Posted by Equityengineer > 2017-03-16 11:05 | Report Abuse

Cheers

Posted by damiantreez > 2017-03-16 12:27 | Report Abuse

oil rally

Posted by pitbull > 2017-03-16 14:00 | Report Abuse

逍遥子
If crude oil prices maintain on $40 to $45
Will impact petronm profit ...?

Posted by 逍遥子 > 2017-03-16 14:44 | Report Abuse

@ Pitbull, sure there will be impact but to what extent I m not too sure. If u refer back to 2016 2Q, I think the average oil price is around $46/47 Petronm still make reasonable profit. However this is also because of improved refinery margin as compared to 2016 1Q

Posted by leechen88 > 2017-03-16 14:47 | Report Abuse

noy yet sailang but start with 20% of my portfolio ....will add more when drop

Posted by probability > 2017-03-16 15:01 | Report Abuse

from sumato88 posting and findings that Petron M is operating at 50% of its refinery capacity and its 'topping up' by sourcing refined products, i have led to the following opinions:

i) the reason why the figures of Sales volume in terms of barrel is nicely matching its rated capacity is because they 'top up' with externally sourced refined products quantity is limited by the plant set up , e.g the pumping capacity and storage tank facility which was originally catered for the full refining capacity.

ii) since they procuring the remaining refined oil at MOPS pricing - they stand no risk at all on stock loss -as their margin is actually the difference of the 1 month moving average of 'MOPS + government determined fixed margin (32 & 23 cents for petrol and diesel respectively) ' versus COGS / feed material at 2 weeks moving average price of MOPS.

iii) Wondering the reason they source externally is because they are getting high quality refined oil produced from Petron Inc (philippines) new 180,000 bpd plant with the latest efficient technology.

This means Petron have significant advantage compared to its competitors. But need to really verify my suspicions above.
Would appreciate to have others thoughts...

Posted by Lee Yih Yeong > 2017-03-16 15:04 | Report Abuse

petronm = 0.22x15+ 5 = RM8.30 . this price is going to meet?

Posted by probability > 2017-03-16 15:12 | Report Abuse

they must be procuring at below MOPS values in 1 month batches just the same way the automated finished products pricing works at the Gas stations.

Now...if they can increase the pumping capacity and storage tank that can easily increase their volume...wondering why they were seeking for bidders for supply of refined oil?

Posted by Jay > 2017-03-16 15:23 | Report Abuse

I suspect the capacity is not all for popular products like petrol and LPG. so it won't make sense if they ramp up the utilisation rate and produce other refining products which have lower demand

Posted by Jay > 2017-03-16 15:25 | Report Abuse

all these discussions are really helping us to understand this company more and more. thanks to everyone who contributed

Posted by probability > 2017-03-16 17:26 | Report Abuse

Thoughts again...

These plants are built to operate at the rated capacity. When a plant operates at reduced throughput, the efficiency actually drops.

Even if they are producing 'low value added products - LVAP' via the refining, it does not make sense to operate at a reduced throughput.
As long as there are consumer for these LVAP its always more economic to operate at full capacity.

There is only one plausible reason for them to operate at reduced capacity: To allow another value addition process - HVAP which competes with its resources to run at higher capacity, meaning they are occupying their tank spaces and pumps for these externally sourced refined products and its constraining them from running at full capacity.

I think if the HVAP demand increases, they can just increase throughput via the non-refining facilities, and if the new facilities can handle the full demand of the HVAP stream, then they can start operating the refinery in full swing again.

They can then also shutdown the refinery and fully use the facilities for the HVAP stream if the demand volume justifies.


Posted by Jay > Mar 16, 2017 03:23 PM | Report Abuse

I suspect the capacity is not all for popular products like petrol and LPG. so it won't make sense if they ramp up the utilisation rate and produce other refining products which have lower demand

Posted by Jay > 2017-03-17 07:45 | Report Abuse

a bit technical, can I clarify some things?

1. the refinery plant by design should have taken into account all those tank spaces and pumps right?
2. seems like the sales every quarter much exceeded what they produce, isn't the demand already there?
3. what do you mean by HVAP? is that further refining of refined products?
4. what do you mean if HVAP demand volume justifies, they can shutdown the refinery?

Posted by probability > 2017-03-17 10:49 | Report Abuse

sorry jay, really not good at explaining things....will try again:

1. the refinery plant by design should have taken into account all those tank spaces and pumps right?
yes.
2. seems like the sales every quarter much exceeded what they produce, isn't the demand already there?
yes.
3. what do you mean by HVAP? is that further refining of refined products?
just a short form i created for Higher Value Added Product (stream).
4. what do you mean if HVAP demand volume justifies, they can shutdown the refinery?
Ok..will clarify again as per below:


For simplicity View the refinery as a pipeline (stream 1: Crude Oil) running from its Feed Tanks 1A & 1B via Pump 1A & 1B to process vessel 1 and then to Refined Product Tanks 2A, 2B, and byproduct tanks 2C, 2D etc via Pump 21, 2B, 2C and 2D respectively. This is how the refinery were made for a flowrate through the system at 88k bpd.

