What I learnt from Petron AGM - Jay

Yesterday was Petron’s AGM but unfortunately I’m out of town. However, my nephew was there to attend on my behalf and so below are the notes in Q&A form he took down for me. Hope this would help shareholders who are not present and also appreciate if shareholders who are present can add on or correct if there are any missing or inaccurate points.

1.     Retail market share
1Q15: 16.6%, 1Q16:17.4%, 1Q17:19%
2.     Breakdown of gross profit

	2016	2015
Marketing margin	418	321
Refinery margin	86	262
Inventory gain/(loss)	60	(49)
Gross profit	564	534

3.     Reason for profit improvement in 2016?
Improvement in gross margin
4.     Reasons for decrease in other income, increase in other operating income and decrease in other operating expenses
Lower realized forex hedging gain, higher service station license fee and higher deposits, lower realized forex losses
5.     Factor of increase in sales volume
Expansion program, innovative products, customer service, promotions
6.     Expansion plans
16 new stations so far this year, 23 completed and to be opened soon, target at least 50 for full year
7.     RON100 and Turbo 5 sales
So far encouraging and they help in branding
8.     Hedging policy
Commodity 40%, Forex 80-90%, the remaining natural hedge from exports
9.     Capex plans
RM150m for 2017 to expand network and logistics and improve refinery efficiency
10.   $1.5b expansion of refinery and new petrochemical plant
Still reviewing options, including debt and equity funding, will update shareholders once they have decided
11.   Impact of weekly petrol pricing
No impact on profitability as retail petrol still under APM for gross profit of around 5c per litre (5c calculated based on refined product price), net profit depends from station to station
12.   1Q17 cost of sales increased by 15% while Brent only increased 8%, why?
Forex ringgit depreciation
13.   Are the good performances sustainable? Is management confident of repeating the good results?
Volume and operating efficiency yes, marketing business is also doing very well
Margins are up to market forces, best if there is a stable market
Overall management is confident
14.   High % held by Petron holding and plans to address public spread
Due to MGO last time. No plans for now
15.   RPT with Petron Fuel International (PFI)
Buy and sell products with PFI. Depending on the distance between service stations and terminal, if Petron station is near to PFI terminal will buy petrol from PFI, vice versa
16.   Fire incident
No effect on operations and supply, refinery operational again within a week. Have risk management, emergency response and business recovery plans when somehow preventive steps fail
17.   Litigation case
Already won the case in Court of Appeal and Federal Court, plaintiff still not satisfied and appeal to Federal Court to review the decision, hearing on 24 Aug 2017.
18.   Fair value instrument (pg 100 of AR)
Mark to market hedging instrument for commodity
Realised gains go into cost of sales, unrealized gains go to other income/expenses
19.   Strong cashflow, higher dividend?
Petron Corp has 25% dividend policy but Petron Malaysia not subject to it. Will review annually and decide whether to have a policy and how much to pay shareholders
20.   Is lower crude price beneficial to Petron Malaysia?
As downstream player, more concerned on margins
21.   % of revenue from retail and commercial
70% retail, 30% commercial
22.   LPG market share
12%
23.   How are properties valued? Any revaluation?
Cost basis. No revaluation as it is costly and not Petron’s plan to profit from land appreciation
24.   Is the refinery Euro-4 compliant and where is RON100 produced?
Already compliant, RON100 produced locally in Port Dickson
25.   How much export sales
Very low less than 5%, only by-products
26.   Out of 580 stations, how many owned by listed Petron?
55-60%, new expansions will also be around that %
27.   Next mandatory shutdown date
2018
28.   Refinery at full capacity, does Petron import from Philippines?
Refinery at 60% utilization, all sold for domestic, except by-product
29.   Amortization of PPE
Leases and turnaround costs back in 2015. Lease amortised based on terms of lease, turnaround based on 3 years to the next maintenance
30.   Why are there sister companies and how are RPT conducted?
All these date back to Exxonmobil times when Exxon and Mobil merged. Part of the anti trust provision is that both companies have to be segregated even though branding may be shared. So are Exxonmobil Malaysia before Petron Corp bought over. So nothing sinister and all RPT are conducted on arm’s length

My takeaway
1.     Marketing/retail biz is doing very well
They are gaining market share and has robust expansion plans
2.     No major capex in the near term
Only expansion of service stations and refinery efficiency improvement since refinery already Euro-4 compliant. RM150m capex plan shouldn’t eat much into its cashflow, so the company should achieve net cash by next quarter or at least end of the year
3.     New plant expansion still premature
No details provided. If eventually it happens, most likely majority of funding will come from debt since they have a plant as security and the company has strong cashflows.
4.     Main source of profit is not dependent on crude price
Dependent on the price differential/margin/crack spread
5.     Number of petrol stations still room to grow
Now we know the listed Petron owns around 320-350 stations, the rest are by its sister companies. This may be relatively low compared to Shell around 900 or Petdag more than 1,000. But good thing is Petron is growing faster both in terms of number of stations and market share
6.     No hanky panky with related companies
The explanation provided on why related companies exists and how they conduct RPT are perfectly understandable. And I don’t suspect that there are any transfer pricing issue between them

