Straco -- gem?

The FY2014 earnings was S$38 million, and translates into a PE of 20X if you use the stock price of 92 cents.

20X looks fairly valued but don't forget, Straco incurred one-off fees of nearly S$2m for the acquisition of the SG Flyer.

For this year, SG Flyer is expected to contribute S$7 m in net profit to Straco (CIMB's forecast). --> Straco's earnings would come in at about S$59 m. The PE would then be 15.5X based on stock price of 92 cents.

This looks cheap still for a business that is a cash gusher imho. Straco's cash pile was $113 m at end-2014, and forecast to rise to S$153 million by end-2015 (CIMB forecast).

Built for $240m, sold for $100m less after 6 years to STRACO, the white knight.

Lots of redevelopment potential on the land area 363,000 sq ft -- equiv to 1,120 car park lots.

The SG Flyer is for tourists and there will be lots more this year, the year of SG50 celebrations. Maybe many Singaporeans will take Flyer again, if there is a promotion to mark SG50. Otherwise, I doubt Singaporeans will go to the Flyer over and over again.

See how Straco's share price and earnings have soared in 7 years or so.




Click on images to enlarge.



Source: Motley Fool.


The best is yet to come. Watch the Wheel turn. It's the Wheel of Fortune!

The performance data posted by Joes (Source: Motley Fool)


Bread Talk 11/10/2007: EPS = 2.16c/Share Price = 47.9c/PE = 22
Raffles Med 11/10/2007: EPS = 6.34c/Share Price = $1.51/PE = 24
Straco 11/10/2007: EPS = 0.57c/Share Price = 19.5c/PE = 34

Bread Talk 17/3/2015: EPS = 4.33c/Share Price = $1.36c/PE = 31.4
Raffles Med 17/3/2015: EPS = 12.1c/Share Price = $3.89/PE = 32.1
Straco 17/3/2015: EPS = 4.45c/Share Price = 90c/PE = 20.2

Straco in 7 years has outperofrmed Bread Talk & Raffles Medical in percentage term in share price & EPS increased.

Share price at 90 cts trading at 20x PE is still way too cheap as compare to 30x PE for Bread Talk & Raffles Medical. Straco next lap of growth will be propel by 'The Singapore Flyer'.

Click on image to enlarge it.




-- High cash levels with minimal debt, until last year when Straco bought the Flyer. Hopefully, the Flyer will be another big winner in the months and years ahead. !

I have just chanced upon this lovely picture of the Shanghai Ocean Aquarium, the cash cow of Straco.

Click to enlarge: