Straco Corporation

[Contrarian]

There are only 2 busy weeks in May. And probably 2-3 weeks packed to the brim for the aquarium in Oct.

[Nick]

Straco reports 30% growth in revenue for 1Q

• 1Q revenue grew 29.5% to $14.66 million
• Strong cash balance of $106.8 million
• Debt free since 2008

http://straco.listedcompany.com/newsroom...DXBA.1.pdf [Financials]

http://straco.listedcompany.com/newsroom...DXBA.2.pdf [Media Release]

1) Revenue up 30% on the back of 22% increase in visitor numbers in the 2 aquariums in the usual quiet 1Q. Growth will come from increasing utilization in non-peak periods.

2) NPAT was flat. However, excluding the one off disposal of land use rights gain in 1Q 2013, PBT would have increased by 15%.

3) Due to the sharply appreciating SGD / RMB this year, Straco incurred $1.0 million forex loss in 1Q 14 as opposed to $0.61 million forex gain in 1Q 13. Excluding both items, NPAT would have risen 45%. Personally, forex movement is a real and recurring issue so I won't exclude it. The RMB/SGD rates moved 3.1% in 1Q 14.

4) 2Q and 3Q are where the bulk of the profits are generated. So it is difficult to simply extrapolate 1Q growth going forward. No news on AEI or the MOU. Management outlook remains bullish.

5) Balance sheet remains strong with $128 million cash (including its deposit for the project) and 0 debt. This works out to 15 cents / share. I expect a higher dividend this year unless M&A is carried out.

Any thoughts on the latest results ?

(Vested)

[Gregg]

Straco reports 30% growth in revenue for 1Q

• 1Q revenue grew 29.5% to $14.66 million
• Strong cash balance of $106.8 million
• Debt free since 2008

http://straco.listedcompany.com/newsroom...DXBA.1.pdf [Financials]

http://straco.listedcompany.com/newsroom...DXBA.2.pdf [Media Release]

1) Revenue up 30% on the back of 22% increase in visitor numbers in the 2 aquariums in the usual quiet 1Q. Growth will come from increasing utilization in non-peak periods.

2) NPAT was flat. However, excluding the one off disposal of land use rights gain in 1Q 2013, PBT would have increased by 15%.

3) Due to the sharply appreciating SGD / RMB this year, Straco incurred $1.0 million forex loss in 1Q 14 as opposed to $0.61 million forex gain in 1Q 13. Excluding both items, NPAT would have risen 45%. Personally, forex movement is a real and recurring issue so I won't exclude it. The RMB/SGD rates moved 3.1% in 1Q 14.

4) 2Q and 3Q are where the bulk of the profits are generated. So it is difficult to simply extrapolate 1Q growth going forward. No news on AEI or the MOU. Management outlook remains bullish.

5) Balance sheet remains strong with $128 million cash (including its deposit for the project) and 0 debt. This works out to 15 cents / share. I expect a higher dividend this year unless M&A is carried out.

Any thoughts on the latest results ?

(Vested)

Hi nick

Looking at the sgd:rmb currency trend
2014 Q1 4.75-4.95
2013 Q1 5.05-4.90

Using mobile phone to look at the Google currency trend, 2014 Q1 is rmb is stronger than last year which meant I can convert more sgd this quarter, but the result turn out to be weaker..is this make sense or I miss out something here?

Another doubt is on the income tax paid which outflow 5mil in the cash flow statement ...is this normal?

(Vested)

[Nick]

Straco reports 30% growth in revenue for 1Q

• 1Q revenue grew 29.5% to $14.66 million
• Strong cash balance of $106.8 million
• Debt free since 2008

http://straco.listedcompany.com/newsroom...DXBA.1.pdf [Financials]

http://straco.listedcompany.com/newsroom...DXBA.2.pdf [Media Release]

1) Revenue up 30% on the back of 22% increase in visitor numbers in the 2 aquariums in the usual quiet 1Q. Growth will come from increasing utilization in non-peak periods.

2) NPAT was flat. However, excluding the one off disposal of land use rights gain in 1Q 2013, PBT would have increased by 15%.

