The plus point of Straco is generating cash flow which is growthing yearly. Div since 2008 increase from 0.375 cts to 0.75 cts. which is less than 3% yield.
I notice the revenue is reduceing. 2010 = 51.57m, 2011 = 46.12m & 1H 2012 = 22.83m. Profit margin also reduce from 2010 = 36% to 1H 2012 = 33.8%.
Although a very good defensive stock but the yield is lower than inflation. I still prefer Cordlife.
NextInsight will be meeting with CFO of Straco next week. Any questions you want us to ask? Pls post them here, and we will try our best to get you some answers.
1. They have a huge pool of cash, and they are building it up at a good rate. Dividend payout currently is 27.98% of earnings. How does the company determine how much dividends to give out since they don't have a div policy. Do they want to set up a div policy? Will they raise the dividend gradually in the future or give out a special dividend?
2. What are Straco's competitive advantage over competitors and substitutes? Theme parks are not normally associated with good return on investments, are investors mistaken?
3. How does Straco see themselves in 10 years time? Will they remain relevant? Are there major risks that they see which they can articulate?
Profitability is dependent on ticket price increase and number of visitors.
As to labour cost, looking at their recent 3Q result, I pluck out this "Taking away the exchange
differences, administrative expenses of the current quarter would have been $1.91 million,
compared to $1.72 million in 3Q2011; an increase of $0.19 million or 11.1%."