What I still do not understand
1.     Breakdown of gross profit
Refinery profit is much lower in 2016. When I look at crack spreads data, it is lower in 2016 compared to 2015 but not that much lower. I suppose maybe we need to include inventory gain/loss together since crack spread already take into account your crude oil price. So maybe when crude price dropped in 2015, there’s inventory loss but refining gross profit benefited as a result. The opposite happen in 2016. Just a guess.
Meanwhile, it is weird when marketing/retail profit increased by 30% in 2016 when I don't think their volume grew that much. As Petron refine crude oil and pass it down to its stations or dealers before selling to final customers, I’m not sure how they classify between refinery and marketing profit. Maybe some of the refining gain is passed down to marketing?
2.     Refinery apparently not at full capacity and they do not import
As pointed out by others, we understand that its refinery is not running at full capacity but initially we thought that it was by design and it is insufficient for them to cater to their local sales. However, it doesn’t seem like the case based on what they answered.

Summary
Overall, I’m quite happy with the info I got (I will give my nephew a big angpow next CNY).
The company gives me the impression that it is very well-run and is a growth company with ambitions to expand.
Unfortunately I don’t think I can claim to fully 100% understand the business. However with the new info, my investment case hasn’t changed. I still like Petron for its growing biz, stabilizing refining margins and strong free cashflow. Previously I expect RM1-1.20 EPS for 2017, this haven’t changed post results but probably I’m looking at the higher end rather than lower end.
Why am I so conservative? Because ultimately they are still in commodity biz and like what management guided, their profitability is still to a certain extent dependent on market forces. So I still treat 40c EPS a quarter as bonus but would still be perfectly happy for around 30c EPS each quarter. If it achieves RM1.20 EPS, it is trading at slightly less than 7 times PE.
Alternatively, I prefer to look at free cash flow. Using market cap/FCF may not be comprehensive as companies may have different capital structure, so I prefer EV/FCF.  I compare the EV/FCF of Petron against Hengyuan, PetDag and another supposedly cashflow generating machine, Litrak. As some of you may know, cashflow sometimes may fluctuate over time so I took past 2 years plus latest quarter annualised and their average. With that I get this result which I think is pretty self-explanatory.

	Market cap	Cash	Debts	EV	FCF	EV/FCF
	RM million	RM million	RM million	RM million	RM million	times
Hengyuan
2015	1,491.00	175.52	1,481.05	3,147.58	685.36	4.59
2016	609.00	355.61	1,416.91	2,381.53	(32.63)	(72.98)
1Q17	1,743.00	339.72	1,414.01	3,496.73	(46.14)	(75.78)
Average				3,008.61	202.19	14.88
PetDag
2015	24,685.98	(1,291.27)	211.82	23,606.53	344.72	68.48
2016	23,633.40	(2,431.64)	118.77	21,320.53	1,856.72	11.48
1Q17	24,030.60	(2,323.68)	104.98	21,811.91	818.15	26.66
Average				22,246.32	1,006.53	22.10
Litrak
2015	2,635.00	(334.64)	1,283.00	3,583.36	257.36	13.92
2016	3,098.76	(424.45)	1,291.39	3,965.69	242.20	16.37
1Q17	3,109.30	(552.65)	1,229.71	3,786.36	387.01	9.78
Average				3,778.47	295.52	12.79
Petron
2015	1,350.00	(159.27)	543.82	1,734.55	249.73	6.95
2016	1,120.50	(171.64)	307.96	1,256.82	302.64	4.15
1Q17	2,211.30	(204.84)	251.49	2,257.95	359.09	6.29
Average				1,749.77	303.82	5.76

If Petron trades at 10 times EV/FCF (similar to Litrak but still below its average), EV should be RM3.6b. Excluding net debt, market cap should be around RM3.5b or roughly RM13!
With stable margins, growing retail biz (more than 300 petrol stations and counting), strong free cashflow of >RM300m a year, strong balance sheet (turning net cash soon), does it deserve to trade at current valuation?
I will leave it to market to decide

Lastly, again a share of some crack spread data
2Q17 vs 1Q17 vs 4Q16
Tapis: 8.50/8.47/6.78
Minas:11.95/11.95/11.03
Gulf: 12.91/11.96/10.61
Northwest: 11.59/9.50/9.42

