Hengyuan falls more than 14pct on heavy profit-taking

KUALA LUMPUR: Hengyuan Refining Company Bhd's share price plummeted more than 14 percent to RM3.70 by 3pm on Wednesday, as a result of significant profit-taking that followed a fourfold increase in its stock price year-to-date. During morning trading, the equity experienced a steep decline of nearly 20 percent, dropping from RM4.25 to RM3.40, triggering an automatic suspension of intraday short selling on Bursa Malaysia.

The stock was the 18th most traded on Bursa Malaysia that day, with 19.3 million shares changing hands as of 3:49pm.

Hengyuan's share price had risen from RM1.04 on June 30 to RM4.54 on September 24, but since then, the counter has lost approximately 19 percent of its value, with today's plunge being the steepest. The initial momentum in Hengyuan's shares was driven by a notable earnings recovery in the first half of the financial year ending December 31, 2026, a new ten-year product supply deal with Shell Malaysia, and the reinstatement of dividend payments.

Petroleum refining industry sentiment had begun to improve as concerns over supply bottlenecks subsided due to recovering crude oil export volumes from the Middle East. Additionally, the US administration's decision to release more oil from strategic reserves and diplomatic efforts aimed at resolving the ongoing US-Iran conflict contributed to the positive sentiment.

However, crude oil prices weakened today, with Brent crude oil falling nearly one percent to around US$95 per barrel, and West Texas Intermediate trading around US$89 per barrel, down 0.5 percent from the previous closing price. The decline in crude oil prices also affected Petron Malaysia Refining & Marketing Bhd, with its share price falling 5.62 percent to RM3.36 by 3:26pm, reflecting concerns over the company's margins and the overall outlook for the oil sector.

Petronas Chemicals Group Bhd also experienced a decline, dropping by 12 sen or 2.8 percent to RM4.17.