report Abuse

If I am Petronm investor, I will sell all Petronm and move to Hengyuan lah.

probability: For PetronM next qtr results do not expect more than 30 cents EPS - if you are happy with it - go for it - thats all i can say

Posted by VincentTang > 2022-06-01 12:12 | Report Abuse

I expect PetronM will big drop after announce Q222 result because profit < 30 cents EPS.

Posted by stockraider > 2022-06-01 12:33 | Report Abuse

Good Corp governance!
Strong Crack spread how to drop leh ??



Posted by VincentTang > 19 minutes ago | Report Abuse

I expect PetronM will big drop after announce Q222 result because profit < 30 cents EPS.

Posted by Jerichomy > 2022-06-01 12:39 | Report Abuse

Who delete my comments

Posted by brian3381 > 2022-06-01 12:57 |

Post removed.Why?

Posted by Johnzhang > 2022-06-01 14:05 | Report Abuse

As at 31/3/2022 closing, The nett Derivative Liabilities (ie derivative asset - detivative liabilities) for petronM and HY are as below :
PetronM : (RM52.06 mil)
HY : (RM407.32 mil)
Can any financial accountant help to explain what is the impact of subsequent qtr P&L ?

Can any

Posted by Johnzhang > 2022-06-01 14:10 | Report Abuse

The euphoria of getting multi shipment of discounted Russian crude may be overplayed.
I suspect, the purchase of Russian Crude is done thru' HY's parent company in China and the benefit of the discount may have been fully reaped by the parent company . That is how foreign parent company use the transfer pricing strategy to siphon profit out .

Posted by Johnzhang > 2022-06-01 14:15 | Report Abuse

In the case of HY, high crack spread may not translate to high profit as evidenced in Q1 2022 results due to overwhelming derivatives losses which no one can practically foresee. Hedging thru derivative tools supposed to protect margin from higher the normal crack spread in q1 2022. That certainly not the case we see.

Posted by Johnzhang > 2022-06-01 14:25 | Report Abuse

Historical performance comparision :
EPS Q1 2022 - Petron 39.3 sen , HY 15.82 sen
EPS 2017-2021 (5 year average) - petron 76.44 sen, HY 88.52 sen
EPS 2012-2021 (10 years average) - petron 52.56sen , HY 19.73 sen.

Dividend 2017-2021 (5 years total) Petron 82 sen, HY 6 sen
Dividend 2012-2021 (10 years total) Petron 152sen , HY 6 sen

Posted by Johnzhang > 2022-06-01 14:29 | Report Abuse

@Probalility,
You mentioned that PetronM is a simple refinery that produces >30% Fuel Oil yield at negative crack spread. For the benefit of all readers, can you clarify what is the Fuel Oil product you refer to ?
Per annual reports , PetronM's refining crude to gasoline, diesel, LPG and aviation fuel and all these products are enjoying high positive crack spread.
It also appear to me that the so called Fuel Oil negative crack spread did not affected profitability of PetronM at all. NPAT Q1 2022 after charging RM230 realised and unrealised derivative loss was RM106.4 mil (39.4 cent/share). Without the derivative loss, NPAT would have been $281.2 mil ($1.04/share)
I wonder what is the significant of Fuel Oil negative crack spread ?

Posted by Johnzhang > 2022-06-01 14:30 | Report Abuse

@ probability,
I would also like to get clarification of your below statement on petronM refining capacity .
It is definately NOT true that petronM is less than 1/4 of HY. PetronM's refining capacity at Port Dickson is 88,000 barrels/calender day which translate to 32.1 mil barrel per year.
HY's production Q1 2022 was 10.6 mil barrels. Average 2017-2021 (5 years) was 36 mil barrels/year
PetronM's Q1 2022 was 7.7 mil barrels. Average 2017-2021 (5 years) 32.3 mil barrels/year.
NO doubt petronM is smaller, but not as small as you mentioned.


Probability posted :
As i had detailed many times you must see HY as a refinery processing 10.7 million barrels per quarter whereas PetronM refinery at less than 1/4 of HY capacity, i.e about 2.5 m barrels. Reason being PetronM is a simple refinery which produces more than 30% Fuel Oil with crack spread hitting negative - 15 USD/brl .

Posted by subwayzzz > 2022-06-01 14:35 | Report Abuse

If we see a regime change in Malaysia which is more inclined to US, I think HY will be pressured to be sold to the west affiliated o&g company.

Posted by Johnzhang > 2022-06-01 14:47 | Report Abuse

To me PetronM being an integrated petroluem player having above 80% of sales in domestic market has its advantage and consistency. It is simpler to understand too.
Apart from refining margin (determined by crack spread), it also enjoy retail/distribution margin .
Dividends are consistent and added up a lot more than HY in the past years, This matters a lot to long term investors.
I have about equal exposure in petron and HY. Intend to shift higher weightage to petron.