Happy investing
Jay

Petronm: It's Time for a Math Class

http://klse.i3investor.com/blogs/sumato88/122720.jsp
Wow, I am so surprised that many ppl don't get my logic and my calculations for Petronm's 1Q17 profit. Let me put things in order and hopefully you can see it now.
1) Malaysia operations (listed co + 2 non-listed co in Malaysia owned by Petron Corp) reported Peso 1.5bn net profit in 1Q17, +335% yoy. So, 1Q16 net profit from Malaysia operation = Peso 345m
     Workings
       a) (1Q17 profit /1Q16 profit) - 1 = yoy growth
       B) (1500/345) - 1 = 335%  (In case you are still confuse, ask yourself, what's the yoy growth rate if your profit increase from 100 in     1Q16 to 150 in 1Q17? The answer is 50% right? Pls apply the same formula.)
2) Peso 345m net profit in 1Q16 equal to RM30m. This was the profit from Malaysia operation in 1Q16, including 2 non-listed co. So what's the profit belong to non-listed co? Petronm (listed co) reported RM16.6m net profit in 1Q16, so
       A) Petronm's 1Q16 profit + 2 non-listed co 1Q16 profit = RM30m
       B) RM16.6m + 2 non-listed co 1Q16 profit = RM30m
       C) 2 non-listed co 1Q16 profit = RM30m - RM16.6m = RM13.4m

3) Given that 2 non-listed co is involved in fuel marketing and retailing (basically means petrol stations la), the profit growth should be steady due to fixed margin, so it should grow in tandem with sales volume growth. Petron Corp mentioned Malaysia sales volume + 6% yoy in 1Q17, so we can safely assume 2 non-listed co profit grow 10% yoy in 1Q17, from RM13.4m to about RM15m.

4) So how much of RM130m or Peso 1.5bn 1Q17 profit attributes to Petronm?
   RM130m - RM15m (2 non-listed co estimated profit) = RM115m (42.6 EPS)

My final advise, if you still don't understand, please don't buy any stocks anymore as stock investment could be way too complicated for you.

Petronm: A Simple Math, 5x PE even after the 100% rally YTD?

First, I would like to congrats to all the shareholders of Petronm who do not sell the shares due to oil price volatiliy. The coming quarter results will be a reward to the believers. As some of you may have aware, Petron Corp (the parent co of Petronm) has released a press statement on 8 May 2017 and mentioned that net income from Malaysia operation in 1Q17 surged 335% to Peso 1.5bn. Many are guessing the profit that the listed co, Petronm will report in the upcoming 1Q17. Well, let me try to solve this simple math.

1) Peso 1.5bn = RM130m net income in 1Q17, given that Petron Corp didn't mention this is net income after minority, we can safely and conservatively assume this is the Malaysia operation net income before minority.

2) 335% yoy increase implied 1Q16 net income from Malaysia operation = Peso346bn or about RM30m

3) Both of these numbers include 2 non-listed sister co that Petron Corp owns in Malaysia, hence, we need to figure out how much is the profit belongs to the non-listed entities.

4) Petronm reported RM16.6m net income in 1Q16, as a result, non-listed sister companies should have contributed RM13.4m in 1Q16.

5) Given that the 2 non-listed sister companies are in fuel marketing and retailing biz, it is safe to assume that the profit growth is likely to be very steady, rise according to the volume + some margin improvement due to operating leverage. As Petron Corp mentioned Malaysia sales volume +6% yoy in 1Q17, we can assume 10% net income growth for non-listed sister co for 1Q17, which probably works out to about RM15m profit.

6) If you minus RM15m out of RM130m net income reported by Malaysia operation, we can get a profit estimate of RM115m for Petronm in 1Q17, this is a whopping 7-fold increase from 1Q16 and another quarter of RM100m profit!

7) I understand that the crack spread is still relatively stronger qoq in April and May to date. If this sustain throughout the 2Q17, we will probably see another RM100m profit in 2Q17, paving way for Petronm to achieve net cash position and record profit in 2017. Initially I was looking at RM300m profit in 2017, but now it seems to be easily beaten if Petronm can achieve RM200-230m profit in 1H17.

In conclusion, I think there is still plenty of upside from current share price, even though the stock had a good rally YTD (almost 100%). At 5x PE (assuming RM400m profit, +63% yoy), I personally think this stock is too cheap to sell.



PETRON Corp's Media release entitled "PETRON POSTS RECORD QUARTER, HITS P5.6 BILLION IN NET INCOME".

Market leader Petron Corporation continued its strong momentum in the first three months of 2017 posting a consolidated net income of P5.6 billion – the highest quarterly income in the company’s history – double the previous year’s first quarter earnings of P2.8 billion. Net income from Philippine operations grew 69% to P4.1 billion and accounts for 74% of consolidated figures while income from Malaysian operations surged 335% to P1.5 billion.
Petron’s exceptional performance in both markets is mainly due to its strong focus on more profitable segments, production of higher-margin fuels and petrochemicals, and aggressive market expansion.
In the Philippine retail segment, Petron’s volumes grew by another 6% while its LPG and Lubricants businesses grew by 5% and 16%, respectively. Currently, Petron has the highest network count with about 2,300 service stations – more than its next three competitors combined – which retail its cutting edge fuels and serves as outlets for its other products and services.
Petrochemical export volumes more than doubled over the period allowing Petron to capture better margins from benzene, toluene, mixed xylene, and propylene. Meanwhile, exports of fuels were lessened as more volumes were sold locally as part of the company’s strategy to optimize margins.
The company’s Malaysian operations also experienced steady growth with domestic volumes growing by another 6%, fueled by double-digit growth from the Commercial and Lubricants sectors.