The Process vessel 1 is the heart of the refinery and what defines the refining capacity, and any reduction on throughput on this Process vessel 1 basically means higher utilities and overhead cost per barrel processed (Feed stream 1 and all the products and by product it produces).


Now, if they are not operating at full capacity now, it means some other stream 2 is constraining its facilities. Facilities means either the Feed or Product storage tank or their existing pumps in the refinery complex as mentioned above.


If they are compromising stream 1 throughput for stream 2 - that means stream 2 is much higher value added product (HVAP) than stream 1 (LVAP).

Meaning the value addition they obtain on stream 2 per barrel is higher than stream 1 though they did not run through the process vessel 1 (which gives the definition of refining).

Stream 2 does not run through the process vessel 1. That is the reason they report the refining capacity low though when you add up stream 1 & 2 its comes approximately 88 k bpd.

If the demand for stream 2 increases, the may even start to use both Feed Tank 1A & 1B causing the refinery to shutdown - as it justifies economically.

Alternatively, they can just built these facilities (new for stream 2) so that it does no compete with stream 1 and allow the refinery to operate at full capacity.

The above is how i view whats going on currently...from the available facts.

Posted by Jay > 2017-03-17 11:55 | Report Abuse

oh I see. but I think petron purchase to plug the gap between production and sales. so is the stream 2 to process these? or they could have secured supply of ready fuel to resale without need to further process?

Posted by probability > 2017-03-17 12:09 | Report Abuse

Posted by Jay > Mar 17, 2017 11:55 AM | Report Abuse

oh I see. but I think petron purchase to plug the gap between production and sales.

A: I think this stream 2 is all going to their Retail sections.
The growth on stream 2 seems proportional to the growth in their gas stations. This is where their margins are fat, secure and stable - unlike volatile refinery margin.

Stream 1 is being operated as they still have room to operate it as the stream 2 demand has not catched to a level of 88k bpd. Its like their gas stations only need about 44k bpd currently...so why shutdown the refinery?


so is the stream 2 to process these?
A: very likely as per my opinion above.

or they could have secured supply of ready fuel to resale without need to further process?
A: This is what i think so - i think they have more margins to make by sourcing (perhaps from Petron Inc) then producing from their old refinery made in 1970s(is it 1963?).

Posted by probability > 2017-03-17 12:14 | Report Abuse

Stream 2 quality and price could be way more superior and competitive than what is produced by stream 1. Stream is probably sold to external local consumers.

Posted by 逍遥子 > 2017-03-17 12:14 | Report Abuse

Technical side, I m not too familiar, is it possible they intent to allocate more of their refinery facilities to produce HVAP i.e. Ron 100 & Euro 5M Disel which have better sales margin ?

Posted by probability > 2017-03-17 13:06 | Report Abuse

This is the way i see too - due to sulfur content.


http://www.galpenergia.com/EN/agalpenergia/Os-nossos-negocios/Refinacao-Distribuicao/ARL/Refinacao/Paginas/Didatico-Refinacao.aspx

Extract from above:

Refineries configured to have a large conversion and desulfuration capacity can achieve higher returns in higher-value refined products, since they process heavier and sourer crude than refineries with lower conversion and desulfuration capacity.


Posted by 逍遥子 > Mar 17, 2017 12:14 PM | Report Abuse

Technical side, I m not too familiar, is it possible they intent to allocate more of their refinery facilities to produce HVAP i.e. Ron 100 & Euro 5M Disel which have better sales margin ?

Posted by 逍遥子 > 2017-03-17 13:15 | Report Abuse

@ probability Cheers

Posted by Cindy Ling > 2017-03-17 17:28 | Report Abuse

Saudi Arabia said maybe prolong oil output cutting schedule... good to petronm... =)

Posted by ysh8793ysh > 2017-03-17 17:53 | Report Abuse

http://www.marketwatch.com/story/its-time-to-be-bullish-about-oil-prices-and-oil-stocks-2017-03-17

Posted by suregain > 2017-03-17 22:42 | Report Abuse

Time to buy

Posted by probability > 2017-03-18 13:29 | Report Abuse

Just went through all the annual reports 2010 -2011. The refinery had been modified to run at a lower throughput efficiently to handle low sulfur crude oil. So, this 45k bpd is the throughput we can expect.

The sales volume of the barrels are inclusive of the outsourced refined products to feed the retail sections.