Posted by brian3381 > 2022-06-01 14:48 | Report Abuse

huat chaiii

Posted by Eden__lee > 2022-06-01 15:09 | Report Abuse

I'm keep buying petronm this few day and i'm not going to buy any hengyuan share, the reason is-

1) Petronm financial result more consistent compare with hengyuan.
2) Petronm got dividend.
3) hengyuan payable and borrowing total RM4.7b denominated in US Dollar and Usd/Rm strengthen from 4.2 to 4.4. So i predict a very huge foreign exchange loss will affect the profit of hengyuan next QR

Posted by Eden__lee > 2022-06-01 15:09 | Report Abuse

i believe next few month the share price of petronm will perform better than hengyuan.

Posted by sheldon > 2022-06-01 15:09 | Report Abuse

Sslee - I read your proposed questions for the AGM and they're quite pointed. Some of the questions I had asked in the past myself like which petrol stations belonged to Petron & which to the evil twin sister but did not get a clear response. They should rightfully disclose such info in the annual report.
My concern and many in this chat is the 230m derivative losses.

We're aware that there are 2 companies sitting side-by-side. One is 100% owned whilst the other is about 70%++ owned, making the latter something of a step child. When derivative trades are done, it's quite easy I think to park the deals in one company or the other based solely on personal discretion and that is a serious concern.

Posted by brian3381 > 2022-06-01 15:37 | Report Abuse

yes. hy a lot of loan in usd... stregthening of usd is bad to hy

Posted by param1 > 2022-06-01 16:52 | Report Abuse

BESOK RM 7 INI KALI LA

Posted by Sslee > 2022-06-01 17:01 | Report Abuse

@sheldon
I just received the below reply from Petronm IR/Company Secretary

Thank you so much for that Mr Lee for that confirmation of shareholding in PMRMB.

Yes, we did receive the questions you sent on the 30th May and we will address those along with your earlier 4 questions at the AGM in advance of taking questions from the floor.

Look forward to meeting you at the AGM on June 16.

Best regards,

Manoj Devadasan

Posted by Sslee > 2022-06-01 17:04 | Report Abuse

By the way,
I am working in Indonesia. I will need to see whether I can attend the AGM in person as sometime something do happen at last minute that need my immediate attention..

Posted by OTB > 2022-06-01 17:40 | Report Abuse

Posted by Johnzhang > 2 hours ago | Report Abuse

@Probalility,
You mentioned that PetronM is a simple refinery that produces >30% Fuel Oil yield at negative crack spread. For the benefit of all readers, can you clarify what is the Fuel Oil product you refer to ?
------------------------
@Johnzhang,
Please read this link.
https://klse.i3investor.com/web/blog/detail/Insight1/2018-02-03-story146257-DIFFERENCE_between_PETRONM_and_HENGYUAN?_gl=1*1ytqwcz*_ga*MTA3NDE2NTcwNi4xNjA4NTU5NDY5*_ga_MNBHX2J50S*MTY1MzcxMTI4NC4xODguMS4xNjUzNzE4OTE1LjA
I learn it in Petronm forum.
Thank you.

Posted by Sslee > 2022-06-01 18:18 | Report Abuse

You can read Hengyuan annual report page 22 on Hengyuan refinery different fraction yield.
The different is Petronm do not have LRCCU hence most likely Petronm will have 20% Fuel oil/ bunker oil.
You can check what is the price of low sulfur fuel/bunker oil.

Posted by Sslee > 2022-06-01 18:21 | Report Abuse

In indonesia sometime fuel oil is price higher than diesel. Again this is all about demand and supply imbalance.

Posted by Sslee > 2022-06-01 18:59 | Report Abuse

The global average price for very low sulphur fuel oil (VLSFO) has shot up above $1,000 per tonne this week according to data from Ship&Bunker. Moreover, the price differential to high sulphur fuel oil (HSFO) at Singapore, the world’s largest bunkering hub has spiralled to a record $359 per tonne, a gap that was just $80 at the end of April.

Can someone ask during AGM is Petronm able to produce this VLSFO (Very low sulfur fuel oil) 0.5% sulfur max fuel.

Posted by probability > 2022-06-01 19:16 | Report Abuse

I doubt PetronM can make low sulfur Fuel Oil unless they use ultra low sulfur crude (which is at a premium against Brent)...since the sulfur will be enriched at the bottom distillate (higher vaporization point)

Posted by probability > 2022-06-01 19:18 |

Post removed.Why?