 

Petronm: A Snapshot Speaks for Thousands Words

Comparison (Shell VS Petronm VS PetDag)

Petronm: Growing evidence of record 1Q17

Spike in maintenance expected to boost oil refining margins
http://www.reuters.com/article/us-oil-refinery-maintenance-idUSKBN15G55W

Reuters, 2 Feb 2017- Increased refinery maintenance in Asia and the Middle East is expected to boost profits for operators in other regions in the first half of this year, market watchers said on Wednesday.

Refineries worldwide ran hard during the past two years to capitalize on low oil prices, with Chinese refineries processing a record amount of crude in 2016, meaning that some units now have no choice but to carry out maintenance.

Outages in the first half will equate to nearly 1 million barrels per day (bpd) more than in the same period last year, speakers told the Platts Middle Distillates conference in Antwerp. 

Though this is likely to help to clear the stocks of oil products such as diesel, gasoline and jet fuel that poured into the world's storage tanks over the past two years of excess, it is also likely to cut into demand for crude oil just as prices recover on the back of production cuts led by the Organization of the Petroleum Exporting Countries (OPEC). 

Trading house Gunvor's chief economist, David Fyfe, said that he expects "healthy and robust" refinery margins in the first half of the year.

Gunvor data shows that maintenance in February and March will take close to an additional 1 million bpd offline compared with the same months in 2016. 

Both Fyfe and James McCullagh, oil products analyst with Energy Aspects, said the bulk of the work will be concentrated in Asia and the Middle East, offering a reprieve to Europe's comparatively less advanced refineries, which have depended largely on demand -- or supply problems -- in other regions to underpin profits.

Energy Aspects expects Asian refineries alone to account for 900,000 bpd more in offline capacity in April, compared with the prior year, and 250,000 bpd more over first half of 2017. Those shutdowns, paired with diesel stocks in China that it estimates are near record lows, would underpin refinery profits in most regions, he said. 

Fires and other issues at refineries worldwide this month suggest that many units are feeling the effects of the ramp-up in output over the past year or two.

"The strong margins have in a way stored up unplanned outages," McCullagh said.

This month's outages included Abu Dhabi National Oil Company's Ruwais refinery, two refineries in West Africa and others in India, Indonesia and Brazil.

S.Korea's S-Oil expects firm refining profits in 2017

http://www.cnbc.com/2017/02/01/reuters-america-update-1-skoreas-s-oil-expects-firm-refining-profits-in-2017.html

SEOUL, Feb 2 (Reuters) - South Korea's S-Oil Corp expects healthy refining profits this year, buoyed by growing demand for oil products in places such as China and Southeast Asia.

The country's third-largest oil refiner said in a quarterly earnings statement on Thursday that global oil demand would grow soundly in 2017, although the rate of increase could ease slightly from last year.

"Healthy margins are expected as 1.32 million barrels per day (bpd) of oil demand growth will outstrip an incremental net capacity increase of 574,000 bpd," the company said, referring to the profit margin on refining barrels of crude oil.

Inventory gains and a recovery in refining margins helped S-Oil, whose top shareholder is Saudi Aramco <IPO-ARMO.SE>, notch up a 444 billion won ($386 million) profit in the last quarter of 2016, compared with a loss of 42.9 billion won the year before.

S-Oil treasurer Shin Kwan-bae said on a call with analysts that the company expected the official selling price (OSP) for Arab Light crude, supplied by Saudi Arabia, to remain steady in Asia from last year.

He said that even if Middle Eastern crude supply drops in the wake of a deal by producers to curb output, Saudi Arabia would not want to harm its market share in Asia by increasing OSPs.

A company official said S-Oil planned to carry out less scheduled maintenances this year, limiting such work to a condensate fractionation unit (CFU) and a No.2 paraxylene unit. He did not give further details.

Industry sources have said S-Oil would shut down its No.1 residue hydro desulphurisation unit (RHDS) and crude oil refining unit in April for about a month.

S-Oil also said on Thursday that its 2018 expansion project was on track to complete in the first half of next year.

Under the project, the company will build a residual fuel oil upgrading system and an olefin production system that will churn out 405,000 tonnes of polypropylene a year, along with other products.

 

 

Asian Oil refinery margins jump on outages in Mideast, Asia

 

http://www.reuters.com/article/us-asia-crude-refineries-idUSKBN151183 

 

 

Reuters, 17 Jan 2017- Several refineries in the Middle East and Asia have shut down in the past week due to fires and other technical problems, leading to a jump in profit margins for facilities still operating.

