Posted by stockraider > 2022-09-11 16:22 | Report Abuse

Correct mah!
Monday quickly go & check out what & how the Private Refining Margin Swap is structure mah!

No point....complain & buat hal....buat apa leh ?!

Must tackle this pressing point mah!

U investigate for yourself mah!

Posted by stockraider > 16 minutes ago | Report Abuse

U should not attack Raider mah!
Go & investigate the Private Refining Margin Swap Contract Dulu mah!
Go & find out more 1st loh!

Posted by Sslee > 2022-09-11 16:31 | Report Abuse

PSAi3alert,

Hengyuan realised derivatives loss for Q2 RM 438,758,000 and culmulative 6 months RM 870,964,000 all flow thro the P&L and yet HRC acheived H1 PAT of RM 714,941,000 and Operating profit before changes in working capital RM 939,171,000.

Q2 other operating gains/(losses)RM 91,863,000 culmulative 6 month (RM 246,699,000)

You can now work out how much of Q2 and culmulative 6 months realised derivatives losses are included in purchases.

Posted by ValueInvestor888 > 2022-09-11 16:38 | Report Abuse

@ Probability
Why fuel oil crack spread is (negative) 25 USD?
What is your estimated ave crack spread for petronm?





*************
EU refinery are 90% simple type, asians like HY are mainly complex type

for simplicity they product yields are as per below:

keyword note - this output ratio cannot be altered

Simple refinery:
...............

40% Gasoline (crack spread : 7 USD/brl)
20% Diesel (crack spread: 50 USD/brl
10% Jet Fuel and other (crack spread at: 20 USD/brl)
30% Fuel Oil ( crack spread : - 25 USD.brl)

avg margin: 7.3 USD/brl

Complex refinery:
.................

30% Gasoline (crack spread : 7 USD/brl)
50% Diesel (crack spread: 50 USD/brl
18% Jet Fuel and other (crack spread at: 20 USD/brl)
2% Fuel Oil ( crack spread : - 25 USD.brl)

avg margin: 30 USD/brl

Posted by probability > 2022-09-11 16:43 | Report Abuse

@valueinvestor888, PetronM shall not be classified into the above simple refinery as it is using Malaysian very light and sweet crude oil

yield of products as per below

https://corporate.exxonmobil.com/-/media/Global/Files/crude-oils/Tapis/Crude_Oil_Tapis_assay_pdf_new.pdf

Posted by probability > 2022-09-11 16:44 | Report Abuse

@valueinvestor888, purely FYI on fuel oil crack spread:

www.tradingview.com/symbols/NYMEX-SF31!/

Posted by ValueInvestor888 > 2022-09-11 16:46 | Report Abuse

Thank you probability. But it does not make sense to be negative USD 30?

Posted by ValueInvestor888 > 2022-09-11 16:48 | Report Abuse

Any reason it is negative USD 30?

Posted by probability > 2022-09-11 16:48 | Report Abuse

its because nobody wants the fuel oil but its inevitably produced by these refineries..like a byproduct

thats why they need to have signficant positive crack on other products to have overall positive margin

Posted by stockraider > 2022-09-12 08:17 | Report Abuse

Correctloh!

"one more thing.............u don't know what prices those contracts and whether long or short were struck, the weightage and volumes for each month also not known. .........how can u calculate here and there....they say rubbish in rubbish out applies here."!

QQQ talk alot of sense below loh:

Posted by qqq3333 > 11 hours ago | Report Abuse

So my layman question.
If you hedge the refining margin at USD 12 - 20 per barrel from month july onward till maybe beyond 2022 up to 2023.

And current crack spread is only from usd 2 to 5 leh then how much money your refining magin swap contracts maturity on Sept will earned?
_≠==============

Sslee.....that is a silly question...u can as easily and as correctly stated your question as how much money u would have lost...

....no kidding....don't use the word hedging without any understanding what happened

one more thing.............u don't know what prices those contracts and whether long or short were struck, the weightage and volumes for each month also not known. .........how can u calculate here and there....they say rubbish in rubbish out applies here.

Posted by stockraider > 2022-09-12 11:54 | Report Abuse

Simple mah!

If U take all derivative valuation mark to mkt in June & flow thru P&L....base on the same high standard as Petron...then Hengyuan will make Q2 losses of Rm 412m or EPS loss of Rm 1.37 per share & Half year losses of Rm 475m or EPS loss of Rm 1.58 per share mah!

No need to bluff mah!

It is all back up by facts & figure mah!

