Straco -- gem?

As its business model is essentially cash based, one can arque that it should be price/FCF. However, it should not make much difference for Straco. For last FY, eps and FCF per share is almost identical.

Importantly going forward, what strategies will they adopt to transform the business of Flyer. Learning from the mistakes of past management will be key learning points for Straco.

I have mentioned about the importance of diversifying its currency risk and the purchase of Flyer is a right step to manage this risk. Next step is to achieve an appropriate rate of return from this major investment and I look with keen anticipation its proposed business plans.

Straco is firming and just traded at 77 cents. Could it be that the business strategies for Flyer be released soon?.

Straco completed the deal on Nov 27 to buy the Singapore Flyer. It is a purchase that the market has not warmed up to, as reflected by the fall in the stock price from 80+ cents to 70+ cents pre- and post-deal news, respectively.

The view seems to be that the Flyer is not a great business. And whoever buys it is just making a bet.

I think we all could be in for a positive surprise.

Straco comes with long experience in making its 2 aquariums in China successful and generate a profuse amount of cash every year.

It's hard to believe that Straco would make a major investment (ie the Flyer) if there are long odds of earning a decent ROI. On the contrary, I think Straco picked up this deal because it has good chances of being strongly earnings-accretive.

You can derive an idea of that fr The Edge's article, which gave examples of mismanagement under the previous owner. These are things which can be tackled and result in enormous upside.

SINGAPORE FLYER: Some issues tackled, 'enormous upside' ahead


www.nextinsight.net/index.php/story-arch...s-upside-lies-ahead-

That's why I seriously doubt CIMB's initial forecast of a $1.4 m net loss in 2015 by the Flyer. We shall see...

With the completion of the purchase of Flyer, we should expect the strategy report to be released soon.

I expect a highly positive report to set the stage forward.

FACEBOOK REVEALS SINGAPORE'S MOST-VISITED ATTRACTION FOR 2014

1. Universal Studios Singapore
2. Marina Bay Sands
3. Gardens by the Bay
4. Sentosa Island
5. Singapore Zoo
6. Resorts World at Sentosa
7. S.E.A. Aquarium, Marine Life Park
8. Merlion Park @ Singapore
9. Singapore Flyer
10. Trick Eye Museum

Singapore Flyer, which was acquired by Straco Leisure for $140 million in Nov, came in at ninth place.

It's the biggest purchase in Straco's history. It's likely to be a significant contributor to Straco's P&L. Just watch.

73 cents is looking cheap. imho