Straco -- gem?

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11 years 4 months ago #13488 by niadmin
Replied by niadmin on topic Straco -- gem?
adding to the growing discussion on Straco, Nick posted in www.valuebuddies.com/thread-2915.html :

Since its listing in SGX in 2004, the Company has only made 1 major M&A - acquiring Underwater World Xiamen for $12.33 million in Sept 2007. In FY 2006, the asset generated NPAT of $1.9 million so it was a pretty decent buy. Going forward, the asset enabled Straco aquarium division results to surge dramatically with PBT increasing from $14.5 million in 2008 to $31.7 million in 2012. This is attributed to rising visitor level (the Underwater World Xiamen had seen visitors increasing by over 50% and higher ticketing price). Unfortunately, this was the sole major M&A in this period highlighting the difficulty of acquiring excellent assets in China.

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11 years 4 months ago #13571 by Val
Replied by Val on topic Straco -- gem?
Companies like Straco seem to attract a certain type. Just hit 31 cents. It's the highest in 5 years.

Value investors it must hv been who bought it.

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11 years 4 months ago - 11 years 4 months ago #13606 by Rich
Replied by Rich on topic Straco -- gem?
Straco refuses to come down in price. Instead, there is enough accumulation despite the illiquidity to nudge the price upward (closed at 31 cents yesterday).

I decided to revisit the financial statements to try to understand the business better -- and perhaps convince myself to pay up for the stock at current levels.

I found the cashflows amazing.

In 2012, Straco generated S$27.5 m in operating cashflow on revenue of $55.2 m revenue.

It didn't have to use net cash for capex, as its S$1.1 m PPE expenditure (presumably to repair, to replace marine exhibits, etc) was more than covered by its interest income of S$1.5 m.

Cash really pours into its bank account.

So what did it do with the cash? Last year, it paid $6.5 m as dividends and $4.6 m to buyback shares.

Net net, it had $17.1 m from 2012 to add to its cash pile, raising it to S$96 million.

Any one who follows the cash flows above will recognise that this is a solid business matched by few others.
Last edit: 11 years 4 months ago by Rich.

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11 years 3 months ago #13631 by pine
Replied by pine on topic Straco -- gem?
What's interesting to highlight is:

Straco will pay its 1.25 cent dividend on 22 May 2013. Anyone buying now at 31 cents will need to wait less than 2 months for the dividend -- the annualised yield is 1.25 divided by 31 x 6 x 100% = 24%!

Then you wait 1 more year ... to get the regular 4% yield assuming the payout is still 1.25 cent a share. (Of course, Straco is so cash-rich it can afford to raise its dividend, unless it has a M&A project in the pipeline).

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11 years 3 months ago #13727 by pine
Replied by pine on topic Straco -- gem?
I thought of looking for comparables and found them right at our doorstep -- Haw Par Corporation. It owns 2 aquariums in Sentosa and in Pattaya.

In its annual report 2012, Haw Par gave the turnover of this business segment as $30.2 m and the operating profit as $11.9 million. Well, that's a nice juicy 39% margin, which is similar to Straco's!

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11 years 2 months ago #13802 by pine
Replied by pine on topic Straco -- gem?
What's consumer sentiment in shanghai ss bird flu situation evolves? Will visitors shy away fr aquariums?

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