The higher Asian refining margins have beat back concerns that profits would fall as crude oil prices gained as the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers began to implement their agreed production cuts from January to reduce global oversupply. 

Besides the fires and other shutdowns, maintenance and repairs at refineries in Indonesia by Pertamina [PERTM.UL] and in Singapore by Royal Dutch Shell have further boosted oil product margins. 

"Margins will be supported as these outages will affect the ability of the region to stock up before maintenance picks up in March," said Nevyn Nah, a fuel analyst at Energy Aspects in Singapore. 

Profits for processing a barrel of Dubai crude at a Singapore refinery jumped to $7.64 a barrel on Jan. 16, the highest since Nov. 30, Reuters data showed.

 

 

(richDad) - PETRONM: More than 50% upside (PETRON CORP media release says 1Q earnings to TRIPLE)

1. Main business = oil refinery and retail. These descriptions are from their website which says “Petron Subsidiaries in Malaysia comprise of Petron Malaysia Refining & Marketing Bhd (formerly known as Esso Malaysia Berhad), a public listed company listed on Bursa Malaysia; Petron Fuel International Sdn Bhd (formerly known as ExxonMobil Malaysia Sdn Bhd); and Petron Oil (M) Sdn Bhd (formerly known as ExxonMobil Borneo Sdn Bhd). As a major and reputable company in Oil & Gas, our involvement in refining and retailing of world-class quality of petroleum products and related services, helps the country to meet its energy demands and contributes to the overall socio-economy advancements. Our robust petroleum marketing business that encompasses over 550 service stations nationwide bring high quality, clean energy products to motorists.” 
In lay man term, the retail business is the petrol station that we see and possibly pump petrol. In order to get the oil to the station, they need to refine it first (from the crude oil). So, PETRONM is also involved in refining the crude oil to petrol and other products. If you ever wonder how many stations does PETRONM has, it is 550 from the website.
To fully understand what PETRONM does you can visit their website here
http://www.petron.com.my/web/site/slider/9


2. Stellar earnings growth in 4QFY16 (+593% to RM112.62m). Accordingly, EPS also jump 593% to 4171sen. Reason for the earnings surge can be seen below. It is mainly due to 13% increase in sales volume (which means this is operation improvement and is sustainable).



3. Consistent paid dividend (10 out of 11 years) in the past. FY16 dividend has increased by 10% to 22 sen (against 20 sen in FY16). The Company has consistently paid dividend in the past with only one miss in FY14 (but that one is due to loss in that financial year under previous management).

4. SUPER CATALYST = 1QFY17 earnings to triple??? Sometimes, you need to monitor global news as it is increasingly hard to make ALPHA GAIN from the market in Malaysia. Just three days ago, PETRON CORPORATION (parent company of PETRON MALAYSIA made an announcement of its 1Q profit which doubled. BUT the most important thing is it mentioned that
Income from Malaysia operation surged 335% to Peso 1.5 billion (about RM130m). AND Malaysia investors may not fully realize this because it is not annouced yet in the BURSA!!!
You can read the full Media Release from Singapore Exchange here
http://infopub.sgx.com/FileOpen/05%2008%2017%20-%20Media%20Release%20-%20Petron%20Posts%20Record%20Quarter%20Hits%20P5.6%20Billion%20in%20Net%20Income.ashx?App=Announcement&FileID=452503

5. Long term value is between RM12 to RM15 per share. There is more than 50% upside that I am looking at. I think that the Company is worth between 8x to 10x PE. The 8x PE is if you take oil and gas Company PE. While the 10x PE is the minimum for consumer sector PE. I think PETRONM is a mixture of O&G and CONSUMER because its petrol station business is basically similar to 7 ELEVEN. For FY17, the 1Q net profit is assumed at RM130m and I multiply this by 3 to get the full year earnings. I purposely ignore one quarter for conservativeness purpose in my calculation (that's why not multiplying by 4).
That gives me FY17 earnings of around RM390m (or RM1.45 of EPS).
8x PE * RM1.45 FY17 EPS = RM11.60 (round up to RM12)
10x PE * RM1.45 FY17 EPS = RM14.50 (round up to RM15)
For record keeping purpose, I am using last Tuesday closing price of RM7.97

數據不會“說謊”，白銀值得持有的三大理由

匯金網訊: 白銀市場的需求正在回升，儘管目前水平與2016年7月觸及的高點仍相距甚遠。美國白銀期貨市場顯示白銀受到投資者熱捧，自2015年中期以來，中國持有白銀的數量也迅速攀升。此外，摩根大通也在積極囤積白銀。
【理由一、生產商持有的白銀凈空頭頭寸攀升】
美國白銀期貨市場顯示白銀受到投資者熱捧，生產商持有的白銀期貨的總頭寸達到了19.76萬手合約，而去年八月觸及的記錄高位是22.45萬手合約。

