Straco Corporation

[weijian]

The opening the Disneyland in Shanghai, expanded the entire pie - ie. it brought more tourists to Shanghai as a whole. A new Ocean Park definitely cannibalizes SOA business.

New Shanghai Ocean Park hoping to glean some of Disney’s magic and net 5 million visitors a year

Creator Haichang Ocean Park being seen as playing important role in cementing city’s plan to become a world-class tourist destination

Haichang Ocean Park Holdings, the mainland’s largest marine theme park operator, is targeting annual attendance of five million visitors at its soon-to-open venue in Shanghai, buoyed by the rising affluence of people living in the Yangtze River Delta region. Wang Xuguang, chief executive of the Hong Kong-listed company which is based in the northern Chinese city of Dalian, told South China Morning Post that estimate was based on a joint assessment with local tourism authorities on entertainment demands.

http://www.scmp.com/business/companies/a...ic-and-net

[growthinvestor]

Hi all

I have bought Straco 2 years ago because of the decent div yield and growth prospects.
However, the price has been range-bound for the past 4 years.

Is there any expansion plan in place for this company? Can't seem to find much info.

Also why some people say the fundamental not that strong? I thought it is net cash and the margins are very high compared to most other companies.

Should I continue to hold or move on to other stocks?

[chialc88]

Dear valuebuddies,
From my trading record, I first vested in Straco around Valentine day of 2017
and yes, I was attracted to it's high cash holding and high profit margin.

The technical glitch that stopped the flyer definitely cause a dent to Straco top and bottomline.
We should be able to see the damage soon.

As for the new competitor in Shanghai, I felt that it's too early to tell.
We might need another few quarters to see the impact to Straco.

Any valuebuddies visiting Shanghai do provides your trip report.

Since 2017, Straco had slowly but surely become my top 3 stocks.

Don't need to guess, MM is still the #1 despite a sharp sell down to today price of S$1.84.


Picture from Heartlandboy
link

No expansion plan is visible yet and I will continue to hold on to Straco...

[CY09]

High profit margin, strong cash flow is tied to one aspect. Business of its attractions. If straco tourist volume falls, margins fall due to fixed expense, cash flow also weakens.

It is definite straco is going to have a poor quarter year on year due to Singapore flyer. As for the other attractions, i expect revenue to be flat despite tourism growth in China. Tryingto be a prophet before the financial result release

[chialc88]

Good morning, valuebuddies.
Another brand new day had started
and I'm very glad and appreciative of all the helps from our dear valuebuddies.

Looking out of the balcony, I saw a brilliant crimson sky 
and the usual  birds singing happily in the forest.

I am well aware of the winning.
My animal instinct kick in and everything is in control
... until I think otherwise.

What's left is only the dividend and faith on Mr Wu Hsioh Kwang.
What about the rest?
Increasing tourist in Shanghai? I thought a new attraction is opening up which will impact SOA?
Reducing ticket price of SOE operated attractions? This is real, right?

So, it's only Mr Wu and dividend, right?
link

[thor666]

Just a sharing and not any advice to buy or sell.

I bought in to Straco a few years back at just under 40 cents. Saw the meteoric raise of the stock as it posted growth and net cash company.

Before the AGM.. News also came out that Disneyland Shanghai was coming up (I think it didn't until 2 yrs later). This was queried during the AGM by a shareholder. CEO did not attend as he was in China on business meeting, so the board answered. One of the independent directors said (and I paraphrase) that the tourist attraction business was a no-brainer.

Straco continued to rise and I offloaded below 70 cents. Just did not feel comfortable to hold anymore. On hindsight, I could have held longer. But no regrets as I was naive to investing. This was not the case when I held on to Osim until it delisted.

My learning pt was that the qualitative analysis was as important as the quantitative, especially in Asian investing context.

I wish the best of luck for Valuebuddy shareholders of Straco. Perhaps there are still some way to go even in the face of intense competition.

Sent from my ONEPLUS A5000 using Tapatalk

[edragon]

There were real concerns of crowd control as serious accidents have happened.
The population of China coupled with tourists is overwhelming and NOT underwhelming.