3) Due to the sharply appreciating SGD / RMB this year, Straco incurred $1.0 million forex loss in 1Q 14 as opposed to $0.61 million forex gain in 1Q 13. Excluding both items, NPAT would have risen 45%. Personally, forex movement is a real and recurring issue so I won't exclude it. The RMB/SGD rates moved 3.1% in 1Q 14.

4) 2Q and 3Q are where the bulk of the profits are generated. So it is difficult to simply extrapolate 1Q growth going forward. No news on AEI or the MOU. Management outlook remains bullish.

5) Balance sheet remains strong with $128 million cash (including its deposit for the project) and 0 debt. This works out to 15 cents / share. I expect a higher dividend this year unless M&A is carried out.

Any thoughts on the latest results ?

(Vested)

Hi nick

Looking at the sgd:rmb currency trend
2014 Q1 4.75-4.95
2013 Q1 5.05-4.90

Using mobile phone to look at the Google currency trend, 2014 Q1 is rmb is stronger than last year which meant I can convert more sgd this quarter, but the result turn out to be weaker..is this make sense or I miss out something here?

Another doubt is on the income tax paid which outflow 5mil in the cash flow statement ...is this normal?

(Vested)

1) I believe the forex movements are adjusted qoq meaning that it is compared to 4Q 2013 rates. So basically, it vomited back most of the forex gains it made last year in the recent quarter. If the RMB continues to slide, we will see more forex losses in 2Q. In pg 76 - 77 of the Annual Report, it mentions that a 10% strengthening of the SGD against RMB will result in $2.9 million forex loss.

2) There is nothing peculiar about repaying tax payables. In the balance sheet, tax liabilities were reduced from $7.0 million to $3.4 million.

(Vested)

[Gregg]

Straco reports 30% growth in revenue for 1Q

• 1Q revenue grew 29.5% to $14.66 million
• Strong cash balance of $106.8 million
• Debt free since 2008

http://straco.listedcompany.com/newsroom...DXBA.1.pdf [Financials]

http://straco.listedcompany.com/newsroom...DXBA.2.pdf [Media Release]

1) Revenue up 30% on the back of 22% increase in visitor numbers in the 2 aquariums in the usual quiet 1Q. Growth will come from increasing utilization in non-peak periods.

2) NPAT was flat. However, excluding the one off disposal of land use rights gain in 1Q 2013, PBT would have increased by 15%.

3) Due to the sharply appreciating SGD / RMB this year, Straco incurred $1.0 million forex loss in 1Q 14 as opposed to $0.61 million forex gain in 1Q 13. Excluding both items, NPAT would have risen 45%. Personally, forex movement is a real and recurring issue so I won't exclude it. The RMB/SGD rates moved 3.1% in 1Q 14.

4) 2Q and 3Q are where the bulk of the profits are generated. So it is difficult to simply extrapolate 1Q growth going forward. No news on AEI or the MOU. Management outlook remains bullish.

5) Balance sheet remains strong with $128 million cash (including its deposit for the project) and 0 debt. This works out to 15 cents / share. I expect a higher dividend this year unless M&A is carried out.

Any thoughts on the latest results ?

(Vested)

Hi nick

Looking at the sgd:rmb currency trend
2014 Q1 4.75-4.95
2013 Q1 5.05-4.90

Using mobile phone to look at the Google currency trend, 2014 Q1 is rmb is stronger than last year which meant I can convert more sgd this quarter, but the result turn out to be weaker..is this make sense or I miss out something here?

Another doubt is on the income tax paid which outflow 5mil in the cash flow statement ...is this normal?

(Vested)

1) I believe the forex movements are adjusted qoq meaning that it is compared to 4Q 2013 rates. So basically, it vomited back most of the forex gains it made last year in the recent quarter. If the RMB continues to slide, we will see more forex losses in 2Q. In pg 76 - 77 of the Annual Report, it mentions that a 10% strengthening of the SGD against RMB will result in $2.9 million forex loss.

2) There is nothing peculiar about repaying tax payables. In the balance sheet, tax liabilities were reduced from $7.0 million to $3.4 million.

(Vested)

Hi nick

Maybe you can enlighten me a bit on the cash flow statement, why the exchange loss ($1001k ) is consider as cash inflow?