Posted by probability > 2022-06-01 19:37 | Report Abuse

See the chart in 2016 annual report:

2) Refinery margin in a quarter (based on its regular throughput per day of 48k although its max daily capacity is 88k). Management also told us in AGM that its refinery currently running at around 60% (I use AR report throughput which is more conservative).
https://klse.i3investor.com/web/blog/detail/david_petronm/127344

Posted by probability > 2022-06-01 19:43 | Report Abuse

When it can only run at 60% throughput and the yield of Fuel Oil is high, the effective profitable throughput becomes even lesser:

88kbpd x 60% = 52.8 kbpd

If 30% fuel oil, it will wipe out (offset) at least another 20% of positive crack from gasoline. This means only 50% of the throughput results in positive crack.

The effective positive throughput then becomes:
= 52.8 kbpd x 0.50
= 26.4 kpbd

per qtr then becomes:
= 26.4 kbpd x 90 days/qtr
= 2.37 million barrels per qtr

I seldom lie

Posted by Sslee > 2022-06-01 20:02 | Report Abuse

Euro 5 diesel has a Sulphur content of 10 ppm.
VLSFO (Very low sulfur fuel oil) 0.5% sulfur max fuel.

Annual report FY 2021
Page 26 & 27:
Diversifying Supply
Our refinery processes various types of crude oil supplementing base Tapis crude and Terengganu condensate for an optimal production run. With the successful operation of our Diesel Hydrotreater (DHT) facility, we were able to further diversify our crude slate, which included other Malaysian crude grades like Kidurong, Kimanis and Kikeh, as well as other regional crudes. This allowed PDR to optimize production using a wider and more diversified type of crude oil feedstock without compromising the quality and the safety of our operations.

The DHT, which was commissioned in the second quarter of 2021, enabled us to diversify our crude slate and process higher sulphur but better value crude oil, improving our feedstock cost and product yield. It allowed us to produce ultra-low sulphur diesel products compliant with Euro 5 specifications, in line with the government’s mandate to replace Euro 2 diesel. The Euro 5 diesel produced from PDR were supplied to Peninsular Malaysia terminals meeting the government’s implementation date.

By the way petronm can afford not to run the refinery if crack spread is low and can just do the retail sales to earned the regulated/gurantee retail margin.

Posted by Sslee > 2022-06-01 20:08 | Report Abuse

Most likely the 2016 condition is now totally different as of today condition after several plant upgrade.

So those physical attending the upcoming AGM, please ask as many questions as you can to understand petronm current conditions.

Posted by Sslee > 2022-06-01 20:22 | Report Abuse

0.5% is 5000 ppm

Posted by probability > 2022-06-01 21:20 | Report Abuse

@sslee, there were technical reasons why the could not go higher than 60%. I can't remember the exact details now. Are they not publishing their throughput on recent annual reports?

(I have not checked on their recent reports)

Posted by Johnzhang > 2022-06-01 21:48 | Report Abuse

@Probability,
Your statements on (a) Petron's refining capacity is less than 1/4 of HY and (b) Petron's produces more than 30% Fuel Oil yield at negative crack spread (hitting -ve USD15/barrel) hard to hold water!
Your statements gave misleading impression that Petron's is less than 1/4 of HY's size and Petron's is much less profitable than HY. All these somehow do not match to the financial data published .
Let me provide recent comparative data for clarity :
Petron's Sales volume and Revenue :
Q1 2022 -7.7 mil barrels, RM3,800 mil
2021 - 26.3 mil barrels, RM9,183 mil
2020 -28.5 mil barrels. RM6,462 mil
(Petron's sales and production in 2020 and 2021 are lower than pre-covid years due to movement control orders)

HY's Sales Vol and Revenue :
Q1 2022 10.6 mil barrels, RM4,952 mil
2021 36.3 mil barrels, RM12,006 mil
2020 35.1 mil barrels, RM7,176 mil
From the above you can see that Petron is 73-81 % of HY's Sales vol and 76-90% in term of HY's revenue !

In term of profitability vis-a vis crack spread :
Petron's NPAT :
Q12022 - RM106.4 mil ,
2021 - RM238.5 mil ,
2020 - (13.3 mil)
HY's NPAT :
Q12022 - RM 47.5 mil,
2021 - RM83 mil ,
2020 - RM251 mil
Avg crack spread :
Q12022 - about USd14 ,
2021 -about USD8.3 ,
2020 -aboutUSD1.70
(Crack spread based on Spore mogas 92 unleaded (Platts) Brent crack Spread)
You can see that Petron outperformed HY in Q12022 and FY2021 when crack spread improved to healthy level. Whereas HY did very well in 2020 when crack spread was extremely low for that year.
In my earlier post, i have also presented the 5 years and 10-years average EPS and Dividends of petron and HY. Petron stand up well.
-------------------------------------------------
Probability wrote :
See the chart in 2016 annual report:

2) Refinery margin in a quarter (based on its regular throughput per day of 48k although its max daily capacity is 88k). Management also told us in AGM that its refinery currently running at around 60% (I use AR report throughput which is more conservative).