Posted by stockraider > 2022-09-12 12:41 | Report Abuse

Value destruction happening in hengyuan summarise below

31-12-2020.....Nta per share Rm 7.22
31-3-2021.................................. Rm Rm 7.14
30-6-2021................................ Rm 6.75
30-9-2021............................ Rm 6.07
31-12-2021......................... Rm 6.83
31-3-2022..........................Rm 6.62
30-6-2022......................... Rm 5.25

Actually 30-6-2022 is the highest value of wealth destruction in Hengyuan despite reporting record operating qtrly profit eps of Rm 2.22 loh!

Why leh ??
Something is not right mah!

Posted by stockraider > 2022-09-12 13:13 | Report Abuse

Very important Question if u can answer then u will solve the mystery loh!
Btw...it is not an exchange....it is an individual counter party....having a private deal with Hengyuan mah!

Who is the sooohaaiiii counter party dare to bet one to one... with a refinery like HRC, on Refining margin on one to one bet leh ??

What is there for them, what is counter party their competitive edge over hengyuan leh ?

The huge sum of money, that Hengyuan is betting...to tune of Rm 1.3 billion losses, is just ridiculous mah!

Posted by stockraider > 2022-09-12 17:36 | Report Abuse

Why today Petron goes up but hengyuan do not leh ??

1. Petron with its refinery & petrol stations has better value than hengyuan loh! Just Petron Petrol station alone already worth Rm 6.50 per share & its refinery worth Rm 4.50 mah!.
2. Petron had paid higher & consistent dividend than hengyuan at 20 sen per share mah!.
3. Petron Qtr2 31-6-2022 result still reported a commendable net profit of 68 sen per share despite netting of hedging losses whrereas HRC reported a loss of eps Rm 1.37 per share after netting off hedging losses loh!
4. Petron are more well manage & less complicated compare to hengyuan, thus easy to understand & investor is more confident on Petron loh!
5. On hedging Petron adopt a more acceptable universal standard of forward exchange contract & commodity swaps route thru the banks base on over the counter arrangement (OTC} whereas Hengyuan has also Forward exchange contract & commodity swap route thru OTC with banks but it has this dubious Refinery Profit Margin swap done as private arrangement individual counter party loh! This Refinery Profit Margin Swap has generated a staggering more than Rm 1 billion losses at hengyuan loh!

Posted by i3lurker > 2022-09-12 18:45 | Report Abuse

Raider
if plot your graph the NTA of HengYuan will become Zero very soon !!!

sslee will become from Hero to Zero
dun scare sslee otherwise he will need yeast for it to rise

Posted by Sslee > 2022-09-12 19:23 | Report Abuse

No worries,
CapitalA at negative NTA also plan to list in Amerika.

So HRC virtual refinery shold be able to list in ‘metaverse’ and appoint stockraider as CFO.

Stockraider as CFO will sure to make billion for HRC in bitcoin with his virtual hedge.

Posted by i3lurker > 2022-09-12 19:28 | Report Abuse

Yup
a Virtual kukujiao will only need a virtual yeast to make it rise

Posted by Philip ( buy what you understand) > 2022-09-12 19:31 | Report Abuse

But Lee he has a point. Why is hengyuan nta dropping? Is it fake numbers?

Posted by Sslee > 2022-09-12 20:30 | Report Abuse

Philip,
HRC Q2 result:
Other comprehensive (expense)/income:
Items that will be reclassified to profit or loss:

Cash flow hedge – net fair value (loss)/gain on derivatives used
for hedging (net of tax) (244,699)
Cost of hedging reserve (net of tax) (834,901)

The above unrealised derivatives gain/loss although did not pass thro' the P&L as it was kept as other comprehensive income:
Items that will be reclassified to profit or loss:

But in Balance sheet the unrealised drivatives gain/loss was captured as derivatives assets and derivatives liabilities thus reflected into NTA.

Note: Even though 2020 HRC derivatives gain is RM 1,124,316,000.
But in 2020 PAT only RM 250,983,000

Come back to 2022:
Hengyuan realised derivatives loss for Q2 RM 438,758,000 and culmulative 6 months RM 870,964,000 all flow thro the P&L and yet HRC acheived H1 PAT of RM 714,941,000 and Operating profit before changes in working capital RM 939,171,000.

What ever unrealised derivatives loss/gain when on maturity will be reclasified into P&L.

ANY DERIVATIVES (REFINING MARGIN SWAP CONTRACTS) LOSS/GAIN WILL BE OFFSET BY PHYSICAL BUYING CRUDE AND SELLING REFINES PRODUCTS BETTER/POORER MARGIN ACHEIVED FOR THE PERIOD.

