Straco Corporation

(28-02-2018, 06:52 PM)CY09 Wrote: http://infopub.sgx.com/FileOpen/Straco4Q...eID=490806

Straco has delivered a respectable full year results of EPS 5.55 cents and dividends of 2.5 cents. With a strong cashflow generation of about 7 cents per financial year, this is quite a decent company to invest in at it's current share price of 83 cents.

However with the Singapore Flyer still suspended till now, I believe this year's results will be affected by about a 1mil decline; however dividends are unlikely to be affected because of a large cash buffer and cash generation from other attractions.

2.5/83 is what 3% yield? Doesn't look that attractive at all as a dividend play. Might as well buy Singtel with >5% div yield at current $3.36 price?

(11-03-2018, 09:48 PM)BlueKelah Wrote:

(28-02-2018, 06:52 PM)CY09 Wrote: http://infopub.sgx.com/FileOpen/Straco4Q...eID=490806

Straco has delivered a respectable full year results of EPS 5.55 cents and dividends of 2.5 cents. With a strong cashflow generation of about 7 cents per financial year, this is quite a decent company to invest in at it's current share price of 83 cents.

However with the Singapore Flyer still suspended till now, I believe this year's results will be affected by about a 1mil decline; however dividends are unlikely to be affected because of a large cash buffer and cash generation from other attractions.

2.5/83 is what 3% yield? Doesn't look that attractive at all as a dividend play. Might as well buy a no brainer blue chip like Singtel with >5% div yield at current $3.36 price? Now that at least looks more decent.

The sustainability of dividends lies in two aspects: i) The fundamental of the underlying business and ii) Payout ratio.

Measuring purely out of dividend yield is not a good gauge. While Singtel indeed has a 5% yield, it has a dividend payout ratio of 70% and weaker business fundamentals. Straco has a lower payout ratio of 45% and also a business whose fundamentals is not that strong. 

It is up to us investors to judge whose dividend sustainable.

(11-03-2018, 09:59 PM)CY09 Wrote:

(11-03-2018, 09:48 PM)BlueKelah Wrote:

(28-02-2018, 06:52 PM)CY09 Wrote: http://infopub.sgx.com/FileOpen/Straco4Q...eID=490806

Straco has delivered a respectable full year results of EPS 5.55 cents and dividends of 2.5 cents. With a strong cashflow generation of about 7 cents per financial year, this is quite a decent company to invest in at it's current share price of 83 cents.

However with the Singapore Flyer still suspended till now, I believe this year's results will be affected by about a 1mil decline; however dividends are unlikely to be affected because of a large cash buffer and cash generation from other attractions.

2.5/83 is what 3% yield? Doesn't look that attractive at all as a dividend play. Might as well buy a no brainer blue chip like Singtel with >5% div yield at current $3.36 price? Now that at least looks more decent.

The sustainability of dividends lies in two aspects: i) The fundamental of the underlying business and ii) Payout ratio.

Measuring purely out of dividend yield is not a good gauge. While Singtel indeed has a 5% yield, it has a dividend payout ratio of 70% and weaker business fundamentals. Straco has a lower payout ratio of 45% and also a business whose fundamentals is not that strong. 

It is up to us investors to judge whose dividend sustainable.

That's right, but  I reckon the blue chip big caps like Singtel or ST Engineering(yield 4%+ now) has a much bigger moat than Straco and in the longer run if you are looking at div sustainability and growth is hard to argue against vs Straco which is not even hit 1B market cap yet. What if suddenly another black swan event happen in China side aquarium, like the Singapore Flyer suspended also unexpected and seems taking long time to fix?

Even in similar market cap class, stock like Vicom has much more attractive high yield at the moment ( i am seeing 5%+ ) and dun tell me ViCOM dividend is not sustainable or has weak business fundamentals . 

Straco has in past few years probably overshot being on a rally after buying Singapore Flyer. It is very possible for the price to go back to pre-flyer 60c levels in the coming months, especially if mgt. decided to cut dividend in any way.

For the Spore Flyer shutdown, is there any insurance coverage or claim from supplier? Anyone knows? Thanks.

