CHI - Channel Infrastructure Ltd (NZR)

[Hoop]

thanks hoop...crickey if the fundamentals and TA both have a green light we are destined to test $3 soon.

Yeah...The rectangle pattern break today gives a TA target of $3.04...TA target prices are not resistances they are a rule of thumb mathematical lines in the sand which say that there's a 70% chance NZR will reach this price..

Resistances alter the probability and TA target and Fibonacci boffins will no doubt apply all sorts of complicated formulaes to exact a more "effective" probability figure.

I like to apply the KISS method... In NZR case there is an old historic resistance at $2.90 and another larger historic resistance at $3.20 ..so TA target of $3.04 looks 70% obtainable.

[dodgy]

Settle down you two - Snapiti and Hoop,
Be happy with my guesstimate and ecstatic if I am light.
Regards
-dodgy (owner/shareholder - forever hopeful with this one)

[dodgy]

sorry dodgy here's more good news for you....latest weekly report on Singapore refinery margins shows we are still close to the high's of the year.
Report issued 2 days ago.....page 6
page 8 also shows the Brent -WTI differentials remain very low which is very very good for NZR
http://www.howardweil.com/docs/Repor...NINGReport.pdf

Hi snapiti
Thanks for that - appreciated. Without your reference I would be still be looking with no experience in this area. If I am too slim come March 2016 I will deserve a good whacking with a wet fish.

Have a good weekend
-d

[dodgy]

hope you are to slim then you can get whacked with crayfish and oysters.
I could be a few months early with my $3.90 by march 2016 call as divi's won't start up again until mid 2016 unless they give us a token small one to celebrate an incredible turn around at full year 2015 due Feb 2016.
Reinstating divi will find many keen investors especially if interest rates are still low.
Happy to stick with the call and looking forward to 40-45c EPS for full year 2015.

Sounds good to me snapiti.
Div a cert for Feb 16 then share price ramp up.
-d

[bull....]

What a week - as hoop nice chart mentioned breakout of the long term downtrend has occurred this week which will encourage long holders to enter ( I mentioned a while back about the consolidation occurring so now this has broken to the upside as well which gives a short term price target of 2.90 which by the way is the 23.3% fib retracement level, it by no means alters the long term trend it is only a short term target.)

As for fundamentals - as of april they had 264m debt and had paid of 50m in 4mths so im picking 175m - 197m of debt at yr end which equates to a gearing of just over 20% this could be even better if throughputs run at max all yr.
Margins remain high so should be on course for max profits potential this yr so divs starting mid 2016 is my pick.

As snapiti says it is cheap if things stay as is now the falling dollar is insurance against the margins falling as well.

2015 yr 145m profit, 175m - 197m debt no divs going forward the next 2 yrs opens up the possibility of huge divs esp 2017 my pick based on current environment over 50c/share possible on a over 90% payout ratio

of course it can all change at a moments notice due to the many varibles but the stars certainly seemed aligned at the moment.

[Crackity]

The Company’s return to profitability represents aremarkable turnaround in 12 months. However, we areconscious that year-end borrowings have pushed gearingto 33% when our targeted ratio, outlined in the Company’sdividend policy, is 10-20%

From the 2014 annual report - as noted Bull the pay down of debt so far this year has been exceptional. I'm picking no interim for the 2015 year but I am going to stick my neck out and forecast 5 to 10 cps for the final div assuming the current operational performance stays the same....expecting a nice cheque early 2016

[dodgy]

Snaps
I have only ever guestimated a March16 div as a few cents . And that will do just fine - any more "fab".
-d

[dodgy]

heres a great link to show the historic price spread between WTI and BRENT.
Page 12 shows quarterly diff since 2010.
note how high they were till mid 2014.

http://www.howardweil.com/docs/Repor...acroUpdate.pdf

Me thinks with the spread at about $4 and our $ at 68 they might need a bigger vault for all the profits.

Goodafternoon snapiti and all,
I must be one confused soul ! My understanding is that NZR does not purchase any feedstock but is purely a tolling operation. Oil purchases being the responsibility of the end user with the only accrued advantage being to the end user because with lower input costs stored product, ie capital tied up, is reduced (the cost of funding the product). NZR gains mainly from exchange rates and refining margins. Maybe they also charge storage on site.
Am I correct or what is the answer?
Regards
- dodgy (owner/shareholder - no longer accumulating - holding for the appreciation and dividend stream).

[cdonald]

Dodgy, you are correct. NZR is a tolling refinery. To my knowledge they dont charge for storage (being that everything they have there is to be processed for the toll fee). They do make considerable income from the RAP (Refinery Auckland Pipeline). 30% of the Singapore complex refining margin is retained by the "users" to compensate for the fact that they bear the cost of the inventory.

The press releases from the refinery are somewhat confusing for most of us when they start talking about the spread between Dubai and Brent (snapti I am not too sure why you have posted the link to WTI vs Brent). To the best of my knowledge (which is a bit hazy these days) I think that the Singapore complex refinery margin (the benchmark) is priced of a crude basket based on Dubai pricing. The advantage that the NZR has is 40% of its feedstock is based of crudes that use Brent oil as a marker. Dont get confused though, the refinery does not put brent crude thru its units, it is merely a marker crude ie a crude that other ones are priced against.

So when the refinery talks about the dubai/brent differential they are only doing this to justify an uplift over the singapore complex refining margins.

Some links for reading
https://www.argusmedia.com/Methodolo...es/Dubai-Crude

[cdonald]

Very good post cdonald
Yes you are right NZR does not buy the oil.
You are also right about the Dubai Brent spread and the only reason I use WTI is I can not find any info that keeps us up to date with the spread price between Dubai and Brent plus the fact that the price of Dubai and WTI are very correlated.
Please post a link that shows the spread between Dubai and WTI if anyone can find one.
It can all be a bit hazy but if you follow the spread price plus the Singapore crack price you will get a fair idea of the margins NZR are currently getting and well ahead of their through put announcements.
Just out today the report on last weeks Singapore margins

http://www.howardweil.com/docs/Repor...NINGReport.pdf

Bottom of page 6 shows the margins are still extremely healthy.

yup, margins still appear to be doing pretty well so we should have 6 great months under the belt and the prospect of early start up of the project too.

will do a bit more digging around in regards to the chart for dubai/brent but here is a starting point if someone has got some time to go searching

http://www.cmegroup.com/trading/ener...p-futures.html