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32% yoy earnings growth in FY15
We expect Straco to see earnings growth of 32% yoy in 2015, driven by: 1) maiden full-year contributions from the Singapore Flyer and 2) 15% ticket price revision at SOA in 4Q15.
Singapore Flyer.
We expect the Flyer to contribute S$35m in revenue in FY15, of which 88% is from ticket sales and the remaining 12% from rental income. We estimate that the Flyer will contribute S$7m in net profit, implying a 21% net margin (vs. 45% from aquariums).
We have built in the following assumptions into our model:
Singapore Flyer.
We expect the Flyer to contribute S$35m in revenue in FY15, of which 88% is from ticket sales and the remaining 12% from rental income. We estimate that the Flyer will contribute S$7m in net profit, implying a 21% net margin (vs. 45% from aquariums).
We have built in the following assumptions into our model:
Average ticket price of S$26 (Adult: S$33, Child: S$21, Senior: S$24)
50% of visitors comprise tour groups, who receive a 30% discount on ticket prices
Total of 1.4m visitors in 2015
Retail rent of S$8/psf
Net lettable area of 60,000 sq ft
70% occupancy at the retail terminal
Interest rate of 2.5% on S$75.6m of borrowing (60% of S$126m acquisition cost financed through debt)
@ Straco's Shanghai Ocean Aquarium: Visitors gaze in wonder at the arapaima fish which originated in the rivers and lakes of the Amazon basin and is one of the largest freshwater fish in the world. NextInsight file photo
@ Straco's Shanghai Ocean Aquarium: Visitors gaze in wonder at the arapaima fish which originated in the rivers and lakes of the Amazon basin and is one of the largest freshwater fish in the world. NextInsight file photo Shanghai Ocean Aquarium. Based on historical trends in ticket price revisions, we have factored in a 15% price hike at SOA in 4Q15 from Rmb160 to Rmb185. Given that the bulk of the aquarium’s operating expenses are fixed, the amount of the ticket price hike should flow through to the bottomline.
