Posted by LowProfile > 2017-03-07 16:02 | Report Abuse

q to buy at 5.5

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

maybe will drop below rm6... be prepared for it...

Posted by suregain > 2017-03-07 18:16 | Report Abuse

Ya.. I wont surprise it wil drop to rm5.60

Posted by zhangliang > 2017-03-07 18:20 | Report Abuse

why la not going up to true value! why??

Posted by Equityengineer > 2017-03-07 21:34 | Report Abuse

Patience , it would go up

Posted by 逍遥子 > 2017-03-07 21:39 | Report Abuse

I waited for one year plus and I don't mind to wait for another year.

In short term, value is unlikely equal to share price, this is the most basic principle for value investing.

Posted by Equityengineer > 2017-03-07 23:10 | Report Abuse

It should not be that way, or else it will be no reason to buy..Right now Petron is undervalued

Posted by Olga > 2017-03-08 04:41 | Report Abuse

Hahaha

Posted by bluelight > 2017-03-08 07:43 | Report Abuse

Cheaper light oil good for petron?
https://www.bloomberg.com/news/articles/2017-03-06/surprise-oil-pricing-cut-gives-clues-to-what-s-irking-the-saudis

Posted by Jay > 2017-03-08 09:46 | Report Abuse

I think petron is currently undervalued because institutional investors are still unsure how to value it (refining+retail). plus there was a period of earnings volatility. but from a cashflow perspective, things will be clearer, it's a strong free cashflow machine.

now is time to be patient, wait till next quarter another good results then maybe finally market will re-rate it upwards.

Posted by Jay > 2017-03-08 09:51 | Report Abuse

not sure whether the cheaper light oil directly benefits petron. but based on that article, it seems like asia buyers should benefit from that. if that's true, then the stars seem to be aligning for petron for this year

Posted by zoizai > 2017-03-08 09:57 | Report Abuse

Something wrong. Petdag up but Petronm down.

Posted by 逍遥子 > 2017-03-08 10:27 | Report Abuse

Ha ha ha.... something wrong mah sell loh !!!

Posted by zoizai > 2017-03-08 10:48 | Report Abuse

Just keep. Bought it many years ago.

Posted by 逍遥子 > 2017-03-08 11:55 | Report Abuse

Just take a rough estimation :

Actual FY2015

cash flow (1/1/2015) : $354.67 millions
Net cash from Operation : $360.86 millions
Repayment of Debts : $445 millions
Capex/Investment : $111.13 millions
Cash Flow (31/12/2015) : $159.27 millions

If you just take FY 2015 cash flow alone :

$360.86 mils - $445 mils - $111.13 mils = -$195.27 mils (negative cash flow)

However the management still declared $0.20 ($54 mils) dividend, which means that they are confident with FY2016 cash flow (although dividend payment is at June 2016).

-------------------------------------------------

Actual FY2016

cash flow (1/1/2016) : $159.27 millions
Net cash from Operation : $349.97 millions
Repayment of Debts : $236.42 millions
Dividend payments : $54 millions
Capex/Investment : $47.33 millions
Cash Flow (31/12/2016) : $171.64 millions

If you just take FY 2016 cash flow alone :

$349.97 mils - $236.42 mils - $54 mils - $47.33 mils = 12.22mils (Positive cash flow)

The management is willing to declare $0.22 ($59.4 mils) dividend means that they are positive with FY 2017 cash flow.

Let say we took out dividend payment out from the equation, i.e. ($349.97 mil - $236.43 mils - $47.33 mils = $66.22 mils) the true cash flow FY2016 generated after taking out all other cash flow items, out of the $66.22 mils the management is ready to declare $59.4 mils as dividend. Payout ratio 89.7%

-------------------------------------------------

Estimate FY2017

cash flow (1/1/2017) : $171.64 millions
Net cash from Operation : $350 millions
Repayment of Debts : $150 millions (around 50% of total debts)
Dividend payments : $59.4 millions
Capex/Investment : $100 millions
Cash Flow (31/12/2017) : 212.24 $millions

If you just take FY 2017 cash flow alone :

$350 mils - $150 mils - $59.4 mils - $100 mils = 40.6 mils (Positive cash flow)

Let say we took out dividend payment out from the equation, i.e. ($350 mil - $150 mils - $100 mils = $100 mils) the true estimate cash flow FY2017 generated after taking out all other cash flow items, out of the $100 mils the management can easily declare $0.30 dividend ($81 mils).

The estimate net cash from operation would be higher than $350 millions if the oil price can stay at USD 50+ for FY2017, average oil price for FY2016 is USD44.

Posted by LowProfile > 2017-03-08 15:57 | Report Abuse

very objective analysis you got there... well done!

