HIBISCS (5199): Company Shares Transactions

The concern Maybank has is the capex if I were not wrong. Hibiscus may have to borrow quite some money to pay for the Brunei asset, maintain current dividend and a USD 260 mil capex.

1 week ago

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1 week ago

kl_guy

look like the IB or big boy using RSS to keep price down.

1 week ago

Is this double bottom?

1 week ago

wattsy

Kahhoeng, this isn't correct. The final consideration will be significantly less as the asset effectively transferred to them 1st Jan 2023. They have been collecting profit against the final consideration for almost 21 months now. It's another great deal for hibiscus - they will end up paying circa US$160 mill and every month it's making significant profit. If Oil and Gas prices stay where they are their profit will increase another 30-40% for Q2 this FY. This includes all their Capex spend which is increasing production and opening up new production. Their stock is an absolute bargain.

1 week ago

watssy, that's what I come to believe after reading Maybank's report on Hibiscus, not mine.

To me, Hibiscus's revenue wise, there'll be less FY 2025. 1st, production from existing asset will be less FY2025 at around 7.5 mboe compared to FY2024's 7.85 mboe (drop 4.5%). 2nd, exchange rate that's less favorable, 4.31-4.35 currently compared to FY2024 mostly between 4.6-4.7 (drop 7.5%) 3rd, on top of that, a lower brent/tapis oil price, 82+/- compared to FY2024's 90+/- (drop 9%) currently. Having said that, FY2024 operating cash flow from existing asset's close to RM 1 billion will be less that (at least 20%?) and profit will definitely not going to be as rosy as over 500 mil pre impairment/write-off FY2024.

Brunei acquisition depends greatly on going forward brent oil price, given it's product will be linked to brent (am I right?), on top of borrowing cost, given that Hibiscus has less than RM 300 mil free to use. But in the short-term, the newly added asset will surely be beneficial than keeping cash in bank. Long-term, all depends on how good this asset can perform long term, I guess.

FY2025 capex is 260 mil, that's more than RM 1 bil. So, I guess there's be borrowing given FY2025 operating cash flow should be lower, unless brent oil price suddenly spikes to above 90.

To assuage shareholder's concern, Hibiscus management should clarify how the money is going to come from should brent oil price is 75-80 and how it would impact its FY2025 PAT. The analyst meeting's very lousy, provides little when it could offer more.

https://www.youtube.com/watch?v=4kiiEScSk6k

1 week ago

To me, as an investor, I view the share price to be too cheap and won't mind buying some if price is cheaper

1 week ago

Jack Khan

If you look at crude oild future the price have not bottom out yet. There might be a repeated 46/barrel

1 week ago

Ok. In

1 week ago

Sangranghaeyo

That's not possible, Jack Khan. OPEC + won't allow oil price to drop that much

1 week ago

wattsy

Actually kahhoeng, Brunei is almost 100% gas. This is part of their pivot away from oil. Next year their production will reach 31k bOE/day from their Capex and Brunei acquisition. That's 30% more than present. They also have the ability to scale up or down Capex to suit - if the market drops they can stop spending cos when their production cost are so low (less than $20 per barrel) they can easily protect their margin. I think they've been very smart with their investments to date and I think this will start coming through over the next 6 months as these fall into place.

1 week ago

I know Brunei asset is mainly gas, but price to be determined with brent from what I read. Oil below 40? Good luck to us all. I am buying oil assuming Brent will be above 75 for a while

1 week ago

rojakmee

In oil & gas , the benefit outwit the cost in acquiring new assets, just look at petronas they keep expanding since the profit generated is well above interest cost, oil price will never drop because supply is limited, I support hibiscus in acquiring new assets

1 week ago

hng33

For now though, optimism is running high, even among sell-side strategists. Nomura Holdings Inc this week upgraded equities in both Indonesia and Malaysia citing solid macro fundamentals, while HSBC Holdings plc noted that Indonesian stocks had started commanding a bigger heft in the portfolios of Asian funds.

The ringgit and rupiah are among August’s top three gainers against the dollar in a basket of more than 20 developing-nation currencies. Fed chair Jerome Powell said this month that the time had come to cut its key policy rate, affirming expectations that US officials will begin lowering borrowing costs from September.