(生產商持有白銀凈頭寸)
截至2017年2月28日，生產商持有的白銀凈空頭頭寸達到了54.7%，這是自2016年初開始的白銀上漲周期中最大的比例。生產商持有大量的凈空頭頭寸相當於投機者持有大量的凈多頭頭寸，這推高了白銀價格。
而有趣的是，白銀價格較2016年8月初下跌了11.4%，現貨白銀目前交投於17.81美元/盎司。
但是兩個跡象顯示了投資者對白銀的需求正在升溫：生產商持有的凈空頭頭寸較去年八月高(54.7% VS 48.6%)，投機者持有的凈多頭頭寸高於去年八月(48.3% VS 44.5%)。

(投機者持有的凈多頭頭寸)
四家最大的生產商持有的白銀期貨凈空頭頭寸自2014年底以來一直處於上升趨勢，而目前幾乎接近這一周期中的觸及的最高水平。

（四家最大的生產商持有的白銀期貨凈空頭頭寸）
【理由二：中國持有白銀的庫存迅速攀升】
自2015年中期以來，中國持有白銀的數據迅速攀升。截至2017年1月底，上海期貨交易所持有的白銀庫存達到紀錄水平6410萬盎司，而這一數據自那時起持續增加，目前已經攀升至6870萬盎司。

(上海期貨交易所白銀庫存)
【理由三：國際大投行摩根大通積極囤積白銀】
此外，摩根大通也在積極囤積白銀。自2016年底以來，摩根大通增持了940萬盎司白銀。這對白銀走勢發出更加積極的信號。

不過北美的投資者似乎對白銀的熱情減弱。iShares白銀信託基金，世界上最大的私人白銀持有者，其公布的報告顯示，自2017年初以來，白銀持有量下降了860萬盎司。

 來源: 匯金網

[Sponsored Infographic] The Berkshire of Malaysia - Insas Berhad

[Sponsored Infographic] The Berkshire of Malaysia - Insas Berhad
http://klse.i3investor.com/blogs/donkeystocks/115492.jsp


Insas Berhad, which is the parent company of several notable industry key players, such as Inari Amertron, Ho Hup Construction, SYF Resources and Omesti Berhad. Insas is arguably the mini Berkshire in Malaysia.

The building of EKOVEST & What are the plans ahead for Ekovest

Making strides: Lim with the KL River City project, which he envisions to turn into a thriving community like Yarra of Melbourne.

Datuk Seri Lim Keng Cheng has been working alongside his uncle, the billionaire Tan Sri Lim Kang Hoo, for decades. But this active businessman is drawing attention on his own now.
DATUK Seri Lim Keng Cheng was born in Jalan Gombak and studied at Setapak High School. Now, he has his eyes set on transforming the Sentul-Gombak-Setapak area, which he says is still underdeveloped. He aims to make the area into a liveable place like Melbourne.
This 54-year-old Sentul homeboy (who goes by the initials KC), the managing director of Ekovest Bhd, has rebuilt a Chinese primary school and a high school there.
Until recently, KC has not made himself distinctively known to the corporate world. His name did not pop into view when the media wrote about Ekovest and Iskandar Waterfront City Bhd (IWC). Only Tan Sri Lim Kang Hoo, the Ekovest executive chairman and KC’s uncle, was mentioned.

Yet, KC is the driving force behind Ekovest, which is Kuala Lumpur City Hall’s project delivery partner for the River of Life project and DUKE highways.

Early victory: Lim with a picture of a project he undertook in his early years in Sabah. He says he and his uncle Tan Sri Lim Kang Hoo made their first RM100mil while they were in Sabah.

He had also helped to build up Johor-based Tebrau Teguh Bhd (its name was changed to IWC in August 2014), which is in property development, construction and property management services.
Indeed, KC has been in the construction, property and infrastructure line for more than 30 years.
“I am a business partner of Tan Sri Lim Kang Hoo. Before Ekovest, we were already doing business together,” declares KC.
“But since he is my uncle and executive chairman of Ekovest, and holds 32% stake in the company, while I have only 6.12%, I should give him due respects,” adds KC at the outset of a recent interview with Sunday Star.
Yes, for too long, this trilingual and energetic man who has worked alongside Kang Hoo quietly to jointly build up their companies, including Ekovest and IWC. However, many are not aware of this fact.

