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DBS Vickers Valuations
Revised assumptions and upgraded earnings forecast.
To reflect the strong refining margin, we upgraded SPC?s refining margin assumptions for 2007-08 from US$5.25/bbl and US$4.7/bbl to US$5.5/bbl and US$5.0/bbl, respectively. We also upgraded our Brent crude oil price assumptions from US$59/bbl and US$50/bbl for 2007-08 to US$63/bbl and US$60/bbl, respectively. Subsequently, we upgraded FY07-08F net profit by 5% and 10%, respectively.
Upward revision of target price.
Following the upgraded assumptions, we raised our target price from S$5.20 to S$6.0, based on sum-of-parts valuations. We value upstream E&P projects by DCF method and downstream refinery by PE multiples method. Our new target price is based on 8.0x 2008 PE, from 7.5x 2007 PE previously. SPC?s 8.0x PE is lower than 8.5x we apply to Rayong Refinery (RRC TB, Buy) and 9.5x for Thai Oil (TOP TB, Fully Valued). This is to reflect RRC and TOP?s better earnings growth prospect. While SPC?s refining capacity will likely be flat, TOP?s refining capacity will expand by 22% by the end of 2007 and RRC?s will increase by 45% by 3Q08.
Undemanding valuations, upgraded to Hold.
At 8.1x 2007 and 5.6x EV/EBITDA, SPC?s valuations are not at all demanding when compared to regional refinery peers? (ex-Japan) of 9.7x and 6.9x, respectively. We recommend HOLD on SPC for its attractive dividend yield of 6.2% and potential upside surprise from hurricane season in 3Q07.
DBS Vickers
UPGRADE SPC.
Livermore is back for the party! Welcome back. We did not leave!
007... I am not ready to sell yet. What if I exit and wait at the side line but SPC did not look back? I intend to ride thru the ups and downs with all of you as far as SPC fundamental does not change overnight. I am not a TA guy, not god, cannot predict accurately. Like what $$$ said, "LOCK IT UP". Who knows Chevron decided tomorrow to accquire all SPC share that they did not own...hahaha!
Yes... 'lock it up' for your grandchildren... 
For oil related stocks, hold "FOREVER"
Is Oil's Next Stop US$85?Thursday July 5, 7:50 am ET
Jim Kingsland submits: Back on February 25th I made this
post: Get Ready for $70 Per Barrel Oil Again. Okay, so every so often I get something right.
The real lesson in this is that worldwide supply versus demand is the key issue. We do not live in an energy vacuum.
These two pictures tell why crude oil will soon take out the all time high in the $78 range and move higher from there over the next several months:
The above charts are from the IEA which doesn't even have a complete grasp on world oil demand because of unreliable data from emerging nations, especially China.
Today, we will get another batch of U.S. energy data. If you're keeping track, a Reuters survey of analysts shows an expected 100,000 barrels rise in distillate stocks, and a 300,000 barrels increase in gasoline when the figures are released at today at 10:30 ET.
Talking about the over abundance of paper barrels versus real barrels in Cushing, OK makes for good fun, along with how much is sloshing around in Cushing these days, but the real deal is in the demand for energy globally, and the output. Throw in stress in downstream refining, and it's a recipe for little relief at the pump. Prices are supposed to come down as summer draws to a close, but I can just hear it now - they didn't make enough home heating oil.
It must be so nice to be an oil company. Can I start one? Oil 2.0?
Finished products are now fetching $30/bbl over crude vs around $10 last year. That's the definition for 'minting money.'
Hmm so old timer like 168 is getting ready to sell to $6....dun be so concern with my forecast. I just use them as reference and look at a few considerations to weigh the risk of lost against gain before deciding on the action required. For instance if I should start exiting and averaging down or vice versa.
SPC's TA charts look pretty bullish now. Acc/Dist and Chaikin both up
That is why "investing" is actually "risking-taking"...
If one take it as purely investing, then one would have plunged all one's money into it, since
chances of making would be good if one really treats it as an "investment".
But in practice, it is more a risk than an "investment", though it may well be both over a decade or more.
First, one can suffer a "market meltdown" even on a fine, sunny day. Then one may also frustratingly find one's stock falling and falling slowly over a period of time while one thinks of the lost interest that could have been earned with the big money one has plunged in.
Taking a very big risk then becomes no different from gambling...
The human emotion part of stock mkt is that lots of ppl will use easy number to guide themselve for a target price, eg, $4, $5, $6, before making a decision to sell. So I am anticipating that most of the long/mid/short term investors & traders will cling on to $5.85-$6.00 till it crosses that $6 mark. Once hit, lots of seller will surface. SPC might not cross the $6.10 mark before nose dive back to $5.80 region to find its base. If any of you still remember when SPC was at $4.94 about to cross the $5.00 mark, lots of buyers. And when it crossed $5.00, it went up a notch to $5.05 before heading south to $4.82 (of course it coincide with the XD date). Then it went lower to $4.7X bcos the sentiment was low then. It was that period that SPC formed that base and charge forward above $5 and did not look back then. I do strongly believe that these time round, it will be no diff with the $6.00 mark. In order to hit $7.00, it will have a lot of volatile sessions, and this time it will be harder as compared to the period of $4.00-$5.00. That was because SPC was "undervalue" at $4+. Now SPC is almost at "fair value", we would not see too many willing buyers. All of them will scared to die also lah! So it will be a long long wait for it to reach $8.00, lets not talk about $10.00...hehehe!!! Lets bring this up when we cross the bridge. Its very scary you know!
Still sticking to my 5,6,7 forecast
, so by end July it should be $7 and not $6. If we can get all the planets in the solar system to align, SPC can reach $10 before end 2007.
007...$5.95 was very close. Try again tomorrow! Hope it's like what you said, $6.00 is imminent before 25/7.
Can see that the BBs are in liao. Ready for the ride now!...Veteran Chinkaisu, give me any post will do, lamp post also can...hehehe!
hey people, 5.90 breaking soon...moving towards 5.95
ho seh liao !!!
btw.. idesa168, I value your posts so you actually deserve your senior position, if not in TA skills at least in the way you write so maturely... but he he, if you really like the idea of being called a member.. I can help you by giving a bad posts to all your post and reduce your score...
waa... so rich !!!...
maybe it's Geojam!
$5.85 for 50 lots is $290K, dun look like a retail investor to me. To give a benefit of doubts, we have report coming out that millionaire in SG is on the rise...lol! Thanks 007, cheers!
168, 50 lots are probably just those people who got deeper pocket or margin players. Cannot consider BBs.