Posted by probability > 2022-06-01 21:53 | Report Abuse

@Johnzang, when petronM reports barrels sold, it includes outsourced (70%) refined oil from their parent company to directly sell at their petrol kiosks

Posted by investor2021trading > 2022-06-01 22:20 | Report Abuse

Petronm's traded price at 6.70 (+20c) is testimonial of its gud Q1 March '22 result! Although it has retracted from its day high of 6.85, its closing price is exceptional n should sustained its uptrend tomorrow!

Posted by thumxj > 2022-06-01 22:23 | Report Abuse

Hello, is Petron's Q122 - 230,011,000 loss on derivative a typo? comparing to 25,737,000 in Q12021? The figures do not add up to the PBT nor the cash flow statement figures... Anyone with accounting profession could explain that?

Posted by investor2021trading > 2022-06-02 07:29 | Report Abuse

The Oil Industry’s Downstream Nightmare Is Here To Stay
By Irina Slav - Jun 01, 2022, 6:00 PM CDT

Gulf of Mexico Oil and Gas Industry Faces Active Hurricane Season.
Last week, Bloomberg reported that restarting idled refineries in order to boost fuel production and tame prices by operating refineries at utilization rates of over 90 percent is unsustainable. And come hurricane season, if there is refinery damage, things could get really ugly with the fuel supply situation.

There appears to be no end in sight for the current fuel supply crisis, with summer demand set to spike while refineries run at an unsustainable rate. While refineries have the ability to bring more capacity online, investors are unwilling to get involved in long-term oil and gas projects. U.S. fuel exports have hit record highs and the banning of Russian oil imports by the European Union will only add to demand.

Posted by supersinginvestor > 2022-06-02 08:03 | Report Abuse

Aiyo soo much analysis until not decided to buy petronm yet ah??
U guys better buy...thats all i can say...

Posted by Sslee > 2022-06-02 08:47 | Report Abuse

Minutes of the Board Meeting 12 November 2012 - Minutes_of_the_59th_Annual_General_Meeting_of_Petron_Malaysia_Refining_Marketing_Bhd_June_7_2018__1.pdf

(a) What was the average plant utilization rate for FY2017?
Petron’s response
In 2017, the Company completed its periodic plant maintenance shutdown for 21 days. Despite the shutdown, the Company managed to reach an average plant utilisation rate of about 57% (or 50 kbd) for FY2017
What is the reason for the lower crude refining as compared with our refinery’s capacity?
Petron’s response
It is necessary that we run the refinery at its optimum economic level. Whilst we have the capability to run higher production levels to meet growing domestic needs (especially in the high growth Klang Valley and Penang region), there will be inevitably the residual negative margin products such as Low Sulfur Waxy Residue. Thus the higher level of production without corresponding domestic demand, leads to economics losses, that will not be beneficial to the Company and then will affect profitability

Posted by Sslee > 2022-06-02 08:52 | Report Abuse

Petronm volume and revenue are from sales at their owned retail petrol station to direct consumers and commercial sales of products from PD refinery that is not sold in retail petrol station (jet fuel, fuel oil, waxy residue and etc) to commercial customers

Posted by Sslee > 2022-06-02 08:54 | Report Abuse

Petronm retail sales included fuel products supply from PD refinery and fuel products bought from sister company.

Posted by supersinginvestor > 2022-06-02 09:04 | Report Abuse

Buy all in huat ah

Posted by supersinginvestor > 2022-06-02 09:04 | Report Abuse

Limit up lai lai
Heng ah huat ah ong ah

Posted by stockraider > 2022-06-02 09:05 | Report Abuse

Why Petron profits beat the hell of Hengyuan leh ??
Ans : It is bcos of Russian Crude mah!

The fact is Philippine do not sanction Russian oil mah!

Thus Petron is able to import cheap cheap Gasoline from the Parent in Philippines as the input of russian crude is only USD 80 per barrel compare to the mkt price of USD 115....which is more than 40% cheaper mah!

This cost advantage augurs well with Petron bcos its refinery in msia which do not use russian crude only produce about 50% of its retail reqn mah!

Lu tau boh ?

Posted by Sslee > 2022-06-02 09:11 | Report Abuse

There are also contra sales/purchase of fuel supply from Petronm to petrol station owned by sister company and sister company supply of fuel to petrol station owned by petronm

Posted by investor2021trading > 2022-06-02 09:22 | Report Abuse

NO argument Petronm is smaller than Hengyuan, but don't u agree that Petronm should by now trade at a PE value of 10 times?

Posted by Sslee > 2022-06-02 09:30 | Report Abuse

Is a fact high crack spread will benefit Hengyuan more because of their bigger capacity refinery with Long Residue Catalytic Cracker.

The only problem is whether management managed competantly on their derivatives hedging.