Catcha's 9MFY12 core loss  of  RM5m,  after  stripping  away  a  one-time  gain  of RM18.7m  from  the  disposal  of  its  subsidiaries,  came  below  expectations.  We reckon  the  elevated  opex  will  continue  to  drag  down  its  bottomline  in  the  near term. That said, we still believe in the growth prospects of its online media and e-commerce businesses over the longerperiod. All in, we are cutting our FY12/FY13core  earnings  to  -RM5.4m/RM4.9m  from  RM6.3m/RM8.6m  previously.  We  are downgrading the stock to NEUTRAL and trimming our FV to RM0.43 based on 12x FY13 PE.
 
Below expectations. Catcha's 9MFY12 core loss of RM5m missed our expectations after stripping away a one-time gain of RM18.7m from the disposal of its subsidiaries ' i) 50%-owned Auto Discounts SB, ii) Catcha Lifestyle's Evo Business,  and  iii)  iCar  Asia  Ltd (Catcha  pared  down  its  equity  interest  of  75%  to  37.7%  to  complete  its  listing  on  ASX). The company continued to bleed in 3Q despite its revenue growing22% y-o-y (-0.8% q-o-q) as higher opex was incurred to ramp up its regional presence. On a 9M basis, revenue contracted by 1% y-o-y to RM27.9m while its bottomline plunged from RM1.4m to a loss of RM5m.
 
Downgrade  to  NEUTRAL,  FV  RM0.43.  Given  that  its  online  media  and  e-commerce businesses  are  still  in  their  infancy,  the  elevated  opex  would  continue  to  drag  down  its bottomline  in  the  near  term.  We  are  revising  our  FY12/FY13  core  earnings  to RM5.4m/RM4.9m  from  RM6.3m/RM8.6m  previously,  and  are  introducing  our  FY14 forecast  as  well.  Our  FV  was  lowered  to  RM0.43  premised  on  12x  FY13  PE.  In  view  of minimal upside from the current price, we are downgrading the stock to NEUTRAL.

Source: OSK