KC’s role in Ekovest

Acknowledgement of KC’s role in Ekovest is stated in its latest company profile. Under the section Capable Management Team, the company writes: “Executive chairman Tan Sri Datuk Lim Kang Hoo and managing director Datuk Seri Lim Keng Cheng have been managing the company since (its) inception”.
Venturing into Sabah together with his uncle while he was 25 in the early 1980s, this neat-looking man proudly claims he was responsible for the building infrastructure in Felda Sahabat, twice the size of Singapore.
“We made our first RM100mil in Sabah,” says KC, as he shows photographs of the Sabah projects in his office that carry his footprint.
“I was born here, in Batu 4, Jalan Gombak, in a house with number 229A. However, there was no road linking my old house to the main road then. Kang Hoo also lived there then.
“The Sentul-Gombak-Setapak area is still an underdeveloped area. I want to transform this into a liveable place. This is why I want to do a lot of development and CSR work here,” says KC in Ekovest’s office, which stands obliquely opposite the area where he was born.
“The old house is still there. We – including Kang Hoo – still celebrate Chinese New Year there. But now, we have already built a road to connect with the main road,” adds KC as he flashes his handphone to show the location of his old house.
Due to his humble background and vast experience in infrastructure, KC says he could plan cost efficient and workable highways.
In this regard, he has contributed significantly to the success of the Duta-Ulu Kelang Expressway (DUKE). He is also instrumental in convincing Kuala Lumpur City Hall (DBKL) to grant further concessions to Ekovest to extend the DUKE expressways, named as DUKE-3.
DUKE-1 and DUKE-2 are providing alternative routes for road users and have served as an efficient traffic dispersal system in and around Kuala Lumpur to relief traffic congestion.
Toll collection and recent sale of a 40% stake in DUKE-1 and DUKE-2 have boosted the earnings of Ekovest and this is reflected in the rise of its share price. On Thursday, Ekovest share closed at RM2.35 – which was at a six years’ high.
Another of KC’s passionate project is the River of Life project, which involves the improvement of water quality and beautification works along the river from Gombak to the Kuala Lumpur city centre.
Ekovest, which has land-bank and property development projects such as EkoRiver Centre and Ekovst Tower along the river, has on its plate a total GDV of RM7.8bil when all the planned projects are completed.
“My vision is to convert the entire run-down area into a river city with waterfront property development and leisure activities. It will be a place for people to work, live, jog and cycle, cruise in water taxi like the Yarra River of Melbourne.
“Our vision of creating a world class river front development along Gombak River is gaining momentum and we are looking to deliver some of the most vibrant commercial and residential properties in this area.”
According to KC, multi-billionaire Kang Hoo – ranked as one of the top 30 tycoons in Malaysia by Forbes Asia in 2014 – is focussing his attention on IWC and the development of Bandar Malaysia.
KC is charged with taking care of Ekovest.
In a two-hour interview, KC talks enthusiastically about Ekovest projects, his vision and education. Below are excerpts:
Q: What is the latest on DUKE highways? Why are these highways so successful?
A: We have a DUKE Master Plan, with a total of ten functional and cost-effective highways. We are developing the third one. Our planning team will keep submitting proposals on future DUKE projects as and when the need arises.
Within this plan, we provide one tolled road system on top of an existing council road to give an alternative route for drivers who are willing to pay to avoid traffic jams.
We have studied the benefits to be enjoyed by road users and planned according to their needs. This is the success story of our DUKE.
The DUKE concept was based on a study done by JICA (Japan International Cooperation Agency) in the 1980s to fill in the gap in highway connectivity. We submitted our plan to DBKL and got the approval.

There are many highways all over Kuala Lumpur, but they are not connected. We fill in this gap and build “highway connectors”.
But we also innovate to add value to our highways. For example, we are building DUKE-2’s integrated park-and-ride facility at the Segambut Toll Plaza that will allow DUKE’s users to park their cars and hitch a KTM ride at a brand new KTM (train) station, which is two stops away from KL Sentral.
Known as Segambut Rest and Service Area, this park-and-ride complex will be able to house 4,000 cars. This will ensure fewer cars move into and out of the city centre. Hence, it will reduce traffic congestion. (The new KTM train station is expected to be completed in 2018)
Your property development projects appear to concentrate in the Sentul area.
I was born here. My original home is still here. There was no access road from Jalan Gombak to my old house, yet the postman could find it.
My father passed away when I was 14 years old. My study was funded by Lee Foundation. For this reason, I have rebuilt the Lee Rubber primary school building in this area. From road construction and property development to the River of Life project, I hope to create a liveable Sentul-Gombak-Setapak region The whole city will be like Melbourne and Vancouver.
All these years, you have been overshadowed by Tan Sri Lim Kang Hoo, although you are a property man in your own right. Is this observation accurate?
Ekovest, with total staff of 2,000, is managed by a committee. No single person makes the decision.
My uncle Kang Hoo holds a 32% stake in the company while I have 6.12%. As he is my uncle and the company’s executive chairman, I should give him due respects. When my father died, the small family construction outfit run by him was taken over by Kang Hoo. I started helping him when I was in high school.
When I was 25, we went to Sabah together and worked on the infrastructure of Felda Sahabat. In Lahad Datu, we provided 2,500 jobs to the gun-wielding unemployed and helped solve the social problems there.
While in Sabah, we took over a RM2 company called Ekovest. That’s where we made our first RM100mil for Ekovest. After that, we went to Labuan to build the offshore financial centre. Kang Hoo and I were business partners before Ekovest, and are still partners.
Now, Kang Hoo places his focus on IWC and Bandar Malaysia investment, while I take charge of Ekovest projects.

