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3 Things To Know From Straco Corporation Ltd’s Annual General Meeting

Straco Corporation Ltd (SGX: S85) just held its annual general meeting last week. For investors who are unfamiliar with the company, Straco Corporation is a tourism asset owner. The company owns iconic tourism assets such as the Singapore Flyer, Shanghai Ocean Aquarium, and the Underwater World Xiamen. The company’s shares have also been a great performer within the Singapore Exchange over the past 5 years. Shareholders of the company would have experienced about 470% gain in their investment with dividend reinvested over the past 5 years.

Some interesting discussions were held during the AGM, and here are the top three highlights of the event.

New normal for Underwater World Xiamen

Underwater World Xiamen (UWX) was badly hit by the new visitor control regulations to Gu Lang Yu, the island where UWX is located. The attraction saw a 20% decline in revenue and a 26% decline in visitors year on year.

Fortunately, according to the management, it seems that the worst should be over for UWX. Going forward, investors should expect revenue and visitor count in FY2015 to be the new normal for UWX.

Alignment of interests

Much was discussed between the shareholders and the board regarding its compensation plan for key management. Shareholders argued that key managements who already owned a large stake in the company should not be given extra options grants as it would do little to increase their alignment of interest with shareholders.

Discussion on compensation was heavily discussed with both the shareholders and board giving valid explanations. That being said, all resolutions in its extraordinary general meeting, which directs to granting more options for Mr. Wu, executive chairman, and his family in the management team, were passed through with minimal resistance.

All about the Flyer

However, the highlight of the AGM was still the discussion on the Flyer. As the company has signed a non-disclosure agreement, not much was revealed on the revamp of the Singapore Flyer.

According to its Chief financial officer, Mr. Amos Ng, the renovation project should start this year and would last around 24 months. Fortunately, he does not foresee any disruption to the current operation and the Singapore Flyer would continue to operate during this period.

Mr. Wu also indicated the new Flyer would be a key tourist spot of Singapore after the revamp and would be an iconic landmark in the future.

Foolish Summary

Overall, the meeting discussed some good and bad news. Although its operations in China are facing slower growth or declining growth, expectations are high for the future of Singapore Flyer.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Stanley Lim owns Straco Corporation.