We  deem  Catcha Media (CHM)’s  1QFY13  core  net  loss  of  MYR2.9m within  our  expectations,  as  1Q  is  seasonally  the  weakest  quarter  for media  companies.  Moreover,  market  sentiment  was  dampened  by political  uncertainty  during  the  quarter.  We  expect  2H  to  be  better, backed  by  the  recovery  in  adex  and  the  completion  of  its  merger  with Says.com. Maintain BUY, with an SOP-derived FV of MYR0.92.

- Within  expectation.  We  deem  CHM’s  1QFY13  core  net  loss  of MYR2.9m (+66.2% q-o-q, >-100% y-o-y) within our expectations, as 1Q is  seasonally  the  weakest  quarter  for  media  advertising  business. Moreover, market sentiment was further dampened by the uncertainty of the  general  election.  1QFY13  was  no  doubt  a  challenging  quarter  for CHM  as  all  its  business  segments  recorded  earnings  declines  and  its bottomline  was  further  dragged  down  by  losses  from  its  associate company iCar, though non-cash in nature.

- A brighter 2H ahead. We expect a better 2H for CHM on the back of: i) the anticipated  recovery in adex,  which would benefit media companies including CHM, ii) its proposed merger with Says.com, which is set to be completed soon, could boost CHM’s bottomline.

- Maintain  BUY,  FV  unchanged.  We  keep  our  valuation  unchanged  at this  juncture  on  expectation  that  CHM’s  operations  will  improve  in  2H, while  the  profit  contribution  from  Says.com  after  the  merger  would narrow its losses. Hence, maintain BUY on CHM, with our SOP-derived FV of MYR0.92 unchanged.

Source: RHB