Disappointing numbers. CHM's 1HFY12 revenue of RM18m (-10% y-o-y) fell short of our estimate, coming in at 40% of our full FY12 forecast, as contribution from its online media business made up less than half of our previous segmental estimate. Consequently, core earnings dived into the red for a disappointing RM2.4m loss. The e-commerce segment recorded a 58% surge in revenue, but this was not enough to offset the investment cost incurred in ramping up the company's regional presence. By the same token, the online media and online classifieds segments were unable to cover the operating expenses arising from higher staff costs as well as advertising & promotions, registering losses of approximately RM0.2m and RM0.5m respectively. All in, we deem the results satisfactory considering that these segments are in their start-up phases, during which high investment is required to ensure that they bear fruit in later years.

Looking forward. Although CHM's fell into the red, we are positive on the company's maiden foray into the regional auto market via the setting up of a regional car web portal catering to the booming auto industry. As we highlighted in our 5 July 2012 report, 'iCar Comes on Board', online classified advertising websites are generally divided into three main categories, namely jobs, property and cars. In the ASEAN region, Jobstreet and iProperty are well-established in the jobs and property classifieds categories respectively. The classified space for cars is the only online classified space that remains unconsolidated throughout the region. iCar intends to strengthen its existing online car classifieds websites in Malaysia, as well as in the booming auto markets of Indonesia and Thailand. We are positive on the company's growth going forward. Similar to CHM's sister company, iProperty, we expect iCar's revenue to grow at a CAGR of at least 150% over the next four to five years, and become profitable by 2015. We also see its e-commerce business, Haute Avenue, blossom going forward as it capitalises on healthy membership growth and the growing trend in internet shopping among Malaysians, especially young working adults.

Maintain BUY. Following our deep cut in earnings forecast, our FV now stands at RM0.77 (previously RM1.03), based on a 12x FY13 PE. Note that we have yet to include iCar's financials into our earnings projection. We believe the company's fledgling ventures will prove fruitful in the long run as they ride on the booming secondary automobile market as well as the proliferation of e-commerce.