Buy @ $1.485
A new stock to my current portfolio. Got interested after going to RWS during the March school hols. Compared to our previous visit a couple of years back, the whole place was very crowded. All the 3 attractions (Universal Studios, Marine Life Park, Adventure Cove) was packed with people. No complaints about USS as only one queue was >15mins (surprisingly a simple kiddie ride). For the other 2, perhaps because it's still newly opened, the crowd was quite terrible – not as enjoyable as USS.
Even at the hotels, I noticed many tour groups gathered at the hotel lobby. The luxury products shops, which I'd observed to be empty the whole day during my previous visit, was packed at times, likely by the tour groups. I didn't check out the restaurants this time as there're now cheaper alternatives, like Malaysia Food Street, which was usually rather packed. Even noticed convetioners (from AIA Thailand) were redeeming vouchers there for their dinner.
The whole overall experience was still rather enjoyable.
Coming back (to earth), there was coincidentally an article by TheEdge. In summary,
- EPS Big Drop in FY12 as the Novelty Factor is Gone
- FY10 = 5.38ct / 0.3ct if Incl. Discon Biz
- FY11 = 8.4ct
- FY12 = 4.81ct / PE = 30.87 @ $1.485
- Div = 1ct for FY11 & FY12 / Yield = 0.673% @ $1.485
- Cash = $4.38Bil vs Debts = $2.7Bil
- Growing Non-Casino Biz (Revenue)
- FY10 = 12.59%
- FY11 = 15.74%
- FY12 = 18.94%
- Successfully tendered for a plot of land at Jurong Town Hall Road to build a Hotel (ready by 2015)
- Casino License renewable every 3 years (renewed last year)
So, definitely not a Yield Stock. Not a Growth Stock either as EPS dropped due largely to declining margins from 31.64% (FY11) to 23% (FY12). EPS is largely determined by the Casino operations and in this segment, mainly from the High Rollers.
So, why buy?? I'm expecting Q113 to see some improvement, hopefully, at least +10%. Will evaluate again after Q113 results. In the meantime, my entry is a bit high as PE = 30+. Will likely buy more to average down if it drops, but won't be too aggressively. 😀