I need to do more work on it (in particular go through their prospectus). One thing which is strange with them : they have a negative working capital model as they have no inventory and customers who pay them more rapidly than they pay their suppliers. No sure yet to understand why.
You're making a good point about the small value of their average contract. Obviously reducing the risk of default that I was highlighting.
Quite surprising that this company can have such a high free cash flow, with only 2.2 % EBITDA margin, even if we exclude the effect of working capital. Obviously there is a potential to increase further their cash flow if they improve their EBITDA margin (around 4 % in FY 19 and FY 20). Not surprised that they mention that FY 24 is focusing on margin growth.
SHA Price at posting:
$1.70 Sentiment: None Disclosure: Not Held
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