What are the plans ahead for Ekovest?
We will keep inviting institutional funds, such as EPF (Employees’ Provident Fund), to be our investors and strategic partners. These partners will stay and grow with the company. They will become our strong pillars.
Recently, we let go of a 40% stake in Duke-1 and Duke-2 to EPF for RM1.13bil. This will pave way for future partnerships.
We will do the same for future DUKEs and KL River City project. The funds obtained will be used to reward shareholders in the form of special dividend and finance new ventures.
(Ekovest has announced that it is distributing a special dividend to shareholders from the proceeds of its sale to EPF).
We have also set the target to become the top 30 listed companies on Bursa Malaysia within five years. This means that our market capitalisation has to hit RM10bil within five years, from the current RM2bil. It is achievable based on our growth.
But while doing so, we must maintain our policy to give out dividends every year. Since 1993, we have been profitable. This is something we are proud of.
We also believe in doing CSR work. We have given Chong Hwa Independent High School a total of RM2mil and next year another RM1mil. For the Government’s SM Chong Hwa, we have given RM3mil.
How do you see Ekovest’s future financial performance?
We are doing very well. Our order book is very healthy, with total outstanding external order book of RM4.89bil as at November 2016.
For the current financial year, we won the biggest-ever project (DUKE-3) worth RM3.74bil, with a 50-year concession to collect tolls. That means our construction segment will be busy for the next three and a half years.
In November 2016, we have also been awarded two contracts to improve and beautify the Klang and Gombak rivers.
The results for the year ending June 2017 will be much better. You can see from our revenue growth. It’s almost doubled in 2016. There is also vast improvement in net profit. (Ekovest posted a revenue of RM794mil and net profit of RM155.4mil for the year ending June 2016, compared to a revenue of RM438mil and net profit of RM18.5mil in previous year).

Does the high-level connection of Tan Sri Lim help in any way to obtain projects?
Ekovest is run professionally.
Based on our technical expertise and our ability to see what people need, we won these public transport projects. There is no objection from people when our projects are displayed to gauge the public reaction. This is because our projects fill in the gap and we collect toll to help future projects.
It is not political connections that help us get jobs. We think out of the box using blue ocean strategy, hence, we came out with the master plan for DUKE highways.
If it was political link, we would have risen sky high long ago.
We will self-create and generate income. In DUKE, we carry out the planning and infrastructure for the government, create income for future highways.
Nowadays, it is impossible for you to bulldoze through projects. You need to do surveys and carry out public engagement. No one has objected to our DUKE highway projects so far.

What is your vision for Ekovest?
I want to create a sustainable city, not just high-rise only. I want to innovate to create value. I also want other people to learn from us when I give media interviews.

2017 stock picks

Reshuffle my portfolio to match 2017 picks soon.

Stock Name

		Last Price	Change	Shares	Market Value	%	Average Cost	Per Share	Unrealized Gain	%	Day Gain	%
AEONCR	MYR	14.36	-0.02	1,000	14,360.00	14.40%	14,394.79	14.394	-34.79	-0.24%	-20.00	-0.14%
BORNOIL	MYR	0.18	0.00	38,000	6,840.00	6.86%	6,857.65	0.180	-17.65	-0.26%	0.00	0.00%
DATAPRP	MYR	0.135	0.00	40,000	5,400.00	5.41%	5,416.20	0.135	-16.20	-0.30%	0.00	0.00%
EKOVEST	MYR	2.38	+0.03	6,000	14,280.00	14.32%	14,314.68	2.385	-34.68	-0.24%	+180.00	1.28%
FLBHD	MYR	1.60	-0.01	6,000	9,600.00	9.62%	9,623.23	1.603	-23.23	-0.24%	-60.00	-0.62%
HEXZA	MYR	0.925	+0.005	5,500	5,087.50	5.10%	5,103.60	0.927	-16.10	-0.32%	+27.50	0.54%
JCBNEXT	MYR	1.70	0.00	3,000	5,100.00	5.11%	5,116.10	1.705	-16.10	-0.31%	0.00	0.00%
MMCCORP	MYR	2.33	+0.02	2,000	4,660.00	4.67%	4,674.96	2.337	-14.96	-0.32%	+40.00	0.87%
MSC	MYR	3.93	-0.01	7,500	29,475.00	29.55%	29,545.62	3.939	-70.62	-0.24%	-75.00	-0.25%
TIENWAH	MYR	1.76	-0.03	2,800	4,928.00	4.94%	4,943.05	1.765	-15.05	-0.30%	-84.00	-1.68%
$CASH					10.12	0.01%
Total					99,740.62	100.00%					+8.50	0.01%