Exchange-rate watchers see likely further weakness in the greenback giving emerging-market currencies more wind in their sails. With foreign currency holdings at banks in Malaysia and Indonesia near a record according to data compiled by Bloomberg, more support is seen coming when exporters convert their dollars into local currencie

Remark: HIBISCUS derive USD profit, but, it's major earning contributor is from Msia operation, which paying in RM cost. Furthermore, crude oil have decrease from USD 89 to current USD 75-78, therefore, hibiscus next earning will record lower profit.

1 week ago

wattsy

Hibiscus actually has around 650 mill in unrestricted cash. Debt is reducing from term loan to around RM350 mill at present - it's not due straightaway of course and they have facility for more. Interesting thing then is that the entire Brunei acquisition is likely covered by their present free cash. I sure they may leverage a bit more debt but it looks very healthy to me. Just wish they'd get more agressive with better dividends and share buy backs. I wonder if eventually the global oil supply deficit will eventually push prices up. Difficult to understand with so many moving parts but Opec won't want oil prices below where they are at presently and will probably defend the downside.

1 week ago

https://ir2.chartnexus.com/hibiscuspetroleum/docs/presentation/QR%20Q4%20FY2024%20Analyst%20Briefing%20Final.pdf

slide 15, net cash 238.5 mil or was I wrong?

1 week ago

Bcoz hibiscus has to pay the deposit for the acquisition of Brunei asset

1 week ago

https://disclosure.bursamalaysia.com/FileAccess/apbursaweb/download?id=148095&name=EA_GA_ATTACHMENTS

The purchase consideration is approximately RM 1.21 billion, with RM 0.23 billion already paid, leaving RM 980 million. There is no mention how much dividend has been declared for FY2023, so the maximum amount yet to be paid should be at least RM RM 700 million, assuming FY2023 and 9 months FY2024 RM 280 million was declared (quite generous already?). With RM 230 million and assuming this amount should be kept for rainy days, Hibiscus will have to secure RM 700 million loan for Brunei acquisition, RM 370 million for dividend (assuming dividend to be the same as FY2024), and RM 450 million for capex (USD 260 million or RM 1.15 billion - operating cash flow of RM 700 million, assuming 30% drop (reasonable?)). That would mean, assuming brent is relatively stable, Hibiscus will need to raise approximately RM 1.52 billion, correct?

1 week ago

thesolarguy

The payment for Brunei is substantial.

1 week ago

Didn't u read that the acquisition was done many years back. The profit accrued from the time of acquisition till October 2024 is almost sufficient to cover the cost of acquisition. And the capex. Didn't u read it's just a estimated capex. Same like the capex for 2024 was estimated to be higher but actual is lower? Dr K had grew this company from a few k bbd to almost 35k bbd in 2025. Can't you just has faith in his management and numbers

1 week ago

370 million for dividend? 7.5cents per share. With 80 million shares it will be about 60 million? I was wondering u keep bad mouthing hibiscus and wat is Ur intention if Ur facts and figures r wrong

1 week ago

ahh... my bad. I invested in Hibiscus, trying to understand the whole picture, don't get so upset. So, with dividend staying the same, that would still mean Hibiscus will need to raise approximately RM 1.21 billion, assuming projects and dividend stay? I put RM 700 million for Brunei acquisition after assuming RM 280 million was declared by the Brunei assets to be enjoyed by Hibiscus. Is 280 million too little or too much?

1 week ago

Pants drop till ahma also cannot recognise. Haha

1 week ago

To be frank, I have been investing in hibiscus for a decade. From the Brent price of 100 to negative territory and back up to 130 and now 70 plus. Throughout this journey the return is not as good as other god like counters. But then we have to ask ourselves a question. Did the hibiscus management failed us before in terms of their guided production, forecast dividend, acquisition. As far as I remember, everything they promised they do make it come true. The only setback in this counter is the continuous fall of share price. But that's the consequence of expansion, as somebody knew that with the acquisition, new drilling, high capex, the company wouldn't be able to fight the market using share buy back. However as soon as hibiscus made more n more profit, the free cash flow in the coffer may finally be used to support its share price

1 week ago

NinjaInPyjamas

Just compare the production qty, oil price and USD/MYR for now vs 2018-2019. Without capex, they can easily pay rm0.50 dividend. Want or dont want only. Why dont want ownself figure out.

