Straco Corporation

[Stockerman]

But the key question is how much more visitors can physically squeeze into the 2 aquariums? Already, there were people complaining how crammed it is..

How much more upside? it isn't going to be double or tripe..

Straco's adjusted pre-tax margin in the first half of 2013 was a whopping 52%, 7 percentage point higher than the same period of the prior year:

.................................1H 2013....1H 2012.....increment
Revenue ($m)............. 27.70........ 22.83..........4.87
Pre-tax profit ($m)........19.05.........11.52..........7.53
Adjusted for other
income & forex.............14.36.........10.26...........4.10
Adjusted margin............52%...........45%...........7 ppt

This should not come as a surprise as the marginal cost of admitting a visitor to its attractions is insignificant --- practically all of the $4.87m revenue increment in the first half flowed to the adjusted pre-tax profit, raising it by $4.1m.

The adjusted pre-tax margin in 2H 2012 was 53%:

Revenue ($m)........................32.43
Pre-tax profit ($m)..................18.57
Adjusted for other
income & forex.......................17.28
Adjusted margin......................53%

Margin in the second half of the current year ought to be higher if the attractions have space for more visitors during peak periods.

[momoeagle]

Just thought it would be good to list down the corresponding TripAdvisor sites too

http://www.tripadvisor.com.sg/Attraction...nghai.html
http://www.tripadvisor.com.sg/Attraction...ujian.html

[l0nEr]

Just thought it would be good to list down the corresponding TripAdvisor sites too

http://www.tripadvisor.com.sg/Attraction...nghai.html
http://www.tripadvisor.com.sg/Attraction...ujian.html

lol. looks like very mixed reviews.

The first review i saw says... "a rip off" for 90RMB.
Sounds better to be a shareholder instead. haha i probably wouldnt pay to visit either.

[l0nEr]

noticed this is the only 'semi' s-chip that wasnt wacked down together with the rest of the s-chips.

[Nick]

The Board of Directors of Straco Corporation Limited (the Company) wishes to inform that the Company will be releasing the financial results of the Company and the Group for the third quarter and the 9 months ended 30 September 2013 on Tuesday, 12 November 2013 after trading hours.

Straco closed at an all time high of 40.5 cents. 3Q is generally the 'loaded' quarter of the year in terms of revenue.

(Vested)

[Nick]

Straco reports strong growth in revenue and earnings for Q3

• Cumulative revenue grew 31.9% to $58.21 million
• Cumulative net profit surged 71.7% to $28.47 million
• Strong cash balance of $101.15 million

http://straco.listedcompany.com/newsroom...1972.1.pdf [SGX Announcement]

http://straco.listedcompany.com/newsroom...1972.2.pdf [Press Release]

Pretty solid results and looks likely to make record profits again. The potentially exciting news would be the $21.2 million deposit paid for bidding of a project. It also received $2.1 million paid from a potential partner for bidding of a project. Looks like a 90:10 JV ? No details on the bid or the project were given. This doesn't mean M&A is likely or confirmed but if it takes place, it would be a very exciting development for the Group considering their large cash pile exceeding $120 million (including the deposit).

(Vested)

[Nick]

Straco Corporation and its Executive Chairman, Mr Wu Hsioh Kwang conferred Top 10 ASEAN Enterprises Entering China Award and Outstanding ASEAN Entrepreneurs Award by China-ASEAN Business Council respectively

http://infopub.sgx.com/FileOpen/MediaRel...eID=270131

(Vested)

[Nick]

CIMB has initiated coverage on Straco Corporation with a report title 'Riding China’s tourism boom' and TP of $0.60.

http://research.cimb.com/index.php?ch=50...57&bb=file [Report]

(Vested)

[Nick]

Straco reports strong growth in revenue and earnings

• Cumulative revenue grew 32% to $72.8 million
• Cumulative net profit surged 72.8% to $34.1 million
• Debt free since 2008
• Operating cash flow of $35.7 million generated
• Proposed first and final dividend of 1.25 cent per share + special dividend of 0.75 cent per share

http://infopub.sgx.com/FileOpen/MediaRel...eID=277118 [Press Release]

http://infopub.sgx.com/FileOpen/Straco4Q...eID=277117 [SGX Announcement]

Truly outstanding set of results ! The Group generated strong growth in operational statistics like visitor numbers (up 10 - 33% for all assets) and financial figures such as revenue (up 32%) and margins. The Group generated record high FCF exceeding $36 million which translates to 4.2 cents / share. Unfortunately, no details was given on the progress of the tender for the project they are bidding for in Asia. According to the CIMB report, this project is valued > $100 million highlighting the potential for inorganic growth in the future assuming it is secured. Net cash (including deposit) was close to $130 million. The Group has kept to its track record of raising dividends annually and the current 2 cents proposed translates to a dividend yield exceeding 4%.

(Vested)

[Nick]

Straco Corporation
Capturing operational efficiencies
STCO SP / STRA.SI | ADD - Maintained | S$0.49 - TP: S$0.61
Mkt.Cap: US$323.00m | Avg.Daily Vol: US$0.04m | Free Float: 18.10%
Lifestyles | Author(s): Jessalynn CHEN +65 62108672, Kenneth NG, CFA

Straco’s FY13 net profit of S$34.1m came in above our expectation, forming 105% of our forecast. The robust results came on the back of strong contributions from the aquarium segment, especially from the Shanghai Ocean Aquarium (SOA). With a record number of visitor arrivals at its aquariums, Straco managed to capture operational efficiencies and saw an expansion in margins. We maintain our Add rating, with a slightly higher DCF-based target price of S$0.61 after raising our FY14-15 EPS by 7% to account for stronger revenue and higher margins. The potential catalysts are rising domestic consumption and demand for tourism in China.

FY13 overview
FY13 revenue of S$72.8m grew by 32% yoy on the back of 23% yoy growth in total visitor arrivals at its two aquariums, which reached a record high of 3m. The visitor growth was driven largely by SOA, which has a larger proportion of higher-yielding customers and a higher average ticket price. With the strong visitor arrivals, Straco managed to capture operational efficiencies as operating expenses grew at a slower pace of 4.5% yoy, while administrative expenses contracted 18.6% yoy. The controlled cost growth was possible as c.80% of Straco’s operating expenses are comprised of fixed costs. As a result, net profit grew by 73% yoy to S$34.1m, with net margin rising to 46.8% from 35.7% in FY12.

Attractive dividend yield
In view of the strong results, the board has recommended a final DPS of 1.25 Scts and a special DPS of 0.75 Scts, bringing the total DPS to 2 Scts. This is up from 1.25 Scts in FY12, and represents a dividend yield of 4.1%. While Straco does not have a fixed dividend policy, we expect the group to continue paying out dividends given the ample cash on its balance sheet.

We maintain an Add rating
At its current valuation of 11.2x CY15 P/E, we believe that the stock is still cheap relative to peers in the tourism industry that trade above 20x forward P/E. We continue to like Straco for its strong cashflow generation and low maintenance capex requirements. We expect it to benefit from the rising demand for domestic tourism in China as the government introduces new incentives to promote domestic consumption and travel.

https://brokingrfs.cimb.com/zn58oG-OXRhr...16Ex41.pdf [Report]

(Vested)