Carsales.Com Limited

CAR Details
Management changes: Carsales.Com Limited (ASX: CAR) reported that their nominee non-executive directors, Mr Cameron McIntyre and Mr Ajay Bhatia would quit from iCar Asia Ltd (ASX: ICQ) board. The group would thus incur a one off non-cash impairment charge of over $7 million in respect of the write-down to market value of the 15.6% stake held in iCar Asia during half year ended 31 December 2016. Further, Greg Roebuck is set to retire while Cameron McIntyre will become CEO. On the other hand, the group continued to expand their international presence, and finished 83% of Chileautos acquisition, which is a major auto classifieds business in Chile. CAR also acquired 65% of SoloAutos in Mexico during the year. The group delivered a revenue growth of 10% while adjusted NPAT rose 9% for FY16. However, CAR stock fell over 8.6% in the last three months (as at January 19, 2017) and still trading at slightly high levels. We believe that the stock is “Expensive” at the current price of – $ 10.93

 
CAR Daily Chart (Source: Thomson Reuters) 

SEEK Limited

SEK Details
Positive track record: SEEK Limited (ASX: SEK) reported a revenue rise of 11% year on year (yoy) to $950.4 million in fiscal year of 2016 even though target industry dynamics are volatile. In fact, the group’s performance has been consistent and delivered a CAGR of 30% in revenues in the last twelve years (from FY04 to FY16). SEEK’s investment in their product & technology capabilities is reaping benefits. Seek’s International business delivered revenue growth of 18% in FY16. Brasil Online has also achieved reasonable local currency results even in depressed conditions. Despite international opportunity, the group believes that they still have a lot of potential in their core Australia and New Zealand market indicating ongoing performance for the coming quarters.
 

Positive track record (Source: Company Reports)
 
SEK stock plummeted 4.7% in the last three months (as of January 19, 2017). Despite volatile conditions, we believe that there is prospect in the stock and accordingly give a “Hold” recommendation at the current price of $ 14.67

 
SEK Daily Chart (Source: Thomson Reuters) 

Kogan.com Limited

KGN Details
Expecting a better FY17 performance: Kogan.com Limited (ASX: KGN) reported that their November and December months’ performance has been better than forecasted. As a result, the group forecasts a better scenario against their earlier provided pro-forma EBITDA guidance of between $8.0m – $9.0m for FY17. The group’s focus on inventories showed benefits, and it reported $41.83 million of inventories as at 31 December 2016 which includes $32.27 million stock in warehouse and $9.56 million stock in transit. Over 90% of stock in warehouse was from the second quarter of 2017 showing their solid turnover of inventory. KGN is also building a healthy balance sheet reporting a cash of $26.5 million as at the second quarter of 2017.

 

Cash flows from financing activity (Source: Company Reports)
 
Given this positive update, KGN stock rallied over 20.9% in last one month (as of January 19, 2017). We give a “Speculative Buy” on the stock at the current price of - $ 1.65

 
KGN Daily Chart (Source: Thomson Reuters) 

REA Group Limited

REA Details
Investing in India: REA Group Limited (ASX: REA) is eyeing India which is a major market in Asia. India’s real estate market is expected to reach US 180 billion by 2020. Indian digital real estate advertising market is in its nascent stage and is expected to grow as the urban population would rise to 583 million by 2030 against 420 million in 2015. The group has announced for its move to acquire a 14.7% strategic stake in PropTiger, which is a major digital real estate marketing platform in India. PropTiger has proptiger.com, Makaan.com under them and recently has acquired Housing.com. The group is acquiring this stake for AUD 67.9 million (USD 50 million), and funding this via cash reserves. On the other hand, REA is offloading their non-core assets and accordingly boosting their capital position. The group is selling their European businesses, atHome Group S.à r.l. and REA Italia S.r.l., to Oakley Capital Private. This transaction is for €132.6 million (AUD 189.7 million) on a cash and debt free basis leading to an estimated profit of €115.2 million (AUD 164.8 million) subject to final completion adjustments. REA stock recovered over 6.3% in the last four weeks (as of January 19, 2017) while we give a “Hold” recommendation on the stock at the current price of – $ 55.82

 
REA Daily Chart (Source: Thomson Reuters)

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