Straco shares at 34 cents! 2nd day of accumulation by discerning investors after the marvellous 2Q results.
The business is absolutely beautiful for generating copious amounts of cash. Its operating costs are steady even when more and more visitors descend on the aquariums. And that's how you get higher and higher profit margins.
China's domestic tourism is booming, don't forget. This is what drives hordes of tourists to visit Straco's aquariums in Shanghai & Xiamen for the first time in their lives.
Dividend yield stocks are not supposed to provide captial gains but Straco has given both, ie a 29.4% capital gain since my first recommendation and remains a decent yield stock.
Straco yesterday slipped by 5.9% to S$0.32. The company is the owner and operator of marine theme parks and cable car services in China and can be regarded as a play on the tourism sector in the country. It released its second quarter results two weeks ago and reported healthy double digit growth in both sales and profit. For the first six months of 2013, Straco’s sales increased by 21% year-on-year to S$27.7m while profit jumped 71% to S$13.7m.
In the earnings release, Straco’s management stated that they’ve been seeing positive policies from the Chinese government in terms of boosting both international as well as domestic tourism growth, which augurs well for the company.
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