Posted by i3lurker > 2022-09-12 21:09 | Report Abuse

everyone is now looking at massive land gains by Ukraine Army over last few days
US experts are now saying that majority of Russian Army will be culled by late 2022 to early 2023.

This will expose Russia to invasion by China as the common border areas have been thinned substantially to rearrange troops.
Pow wow between Putin and Xi Jinping in Uzbekistan next few days
Talks between Russia and China will determine the future of Ukraine.

Posted by AzlanIshtiqal > 2022-09-13 10:30 | Report Abuse

Masih percaya permintaan O&G akan bertambah semasa memasuki musim sejuk tahun ni

Posted by stockraider > 2022-09-13 12:28 | Report Abuse

Very important Question if u can answer then u will solve the mystery loh!
Btw...it is not an exchange....it is an individual counter party....having a private deal with Hengyuan mah!

Who is the sooohaaiiii counter party dare to bet one to one... with a refinery like HRC, on Refining margin swap on one to one bet leh ??

What is there for them, what is counter party their competitive edge over hengyuan leh ?

The huge sum of money, that Hengyuan is betting...to tune of Rm 1.3 billion losses, is just ridiculous mah!

WHY GENERAL RAIDER ASK THIS VERY IMPORTANT QUESTION LEH ?
"Who is the sooohaaiiii counter party dare to bet one to one massively of more than billions... with a refinery like HRC, on Refining margin swap on one to one bet leh" ?

AS U ALL KNOW, THERE ARE REALLY NO COMMODITIES MKT for 'REFINERY MARGIN SWAP' TRADED....IF U WANT TO BET...U NEED TO FIND A COUNTER PARTY LOH!

THATS LEAD TO RAIDER VIRTUAL REFINERY EXPLAINATIONS EARLIER LOH! SUPPOSE BASE ON SSLEE PAPER CALCULATION, U CAN ACTUALLY MAKE USD 35 PER BARREL MARGIN ON PETROL & DIESEL WHEN U HEDGE FWD LOH! BUT AS RAIDER EXPLAIN THIS PAPER SUCCESS , NEED TO FACE THE CHALLENGE OF MKT VOLATILITY & ACTUAL EXECUTION LOH...THUS TRANSLATE TO A PROBABILITY SUCCESS RATE OF SAY 75% LOH!
THIS SHOULD BE POSITIVE FOR HENGYUAN IF THEY GO BUY CRUDE BRENT & SELL DIESEL & PETROL future IN ORDER TO HEDGE AND LOCK IN A POTENTIAL PROFIT DUE TO THE HIGHER PROBABLE SUCCESS LOH!

BUT INSTEAD OF HENGYUAN DOING THAT....THEY LOOK FOR A FRIENDLY VIRTUAL REFINERY..TO BE THE COUNTER PARTY OFFERING THEM A "REFINERY MARGIN SWAP" WITH USD 10 MARGIN.....AND THE VIRTUAL REFINERY WILL DO THE HEDGE WITH A GROSS PAPER PROFIT MARGIN OF USD 35....N THEY OFFER HENGYUAN REFINERY MARGIN OF USD 10....THUS THE VIRTUAL REFINERY APPEAR SAFELY HEDGE AT USD 25 LOH!

THUS HENGYUAN WILL BEAR THE BRUNT OF VOLATILITY & EXECUTION risk WITH INADEQUATE MARGIN OF SAFETY OF USD 10 LOH! THAT COULD BE THE EXPLAINATION, WHY HENGYUAN MAKE LOSSES OF MORE THAN RM 1 BILLION ON A REFINING MARGIN SWAP LOH!

THE ABOVE SUSPICIOUS ARRANGEMENT IS "BUSINESS LIKE & IT APPEAR LEGAL" BUT IT WILL BE THE DETRIMENTAL TO HENGYUAN SHAREHOLDERS IN THE LONG RUN LOH!

"A quick check on Petron....there is no Refining Margin swap hedge done loh"!

Posted by Sslee > 2022-09-13 14:18 | Report Abuse

In 2020 HRC made derivatives gain of RM 1,124,316,000 and PAT of RM 250,983,000

Petrtonm Q2 2022.
Derivatives realised loss: RM 207,862,000 cumulative 6 months RM 437,873,000.
Unrealised loss: RM 166,799,000

Outstanding commodity swaps: contract nominal value: RM 223,845,000.

Perhaps our very panlai stockraider can explain why with only commodity swaps nominal value of RM 223,845,000 can result in unrealised derivatives loss of RM 166,799,000 (75%)?

Posted by AzlanIshtiqal > 2022-09-15 10:16 | Report Abuse

US inventori minyak dikurangkan kepada 2.4M barrels berbanding dengan 8.8M barrels minggu lepas

https://www.thestar.com.my/news/world/2022/09/15/oil-prices-rise-amid-us-inventory-data

Posted by Jerichomy > 2022-09-15 23:40 |

Post removed.Why?

