Disclaimer: Asian Century Stocks uses information sources believed to be reliable, but their accuracy cannot be guaranteed. The information contained in this publication is not intended to constitute individual investment advice and is not designed to meet your personal financial situation. The opinions expressed in such publications are those of the publisher and are subject to change without notice. You are advised to discuss your investment options with your financial advisers, including whether any investment suits your specific needs. From time to time, I may have positions in the securities covered in the articles on this website. Full disclosure: I do not hold a position in SUTL Enterprise at the time of publishing this article. To reiterate, this post and the below presentation are for informational and educational purposes only － not a recommendation to buy or sell shares.
SUTL Enterprise (SUTL SP - US$42 million) is a Singapore-listed marina operator that’s most famous for its One°15 Marina in Sentosa Cove. It’s a FinTwit favourite and has been mentioned before by Huat Fearful & Greedy, Mokapu Capital and David Katunarić.
The company is a part of Singaporean conglomerate SUTL Global, which distributes consumer products across Asia. When the founder's son took over in the early 2000s, he saw potential in Singapore’s private marina industry. In 2003, he bid for a contract to operate a marina on the island of Sentosa.
In 2015, the marina business was injected into a listed subsidiary of SUTL, now called “SUTL Enterprise”, that’s become a pure-play marina operator.
SUTL’s flagship ONE ̊15 Marina in Sentosa Cove has berths for 270 yachts and 14 mega-yachts, together with a clubhouse for 3,800 members. The membership entrance fee alone is about SG$60,000 per person. Having your yacht in the marina can cost SG$50,000 per year or more.
Customers seem to be happy to pay these prices. The One°15 Sentosa Cove marina is 97% occupied, and in the past, the waiting list for club membership has been more than 2 years long.
The reason why customers are willing to pay is that there aren’t many alternatives. Certainly not on Sentosa, where only some landed houses have waterfront berths and those that do, can’t accommodate larger yachts. Another competitive advantage for the One°15 Marina in Sentosa Cove is that it offers a customs, immigration and quarantine facility, enabling visitors to enter the country directly through the marina.
SUTL’s corporate structure is complex. The parent SUTL Group is much larger and probably has bargaining power. CEO Arthur Tay controls both the ListCo and its parent. SUTL Enterprise was listed through a reverse merger, meaning fewer information disclosure requirements than companies that have gone through the IPO route.
On the other hand, Arthur Tay does seem to care deeply about his legacy and reputation. I think he means well. In the past few years, SUTL Enterprise has been generous with dividends. There haven’t been many related party transactions either.
){kind=link}