Straco -- gem?

Yes, I read the post, thank you.

admin2 wrote: Dear sykn: Rock has some sharing in the post above, and now Mano, in this article: www.nextinsight.net/index.php/story-arch...-agri-global-invacom

NextInsight will hv its own report sometime next week. Cheers

Straco share price increased by 10% on high volume today. Out of 725.5k shares, 609.8k shares or 84% trade at $1.05 and above. Straco were trade as high as $1.11 and closed at $1.09. Most likely the interest on Straco today are in anticipation of first quarter 2015 result to be announce on 8th May 2015 which will include contribution from Singapore Flyer for the full quarter.

Can Straco join the 'S$1-Billion Market Cap. Club' will depends on the contribution coming from the Flyer and the soon to be unveil plan for the Singapore Flyer!

The results indicate that the Singapore Flyer was a sizzling contributor to earnings. :woohoo:

I took Dec 2014 revenue of $3.7 m from the annual report, and multiply it by 3 months to get about $11 million for 1Q.

Then assuming Dec was a peak period, I cut back the estimated 1Q revenue to $10 m.

Straco said its group revenue was $25.2 million. Based on my estimated $10 m for SG Flyer, it follows that $15.2 m came from the aquariums -- which is small growth from $14.6 m in 1Q2014.

Thus, the bulk of Straco's super earnings growth of 63% would have come from the Singapore Flyer! This is astounding. :woohoo:



(As a ballpark figure, the net profit from SG Flyer can be estimated to be $3-4 m in 1Q. And to think, there were investors who were worried that the Flyer would bleed red ink for a year or two.....)

Nick @ Valuebuddies.com worked the numbers out differently but conclusion is still that Flyer made good profit. His figure of $2.5 m looks very conservative as he had attributed a higher contribution from Shanghai Ocean Aquarium.

Unfortunately, no breakdown was given so we cannot tell how much did the aquarium and the Flyer contributed. The clue lies in the Minority Interest which compromised of 5% stake in SOA, 5% in cable car business and 10% stake in the Flyer (in 2015). We can create a matrix to 'guess' the Flyer contribution:

i) Assuming the Flyer broke even implies the bulk of the MI belongs to the 5% stake in SOA: This would imply that SOA earned $10.0 million NPAT (an increase of 132%). This is not likely as it exceeds the Group NPAT implying UWX was loss-making.

ii) Assuming Flyer was loss making implies the aquarium component of the MI would exceed $0.5 million implying SOA more than doubled since last year. This would contradict the historic growth rate of SOA.

iii) Hence it is more likely that the Flyer was profitable and did contribute positively to the Group's bottomline and hence the MI. Assuming SOA grew by 20%, the MI contribution from the Flyer would be $0.25 million implying it generated NPAT of $2.5 million in 1Q 2015 which compares well with the $1 million profit earned in Dec 2014. This would imply $5 million NPAT from SOA, $2.5 million NPAT from Flyer and $1.6 million NPAT from UWX. One can play with SOA growth rates and derive other combinations. It is just my guesswork to 'show' the Flyer was likely to be profitable.

2quarter result will be out in a few weeks. Let's look out for how high the Flyer flies, then we can have a better idea of Fy profits. Still unclear what Straco can do to make Flyer much more populer. For now gang expecting Straco to make a cool profit of s$50 M (PE 16x). Next year will be boosted by aqurium tix price incresses (already announced). Straco shares potentially worth 1.35 imho.

Straco busy buying back shares:

1,500,000 shares @ 94.5-95.5 cents on 8 July 2015.

500,000 shares @ 95 cents on 6 July 2015.