Is a huge problem ahead?, page-24

Appreciated for sharing your thoughts.

After reading its history cash flow statements for 10 years, I decide not to buy it. Although I may not look closer than you but my decision is based on:

(1) During the past 10 years since 2006, it asked shareholders for $212m new capitals for new acquisitions and returned $163m dividends. I understand that free cash flow still looks very strong if we exclude acquisitions with an excuse of growth. But after acquisitions(the whole amount for investing cash flow), it barely provides any cash for dividends payment although it did successfully raise dividends every year since 2009. But the situation is kind of like borrowing money to pay dividends because management feel they can keep doing acquisitions and rinse money. I hope I am wrong about this, but after comparing it with Moody's cash statement for 10 years, I can say SAI is hardly a good cash cow and monopoly in its industry although I know SAI's history ave PE is around 18-20.

(2) If one division is so successful and strong, why does it need to keep diversifying? To be honest, this is how I feel about SAI's 1o years developments. I appreciate the management knows that the risk of the end of the 15-years PLA and do all kind of different efforts: risk management platform, training platform, property settlement etc. But it happens to reflect management's confidence in its core business if there is any core business ever. I could be a little bit too harsh or bearish on this baby but you honestly share your thoughts, I share mine.

(3) This baby is overshoot no doubt right now at 13 PE as one of the SaaS pioneers in ASX but I just don't believe its business model and it could rise to 16 PE in a short term? I don't know. Kind of cheap at this moment indeed.

Cheers~

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The above is not investment advice. Please do your own research.