Posted by Jay > 2017-03-08 16:23 | Report Abuse

it's hard to estimate cashflow because it hinges on so many items including working capital. but it does seem like petron can get RM250-300m in free cashflow (operating - investing before debt repayment) every year. that's more than 15% of their current market cap. moreover, that could increase if profits increase and their reinvestment needs reduce.

dividends they have the capability to pay and I do believe they can increase yoy but they might not want to increase too much in a year to manage shareholders' expectations. again I think short term just ride on the bumper earnings, longer term ride on its strong cashflow

Posted by zoizai > 2017-03-08 16:29 | Report Abuse

Price drop every day

Posted by Alex Lim Jun Xiong > 2017-03-08 16:36 | Report Abuse

Shell drop 2%+, petron is stable~

Posted by Cindy Ling > 2017-03-08 17:37 | Report Abuse

Price drop everyday, but when buy in trend is come will up kao kao

Posted by Equityengineer > 2017-03-08 18:13 | Report Abuse

No worries ,this counter trend is like that, if buying is happening then it will go up very fast. So little floating shares ...

Posted by sumato88 > 2017-03-08 23:53 | Report Abuse

Yes, I am.


Goodstock sumato88 , are you still with us ??
08/03/2017 09:36

Posted by suregain > 2017-03-09 06:29 | Report Abuse

Oil px down 5%! Hopefuly petron can stay above rm6

Posted by Jay > 2017-03-09 08:45 | Report Abuse

the spread actually expanded overnight. crude oil (input) fell by 5% but gasoline (output) only fell 1.6%

Posted by 逍遥子 > 2017-03-09 09:00 | Report Abuse

@ Jay, where to find updated crack spread ? Thanks

Posted by Equityengineer > 2017-03-09 09:05 | Report Abuse

Buy

Posted by zoizai > 2017-03-09 09:07 | Report Abuse

Buy

Posted by suregain > 2017-03-09 09:08 | Report Abuse

q at 5.6

Posted by Equityengineer > 2017-03-09 09:10 | Report Abuse

5,6 also ok ... at least you buy ...

Posted by LowProfile > 2017-03-09 09:20 | Report Abuse

better sell now before it is too late!

Posted by suregain > 2017-03-09 09:26 | Report Abuse

petron suda masuk rumah hantu : top loser list

Posted by Jay > 2017-03-09 09:41 | Report Abuse

@逍遥子 I rely on my friend to get it from Bloomberg

Posted by Jay > 2017-03-09 09:44 | Report Abuse

the expansion makes sense since gasoline future dropped less than crude oil futures. futures price you can get from CME website

Posted by Jay > 2017-03-09 09:52 | Report Abuse

this counter seems to have a very strong operator based on the price movement before last results. surge up within days then press down like crazy just before the results before going limit up. just let them flush enough first before the next climb

Posted by Equityengineer > 2017-03-09 09:56 | Report Abuse

That press down is purposely for them to collect more .. today is actually due to oil price sentiment. as long as above 50usd should be fine. That is the aim of OPEC at least for another 3 months. What is the point of agreement if can't reach the desired output.

Posted by Equityengineer > 2017-03-09 09:56 | Report Abuse

After the dividend approve would be the next upleg I assume

Posted by 逍遥子 > 2017-03-09 10:16 | Report Abuse

Thanks Jay !

Posted by Jay > 2017-03-09 10:23 | Report Abuse

no problem. to be fair, crack spread did weaken in Mar before slowly recovering these few days. but ytd, the average is still higher than 4Q16 and 3Q16

Posted by suregain > 2017-03-09 10:25 | Report Abuse

oil price down is the culprit.. usa energy shares tumble

Posted by LowProfile > 2017-03-09 10:25 | Report Abuse

@jay same goes to crude oil brent as well

Posted by 逍遥子 > 2017-03-09 10:48 | Report Abuse

in fact crack spread future is going up.

http://www.cmegroup.com/trading/energy/refined-products/rbob-crack-spread-swap-futures.html

Posted by Jay > 2017-03-09 10:50 | Report Abuse

http://www.reuters.com/article/us-usa-oil-eia-idUSKBN16F1XL

Posted by Equityengineer > 2017-03-09 11:04 | Report Abuse

But that is future price for option expiry ...

Posted by Equityengineer > 2017-03-09 11:11 | Report Abuse

When crude prices increase, the market may or may not allow product prices to move up as quickly as crude prices – “squeezing” the margin.
When crude prices fall, there can be a lag in product price deceases – causing margins to increase.

Posted by LowProfile > 2017-03-09 12:09 | Report Abuse

sell arrrrrrrrrr

Posted by suregain > 2017-03-09 12:23 | Report Abuse

hopefully stay above rm6 as a strong support...

Posted by wltan22 > 2017-03-09 12:24 | Report Abuse

If you aren't willing to own a stock for 5 years, don't even think about owning it for 5 minutes, 50% discounted from Warren Buffett quote.

Posted by Davidl > 2017-03-09 12:25 | Report Abuse

I hope it could drop to 5.00 so that I could buy more!

Posted by paperplane2016 > 2017-03-09 12:55 | Report Abuse

buy little 5.99

Posted by Equityengineer > 2017-03-09 13:08 | Report Abuse

I have added more today , I am still bullish till next Q..