Food for thoughts!

[growthinvestor]

Dear valuebuddies,
From my trading record, I first vested in Straco around Valentine day of 2017
and yes, I was attracted to it's high cash holding and high profit margin.

The technical glitch that stopped the flyer definitely cause a dent to Straco top and bottomline.
We should be able to see the damage soon.

As for the new competitor in Shanghai, I felt that it's too early to tell.
We might need another few quarters to see the impact to Straco.

Any valuebuddies visiting Shanghai do provides your trip report.

Since 2017, Straco had slowly but surely become my top 3 stocks.

Don't need to guess, MM is still the #1 despite a sharp sell down to today price of S$1.84.


Picture from Heartlandboy
link

No expansion plan is visible yet and I will continue to hold on to Straco...

have you been to their AGM before and ask what's the next growth plan?

With the cash hoard, surely they are planning their next move. Or are they waiting for the Flyer's debt to go down lower first?

It seems the next announcement on growth will bring up the stock price.

[sykn]

Just a sharing and not any advice to buy or sell.

I bought in to Straco a few years back at just under 40 cents. Saw the meteoric raise of the stock as it posted growth and net cash company.

Before the AGM.. News also came out that Disneyland Shanghai was coming up (I think it didn't until 2 yrs later). This was queried during the AGM by a shareholder. CEO did not attend as he was in China on business meeting, so the board answered. One of the independent directors said (and I paraphrase) that the tourist attraction business was a no-brainer.

Straco continued to rise and I offloaded below 70 cents. Just did not feel comfortable to hold anymore. On hindsight, I could have held longer. But no regrets as I was naive to investing. This was not the case when I held on to Osim until it delisted.

My learning pt was that the qualitative analysis was as important as the quantitative, especially in Asian investing context.

Sent from my ONEPLUS A5000 using Tapatalk

Thanks for the sharing, thor666.

I had a bad experience with OSIM, because I bought in when the share price was already quite high, then came the plunge. But I held on because the ROE was very high and because I thought China is a huge market and there is still plenty of runway. What I failed to notice was that the combination of low price and very large cash horde meant that the majority owner can just take a huge loan to buy us out, and then use the cash horde to pay back his loan money. My bad, but the OSIM investment taught me a few lessons.

With Straco, I cannot rule out this possibility, because there is a cash horde building up, and if share price drops substantially, owner has the option to do an OSIM (not to say that he definitely will) on small fries like us. Also, my fundamentals analysis of Straco's business gives me an intrinsic value of around $1.00, which means that compared to the current share price, I don't have 50% margin of safety. So these 2 things taken together means that I must be cautious with this investment and not put all my eggs in the one basket.

Just my 2 cents worth of views.

[thor666]

Thanks for the sharing, thor666.

I had a bad experience with OSIM, because I bought in when the share price was already quite high, then came the plunge. But I held on because the ROE was very high and because I thought China is a huge market and there is still plenty of runway. What I failed to notice was that the combination of low price and very large cash horde meant that the majority owner can just take a huge loan to buy us out, and then use the cash horde to pay back his loan money. My bad, but the OSIM investment taught me a few lessons.

With Straco, I cannot rule out this possibility, because there is a cash horde building up, and if share price drops substantially, owner has the option to do an OSIM (not to say that he definitely will) on small fries like us. Also, my fundamentals analysis of Straco's business gives me an intrinsic value of around $1.00, which means that compared to the current share price, I don't have 50% margin of safety. So these 2 things taken together means that I must be cautious with this investment and not put all my eggs in the one basket.

Just my 2 cents worth of views.

I had bought in to Osim too. My takeaway is that the qualitative analysis (mgmt walking the talk and aligning to shareholder interests) is as important as the quantitative.

The unfortunate reality is that SGX as a small stock exchange have to keep their listing regulations loose, which encourage listed companies arranging in favor of the management over shareholder rights.

Agreed that balancing the investments is ultimately key to protecting our portfolio.

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