Hengyuan - does price follows fundamentals?

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For those thinking about investing in Hengyean Refining Co, the chart below shows some interesting patterns. I have compared the past 9 years share price (top chart) with the ROE (bottom chart).

You could say that price follows fundamentals in the long run. 
So unless you expect some jump in ROE in the coming year, you must ask why the stock price will move up. Of course this is looking at this from the fundamental perspective. If you are thinking of the "goreng" market, it is a different story

The other takeaway is that the ROE of the refinery does not seem to have improved with higher oil prices. 

[Image: HengYuan.png]

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