Posted by Fundamental Trader > 2022-09-19 09:03 | Report Abuse

PE trap can be avoided by checking P/FCF, if negative, avoid.

Posted by Sslee > 2022-09-19 09:15 | Report Abuse

When government late in paying you the fuel subsidy money for your sell of fuel to customers and when your working capital/inventories almost double due to fuel price almost double compare to previous year.

So is operating profit before changes in working capital: RM 637,742,000 for 6 months end 30 June 2022 a bad result?

Posted by AzlanIshtiqal > 2022-09-19 10:03 | Report Abuse

Pasaran O&G akan meningkatkan semasa menjelang ke musim sejuk

Posted by Jerichomy > 2022-09-19 11:26 |

Post removed.Why?

Posted by Sslee > 2022-09-19 12:17 | Report Abuse

Why need to copy and paste other people comment. Are you so inferior and incapable of giving your own opinion?

Posted by speakup > 2022-09-19 12:24 | Report Abuse

everything down
market crash

Posted by Sslee > 2022-09-19 12:30 | Report Abuse

When everything down then it is time to pick up some share that give you good dividend.

Posted by BobAxelrod > 2022-09-19 12:38 |

Post removed.Why?

Posted by Sslee > 2022-09-19 13:05 | Report Abuse

The H1 2022 PAT already excess last year PAT. H2 will be another very profitable half year. Last year dividend is 20 cents this year I expect the dividend will be higher.

So why not, I am been paid while waiting for Petronm's strong earning to move the stock price up.

Posted by hng33 > 2022-09-19 15:13 | Report Abuse

No hurry, still have 2 month time grace period to re enter back.

Confirmation petronM upcominv Q3 result can ascertain ahead via its holding company, petron corp which tend to announce beforehand.

Posted by hng33 > 2022-09-19 15:20 | Report Abuse

Preserve cash while awaiting right timing to re enter.

Time also needed to monitor sustainability crack spread for both gasoil and kerosene in next 2 month.

Posted by Mikecyc > 2022-09-20 07:41 |

Post removed.Why?

Posted by Mikecyc > 2022-09-20 07:52 |

Post removed.Why?

Posted by Mikecyc > 2022-09-20 07:58 |

Post removed.Why?

Posted by Mikecyc > 2022-09-20 09:50 |

Post removed.Why?

Posted by The St. Goreng > 2022-09-21 10:37 | Report Abuse

Drop without buying support...

Posted by skyjet > 2022-09-21 12:16 |

Post removed.Why?

Posted by stockraider > 2022-09-22 11:54 | Report Abuse

Buyloh....result should be good mah!

Posted by hondacity > 2022-09-22 13:27 | Report Abuse

https://www.reuters.com/article/china-oil-imports-idAFL4N30R20F

Posted by Mikecyc > 2022-09-23 06:42 |

Post removed.Why?

Posted by AzlanIshtiqal > 2022-09-23 09:07 | Report Abuse

Permintaan O&G akan naik menjelang musim sejuk. US minyak inventori juga turun berbanding dengan minggu lepas.

https://www.thestar.com.my/business/business-news/2022/09/22/oil-rises-as-supply-fears-outweigh-recession-worries

Posted by hng33 > 2022-09-23 11:06 | Report Abuse

Based on current gasoline crack spread of just USD 3-5 range, RON95 actually should lower instead of increase.

Only dissel and jet fuel are at elevated level. Gov can increase dissel retail selling price in accord to international crack, but, not gasoline which is now at historical lowest range

Posted by hng33 > 2022-09-23 11:07 | Report Abuse

In winter time, gasoline is at decreasing demand, but, dissel is higher due to need to replace gas

Posted by NatsukoMishima > 2022-09-24 08:33 | Report Abuse

WTI on track for its lowest close since Jan. 10 and Brent on track for its lowest close since Jan. 13.

2.xx coming!

Waterfalling crash in oil price coming next week , run right now !

Posted by bsinvestor > 2022-09-24 09:17 | Report Abuse

coming monday sure lao sai already

Posted by Sslee > 2022-09-24 09:31 | Report Abuse

LOW SULPHUR GASOIL CRACK SPREAD (1000MT) FINANCIAL FUTURES (CONTINUOUS: CURRENT CONTRACT IN FRONT)NYMEX
45.971
D
USD
−0.399
(−0.86%)

With cheaper crude oil price but diesel crack spread at USD 45.97 per barrel is that bad news for Petronm?