Business Model of Straco

Straco Corporation Limited (‘Straco’) is a developer, owner and operator of tourist attractions in Singapore and China. It started operations in 1990s and successfully listed on the SGX Mainboard in February 2004. Its current portfolio includes Shanghai Ocean Aquarium, Underwater World Xiamen, Lintong Lixing Cable Car and Singapore Flyer.

Diagram 1: The various assets under Straco’s portfolio

Straco employs a business model that is simple enough for the man on the street to understand. As the owner and operator of tourist assets, Straco generates the bulk of its revenue from the sale of admission tickets. Part of its revenue comes from rent paid by third parties that lease some of the ancillary spaces at its assets. It also has a relatively stable operating expenditure (labour, utilities etc) while capital expenditure is also minimal.

Investment Merits of Straco

1. Solid track record

Straco’s track record is enviable. …