Expect this strong growth trend to continue as the demand for tourism rises with the nation's increasing 80% of Straco’s operating expenses comprise fixed costs, which means that the company can capture operational efficiencies through higher sales volumes. Expect Straco’s net margin to expand from 35.7% in 2012 to 47.2% in 2016 given the strong visitor arrivals across all its three attractions. Straco has not had any debt on its balance sheet since 2007. As at 3Q13, it has S$101.1m worth of cash and equivalents. This translates into net cash of S$0.12/share, or 26.7% of its current share price. Cash makes up 27.8% of the house $0.60 target price.
WHY: china consumption power, fixed cost
WHEN: china economic crisis? new capital investment?
VALUE: ?
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