Catcha Media (CHM)’s share  price  has  been  rising  steadily  and  is  now approaching  our  previous  MYR0.65  FV.  We  are  positive  on  the  company proposed  MYR60m  merger  and  expect  this  to  expedite  the company’s turnaround.  We  are  revising  our  SOP  valuation  to  arrive  at  a  new  FV  of MYR0.92 (from MYR0.65). Reiterate BUY.

- Fast  approaching  our  previous  MYR0.65  FV.  Last month,  we  upgraded Catcha  Media  to  a  BUY  with  its  FV  at  MYR0.65.  Since  then  and  following the country’s general election,  its  share  price  has  been  rising  steadily.  As the stock’s last closing price of MYR0.635 is close to our MYR0.65 FV, we take this opportunity to reexamine the company’s fundamentals.

-  iCar’s  market  value  stable.  In  our  previous  report  on  CMH,  we  advised investors not to ignore the value of 29.2%-owned iCar, an Australian-listed internet portal for car sales, whose stock has performed well since its IPO. Currently, iCar’s  market  value  of  AUD95.3m  (MYR280.3m)  translates  into MYR81.9m in equity (or MYR0.61 per share) for CHM.

-  On  the  right  course.  We  had  also  previously  highlighted  that  investors should not expect meaningful earnings from dotcoms in their early stages of operation as it takes time to build up traffic. Hence, we are looking at CHM’s revenue growth instead and adopt the stance that as long as the company’s balance  sheet  and  cash  flow  are  robust  enough  to  weather  any  losses,  it would  be  a  matter  of  time  before  CMH  becomes  profitable.  Note  that Catcha has net cash, enjoys high revenue growth and has no debts,  much like dotcom giants Google and Yahoo during their respective early years. 

- Who  is  Says.com?  As  guided  by  the  company,  Says.com  is  a  unique country-specific  crowd-sourced  content  broadcasting  platform  that leverages  on  active  social  media  users  to  curate  and  share  current  news trends.  Says.com  already  serves  over  80  leading  brands  including  Nike, Coca-Cola, Unilever, Maxis and Nestle.   

Source: RHB