1 week ago

The purchase price is about 1.2 bill. Deduct 20 percent of down payment then it's about 950 mill. Deduct the retained profit since 2021 till now, maybe another 400 mill. Deduct again the sliding USD myr rate by 8 percent which is about 40-50 mill. So I guess acquisition might just be around 500 mill range.

1 week ago

Exactly ninja. The management decided for expansion than returning all profit to us. But am I sad about it? No. Bcoz the acquisition of repsol asset has proven to be deal of the century. And with the current depressed share price, it always provide us a chance to buy in. Those who keep pressing give us a chance to collect more.

1 week ago

Why jump down?

1 week ago

Are you all fear now?

1 week ago

raymondroy

The unit production costs for these assets for the 12 months ended 31 December 2023 have decreased (currently averaging USD 25.54 per boe, USD 21.31 per barrel, and USD 13.32 per boe for Anasuria Cluster, North Sabah and Peninsula Hibiscus respectively).

Therefore if Brent at $80/bbl thats 80-25.54=54.46 profit?
Thats 25.54 x 7,865bbls x 365 days = $73,318,316 per annum?
Is this correct ?

1 week ago

nazr690519a

kahhoeng,
MB concern on capex is not a concern at all. The reason behind why Jeremy Yap from MB gave lower TP is his NPV is lower than the rest. Very much lower. Any companies can easily get borrowings from banks e.g. E&O, Parkson
2 Less revenue FY25. 5199 has a production target for 2025-2026. 5199 intend to produce 35,000 - 50,000 bpd. As of today, 5199 already achieved the lower end of its target for 2025 -2026. That is 35,000 bpd.
3 As of reduction on production from existing asset in FY2025. Sometimes, they did this on purpose. You sell everything you got when price is high. You keep some when price is low. We do this all the time. Crude and LNG tankers just anchored nearby waiting for offtakes/offloading. There are also other fields are in 5199 pipeline e.g. North Sea, PM3 CAA and expected to go online early next year. This includes Brunei assets as soon as TotalEnergie agrees. And it appears that 5199 is very confident this will happen soon. The existing staffs just change their fireproof coverall from TotalEnergie to Hibiscs. And off they go.
4 As for lower exchange rate & crude oil prices. We especially those in Oil&Gas upstream industry know we can always increase our production to compensate this. It is true that Brent oil once dipped below USD40 or even gone as low as USD21, this is due to new entrant, oil shales. OPEC didn't want to loose their market share, so they dropped their selling price to maintain market share. Now due to fracking process, many countries banned extracting crude oil using fracking process.
5 5199 already made their forecast from 2025 onwards, brent oil will drop further from 72 - 75 range. And they already have a mitigation plan in place.
I find that these concerns are exaggerated and not taken into account that OWNERs or COMPANYs build tanks that they dont explode, structures that wont fail and ships that wont sank.

6 days ago

nazr690519a

+ Oil wells that won't leak

6 days ago

Well said nazr690519a. The share price is out of our control. But the fundamentals can't be manipulated. Hibiscus has always plan ahead of time. We just need to follow their plan

6 days ago

nazr690519a, thanks!

I suppose, we can only wait to see

1. How much Hibiscus has to prepare to pay for Total's asset in Brunei. If it's below RM 700 mil, that would be a plus? And what would the total debt Hibiscus has to take given dividend/capex plan and Brunei acquisition?
2. How low actual oil and gas price relative to Hibiscus forecast, assuming Hibiscus has in place a mitigation plan. My assumption is a FY25 operating cash flow of about the same or slightly lower with the Brunei's asset due to lower price going forward (bad economy or competition?) Delivering a higher operating cash flow above RM 1 billion would be considered positive?
3. The ability of Hibiscus to actually cutting capex should oil price dip below 75 to a level Hibiscus balance sheet can afford?

6 days ago

What!

2 days ago

Oo｡

2 days ago