This article first appeared in The Edge Financial Daily on December 5, 2017

Hengyuan Refining Company Bhd (+ve)
SHARES in Hengyuan Refining Company Bhd (fundamental: 1.4/3, valuation: 1.2/3) triggered our momentum algorithm for the first time this month and fifth time this year yesterday. The stock closed up 90 sen or 8.55% at RM11.42sen, after 5.02 million shares were traded.

Hengyuan returned to the black in the third quarter ended Sept 30, 2017 with a net profit of RM361.78 million, versus a net loss of RM80.86 million a year ago, helped by better refining margins. Quarterly revenue rose 50.9% year-on-year (y-o-y) from RM1.96 billion to RM2.96 billion. As for the cumulative nine months of FY17, the group reported a net profit of RM725.67 million, rising 5.6 times y-o-y from RM127.46 million, as average refining margin doubled to US$8 (RM32.56) per barrel from US$4 per barrel.

Revenue grew 46% y-o-y to RM8.49 billion from RM5.83 billion, helped by higher average product market prices at US$63.50 per barrel, against US$48.80 per barrel last year.