Posted by: donmihaihai | November 14, 2011

Time check : 3Q2011

Straco Corporation Limited
3Q2011 results is surprisingly good. The results basically fly yoy. I love aquarium business especially those that situated at the right place and lure people in just like that. It is the one of the must visit place not because people love to visit an aquarium. Somehow a certain % of visitor will step into SOA when they are in Shanghai. Same thing as visiting Underwater World Singapore when in Singapore.

The cost of operating an aquarium is pretty much fixed and when revenues crossed certain level, return will become great. It will not be fast growing but it will most likely to be very profitable growth. Out of the huge number of lost making aquariums in China, Straco owns two profitable aquariums. It acquired UWX few years back and turns out to be a smart buy. With it almost $80 million cash on hand, buying growth is easy but buying profitable assets is another story. Not everything is equal.

There is nothing much to analyse about the number except on the following
1) Fixed Assets – I have a strong feeling that Straco is under invest in itself
2) Expenses – This is an area where management can control.
3) Revenues – Telltail sign of profitability and the place to be for visitor
4) No sign of aggressive gunning for growth.

Haw Par Corporation Limited
I love aquarium business and I like Underwater World Singapore. It the same like SOA. But Underwater World Pattaya and Chengdu Oceanarium look like they belong to those lost making aquariums of China. Chengdu Oceanarium had ceased operation and I don’t know what will happen to Underwater World Pattaya.

Growths at healthcare and property division are not going to be fast as well. But these 3 divisions have produced exceptional profits over the years and unlikely to change in the future.

I was talking about putting cash to good use few months back. Of course I would love to get them back as dividends but from the way Haw Par is being managed, it is unlikely to happen. What is the next best thing? Roll the profit and Haw Par placed $20 million into AFS in last quarter. Good.

Haw Par remains an exception for me as I have not read UOB.

Asia Enterprises Holding Limited
3Q2011 results were exceptional? No!

Despite having increased revenues and profit in the quarter, it was just another quarter for Asia Enterprises. Looking quarter on quarter or quarter to quarter is as good as guessing the price of steel.

I try not to look at the movement in revenues and margins. That say I am perfectly comfortable with revenues dropped by half or Asia Enterprises making losses in any particular quarter. It will happen!

I look for things company can control –
1) Expenses – Operating in an industry that swing and hardly any growth, expenses count.
2) Inactive – Rather them be slow and old than aggressive and die.
3) Profitability – Over longer period profitability count and I am counting. So far it is so-so since Asia Enterprises wrote down the inventories.

Wheelock Properties (Singapore) Limited
Wrong timing!

I have been waiting. I knew revenues and profits will drop off the cliff in this year. Little did I know INT FRS 115 has moved the cliff to next year.

That market has been shaking for some time. Hoping for a bomb explosion from 3Q results but forgot about TOP dates.

There is nothing much to say about the number so what’s next? I don’t know but I want to buy more cheaply.

Sarin Technologies Limited
3Q results were good. Sarin is paying out more dividends and spending money.

Anything to analyse about the results? Not much except that these number reflect on those operating and corporate activities. Like
1) More dividends
2) Share buyback
3) R&D and acquisition of technologies
4) Capital expenditures

Is Sarin Technologies paying too much to buy back share at 70 to 80 cents per share? I don’t know.

I don’t know what the true valuation of this company is. I knew I paid too much for my initial purchases. And I knew it was incredible cheap when share price dropped below 30 cents and then 20 cents. Yes there were worries about the duration of the slump but with exception of prolong non existence of demand for their products, I did not need to know a lot to see the cheapness back then…

That was the easy part. Hopefully I will have the chance to experience it again.

The hard part is selling at what valuation. Unlike companies like Wheelock, Asia Enterprises, Haw Par and Straco I have a problem with selling Sarin at what kind of valuation. But whatever the real worth of Sarin is, I have always loved to sell something at 5 X BV.


  1. Pretty surprise that you took in Straco.

    Not sure about this year since I don’t own the shares anymore but when I attended their AGM for FY10, I thought I was watching a puppet show.

  2. Other than what you pointed out in ur site, Straco basically operate like a private company after listed and ignoring everyone. Any other thing that it can harm us? 2 ways pump?

    It is easy to be in when i ignore corporate governance.

    I get what majority shareholder get.

    I don’t see a need to has a nice projection into the future and good management to justify buying at current valuation. Actually I think post listing results say this is a pretty well run company with a pretty good management.

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