SINGAPORE (March 2): UOB KayHian likes SUTL Enterprise, owner and operator of the award winning ONE15 Marina Club at Sentosa Cove.
(See also: SUTL Enterprise’s 4Q16 performance sees significant improvement)
In an unrated Thursday report, analyst Nicholas Leow says the company has a long track record of operating and managing successful marina projects around the world.
Currently, the ONE15 Marina Club in Sentosa has 3,800 members, the maximum number it can take.
Most members paid a one-off fee during the construction phase of the club when the club was launched. They also pay a monthly subscription fee which is adjusted periodically. On top of the monthly fee, there is a berthing fee for yacht owners.
All the berths have been taken up with a 2.5-year waiting list.
The club also operates a yacht chartering business where it assists club members in chartering out their yachts.
SUTL intends to expand in the region through either a JV or consultancy model.
Leow says this model is a low-execution risk business whereby SUTL provides expertise in marina management to marina operators around the world.
It is currently providing the consultancy business to a marina right next to the Brooklyn Bridge, taking a fixed fee or a percentage of revenue, whichever is higher.
Meanwhile, SUTL has announced a JV with UEM Sunrise to develop and operate the Puteri Harbour Marina in Malaysia.
Construction will start in 1Q17 and take two years to complete. The marina has a capacity of 6,000 members with an initial RM25,000 ($7,928) joining fee.
As background, Leow says yacht spending amounted to about US$8.7 billion ($12.3 billion), or 1% of the US$1.1 trillion luxury goods market.
“We expect the spending on yachts to grow as the world’s UHNW wealth is expected to surpass US$40 trillion with a population of 250,000 within the next five years,” adds the analyst.
As an added advantage, SUTL has a very strong balance sheet with zero debt. The company has a net cash position of $41.3 million or about 72% of its current market capitalisation.
Shares of SUTL are up 1 cent at 68 cents.