These state owned tourist attractions are competing with Straco's Shanghai Aquarium and Underwater Xiamen - both in terms of attraction and venue (eg. Shanghai/Xiamen). Reducing prices from your competitors definitely doesn't help from an individual attraction standpoint, or from a city overall attractiveness viewpoint.

China’s top tourist attractions to dangle cheaper tickets

Paying as much as US$95 to see the country’s top attractions may be a thing of the past after premier vows to cut ticket prices

http://www.scmp.com/news/china/society/a...ttractions

(13-03-2018, 12:51 PM)weijian Wrote: These state owned tourist attractions are competing with Straco's Shanghai Aquarium and Underwater Xiamen - both in terms of attraction and venue (eg. Shanghai/Xiamen). Reducing prices from your competitors definitely doesn't help from an individual attraction standpoint, or from a city overall attractiveness viewpoint.

China’s top tourist attractions to dangle cheaper tickets

Paying as much as US$95 to see the country’s top attractions may be a thing of the past after premier vows to cut ticket prices

http://www.scmp.com/news/china/society/a...ttractions

The state owned companies can afford to operate at a loss for years but not  Straco .

Businesses at the Flyer have been hit badly since its closure on Jan 25.

http://www.straitstimes.com/singapore/si...tor=CS1-10

Many tourists are quite ignorant of the prices they pay for attractions. What is more important when valuing a company operating attractions; is how far up are they in the "to do" list for tourists visiting a city.

I am very interested to see the financial results of Straco this FY. Its main attractions of Aquarium in China have been eclipsed by bigger and more variety-like aquariums/water parks. IMO, these 2 aquariums are walking down the path of our old underwater world. If one could recall in the early 90s, Underwater World were the top few attractions besides Botanic Gardens, the zoo, Haw Par Villa and Orchard Road. Fast forward in 2010s, Two of the these top have been replaced and are perhaps unranked.

The only way for Straco is to build a bigger and more impressive aquarium which will incur a CAPEX of at least 100 mil (based on how much the largest aquarium in China cost). These attractions do not carry any historical and cultural value and thus will be obsolete with the flow of time. Straco is not like the conglomerate, the Haw Par group. Straco is only in tourism.

With Straco's strong balance sheet, it is likely dividends will be maintained; but with a potential fall in EPS, Straco may have to command a lower valuation. The Singapore Observation Wheel was to be a growth driver but the wheels seems to have come off.

(17-03-2018, 08:10 AM)CY09 Wrote: Many tourists are quite ignorant of the prices they pay for attractions. What is more important when valuing a company operating attractions; is how far up are they in the "to do" list for tourists visiting a city.

I am very interested to see the financial results of Straco this FY. Its main attractions of Aquarium in China have been eclipsed by bigger and more variety-like aquariums/water parks. IMO, these 2 aquariums are walking down the path of our old underwater world. If one could recall in the early 90s, Underwater World were the top few attractions besides Botanic Gardens, the zoo, Haw Par Villa and Orchard Road. Fast forward in 2010s, Two of the these top have been replaced and are perhaps unranked.

The only way for Straco is to build a bigger and more impressive aquarium which will incur a CAPEX of at least 100 mil (based on how much the largest aquarium in China cost). These attractions do not carry any historical and cultural value and thus will be obsolete with the flow of time. Straco is not like the conglomerate, the Haw Par group. Straco is only in tourism.

With Straco's strong balance sheet, it is likely dividends will be maintained; but with a potential fall in EPS, Straco may have to command a lower valuation. The Singapore Observation Wheel was to be a growth driver but the wheels seems to have come off.

It's actually quite strange it's taking so long to fix.  Given its been months,  likely the main engine blew a valve or piston or whatever is in the big engine that powers it. So Straco may have to order a new engine (may have to wait many months/year?), or take apart the engine to replace the internal part(likely to take a few months too). Will they be able to do that without taking apart the wheel?

Have any Straco investors here actually done the leg work and been down to the Singapore Flyer to investigate if any engineers are working on the wheel? Or is it just shut down and getting cleaned but nothing is actually being fixed? Straco should actually be transparent and issue a more detailed statement as to what they are fixing and the estimated delay and cost of repairs.

Singapore Flyer to resume operations after two-month hiatus LINK