[LittleBoyInvestor]

Straco reports 30% growth in revenue for 1Q

• 1Q revenue grew 29.5% to $14.66 million
• Strong cash balance of $106.8 million
• Debt free since 2008

http://straco.listedcompany.com/newsroom...DXBA.1.pdf [Financials]

http://straco.listedcompany.com/newsroom...DXBA.2.pdf [Media Release]

1) Revenue up 30% on the back of 22% increase in visitor numbers in the 2 aquariums in the usual quiet 1Q. Growth will come from increasing utilization in non-peak periods.

2) NPAT was flat. However, excluding the one off disposal of land use rights gain in 1Q 2013, PBT would have increased by 15%.

3) Due to the sharply appreciating SGD / RMB this year, Straco incurred $1.0 million forex loss in 1Q 14 as opposed to $0.61 million forex gain in 1Q 13. Excluding both items, NPAT would have risen 45%. Personally, forex movement is a real and recurring issue so I won't exclude it. The RMB/SGD rates moved 3.1% in 1Q 14.

4) 2Q and 3Q are where the bulk of the profits are generated. So it is difficult to simply extrapolate 1Q growth going forward. No news on AEI or the MOU. Management outlook remains bullish.

5) Balance sheet remains strong with $128 million cash (including its deposit for the project) and 0 debt. This works out to 15 cents / share. I expect a higher dividend this year unless M&A is carried out.

Any thoughts on the latest results ?

(Vested)

Hi nick

Looking at the sgd:rmb currency trend
2014 Q1 4.75-4.95
2013 Q1 5.05-4.90

Using mobile phone to look at the Google currency trend, 2014 Q1 is rmb is stronger than last year which meant I can convert more sgd this quarter, but the result turn out to be weaker..is this make sense or I miss out something here?

Another doubt is on the income tax paid which outflow 5mil in the cash flow statement ...is this normal?

(Vested)

1) I believe the forex movements are adjusted qoq meaning that it is compared to 4Q 2013 rates. So basically, it vomited back most of the forex gains it made last year in the recent quarter. If the RMB continues to slide, we will see more forex losses in 2Q. In pg 76 - 77 of the Annual Report, it mentions that a 10% strengthening of the SGD against RMB will result in $2.9 million forex loss.

2) There is nothing peculiar about repaying tax payables. In the balance sheet, tax liabilities were reduced from $7.0 million to $3.4 million.

(Vested)

Hi nick

Maybe you can enlighten me a bit on the cash flow statement, why the exchange loss ($1001k ) is consider as cash inflow?

Hi gregg,

In accounting term, for Cash Flow Statement under Operating Activities, They want to account for how much cash your business generate or use up. Thus, they add back Eg. Loss in Disposal, Loss in Foreign Exchange, Depreciation. For this case, Straco has a foreign exchange loss of 1010k. Thus, they add back 1010k to account for how much the core operation is actually earning.

I hope this answers your question?

But I'm not sure why the value is 1001. Isn't it suppose to be 1010 as stated in page 2/12?

http://littleboyinvestment.blogspot.sg/

Cheers!

[LLI]

Anyone know the progress of the project they are bidding for?

[Gregg]

Anyone know the progress of the project they are bidding for?

No announcement yet ,if not wrong,someone did ask in the agm and the outcome will be unveiled sometime in Q2, so still got 2 months to go ..

[LLI]

Thanks
It seems they might be spending quite alot for the project. Given the bidding deposit is already so large.

Anyone know the progress of the project they are bidding for?

No announcement yet ,if not wrong,someone did ask in the agm and the outcome will be unveiled sometime in Q2, so still got 2 months to go ..

[ikur1]

Another thing to keep watch for this one is the level of option compensation given out to management.

If you check AR they did charge this compensation into the p&l but using a grossly understated figure, if i'm not mistaken the latest year 2013 was 8 cents! on about 3 mil option shares

how do buddies account for this?
i'm thinking, say they can exercise at 8 cents and we think fair value is 60 cents for example. there's 52 cents unaccounted for for each option exercised, we should adjust profit figure by this much for the year?
also dun forget the dilution of the enlarged outstanding share

(vested)