From the revenue reported and the barrels sold, it can only be true if ~ 50% of the throughput in barrels are sold as finished products - 60% Petrol and 40% Diesel fractions at retails pricing and the remaining 50% at MOPS pricing…

appreciate others verification..

Posted by probability > 2017-03-18 13:35 | Report Abuse

http://www.isaham.my/stock/petronm

nice cash yield and EV/EBITDA

Posted by probability > 2017-03-18 22:31 | Report Abuse

http://www.petron.com.my/web/Media/uploads/Press_Release_-_Petron_Posts_Strong_4th_Quarter_to_Fuel_Higher_Earnings_in_2016.pdf

http://www.petrolworld.com/headlines/item/26558-malaysia-petron-malaysia-signs-sarawak-market-deal

Posted by 逍遥子 > 2017-03-19 01:34 | Report Abuse

This getting very interesting.

https://twincitytelegraph.com/petron-malaysia-refining-marketing-bhd-klsepetronm-valuation-at-a-glance/

Posted by probability > 2017-03-19 02:44 | Report Abuse

http://klse.i3investor.com/blogs/sumato88/118086.jsp

hi sumato88, kindly clarify how you had obtained the Segmental Ebitda of 305 for marketing and 145 for refinery for Petron as shown on your figures.

Posted by stockraider > 2017-03-19 10:44 | Report Abuse

Petron is equal to refinery plus petrol station.....!!

In terms of Refinery Petron is trading at a premium compare to shell.

In terms of Petrol stations it is trading at a big discount to Pet Dag.

In terms of profit 65% come from Refinery and 40% come from station loh.....!!

Overall good investment Petron lousy investment Pet Dag...!!

Posted by cheoky > 2017-03-19 10:57 | Report Abuse

Byk intelligence discourse here. I lost track.. ride intelligence people here should be good.

Posted by Cindy Ling > 2017-03-20 10:13 | Report Abuse

again.... in the list of top 10 loss >.<

Posted by RainT > 2017-03-20 10:27 | Report Abuse

Opportunity to buy buy

Posted by Jay > 2017-03-20 10:37 | Report Abuse

everyday up down a bit hard to collect also. let it flush, I'll just wait until the operator has collected enough

Posted by suregain > 2017-03-20 10:41 | Report Abuse

oil px not stable

Posted by 逍遥子 > 2017-03-20 11:54 | Report Abuse

If u are in for long term then Just put aside and relax, someone want to press down the price then let it be, sooner or later the fundamental value will be slowly unlock.

Posted by paperplane2016 > 2017-03-21 00:33 | Report Abuse

Raider bro what is your opinion for petronM? I guess it can goes toward rm9

Posted by stockraider > 2017-03-21 00:39 | Report Abuse

Petron should be good....bcos mkt is valuing it lowly compare with Pet Dag loh....!!

Petron deserve better valuation to the tone of Rm 9.00 loh...!!

This type of business is cyclical but in long run it always make good monies mah.....!!

Posted by suregain > 2017-03-21 09:21 | Report Abuse

keep selling

Posted by Jay > 2017-03-21 09:22 | Report Abuse

bid ask spread widening, nobody wants to sell

Posted by paperplane2016 > 2017-03-21 09:23 | Report Abuse

wow. always great to get input from Raider bro. RM9 i will hold until

Posted by suregain > 2017-03-21 09:24 | Report Abuse

y always got seller cheap cheap oso sell??

Posted by 逍遥子 > 2017-03-21 09:24 | Report Abuse

For those that are worry then mah sell loh !!

I will buy more if the price is right.

Posted by paperplane2016 > 2017-03-21 09:25 | Report Abuse

below 5.80 please. wanna add little more

Posted by suregain > 2017-03-21 09:26 | Report Abuse

now oredi below 5.80.. u can add anytime

Posted by 逍遥子 > 2017-03-21 09:31 | Report Abuse

"Manipulation" that is all I can say.

Posted by Cindy Ling > 2017-03-21 09:41 | Report Abuse

Again list in top 10.....

Posted by tradeview > 2017-03-21 11:46 | Report Abuse

I still like PetronM

Posted by myongcc5 > 2017-03-21 11:47 | Report Abuse

Good stock hard to come by but takes time to go up due to non speculative nature n it's weight

Posted by probability > 2017-03-21 11:49 | Report Abuse

imagine with this crude price..gov maintained current petrol price in April

Posted by ysh8793ysh > 2017-03-21 12:04 | Report Abuse

http://www.cnbc.com/2017/03/20/oil-prices-rise-on-talk-that-opec-could-extend-supply-cut.html

Posted by ysh8793ysh > 2017-03-21 12:21 | Report Abuse

http://www.reuters.com/article/us-global-oil-idUSKBN16S040