2009 Media Releases

September 15, 2009

Deutsche Bank initiates coverage of carsales.com

Deutsche Bank has initiated coverage of online automotives classifieds company Carsales.com (ASX: CRZ) with a Hold recommendation.

Research analyst Tim Plumbe said, “Carsales is the dominant market leader in online automotive classifieds, has a proven business model, clean balance sheet, good cashflows and a strong management team which all make for an appealing stock. CRZ has a solid growth profile underpinned by structural change, resulting in lower earnings risk relative to other emerging company stocks”.

After a long-awaited IPO, Carsales commenced initial trading last Thursday. Deutsche Bank forecasts FY10 EPS growth of 28%, which is 8% higher than company guidance. “We believe that FY10 earnings growth will be driven by the continued penetration of automotive dealerships, a cyclical recovery in car sales, increased enquiries following the platform modifications and the full year benefit of the March 2009 price increase for private seller ads”, says Mr Plumbe.

According to Deutsche Bank research, CRZ is well positioned to increase its market share in the online automotive classifieds markets, which in turn is likely to continue to grow as print revenues shift online. Furthermore, Deutsche Bank thinks CRZ is well-placed to benefit from the gradual shift of automotive manufacturer advertising to online. This, together with a predominantly fixed-cost base, allows for strong margin expansion potential.

With an estimated 60% online automotive classifieds revenue market share, Carsales is the dominant entrenched market leader. CRZ provides a platform for both motor vehicle dealerships and private sellers to reach prospective car buyers. CRZ owns and operates a portfolio of automotive and related industry websites, including Australia’s number one classifieds website, carsales.com.au.

For further information, please contact:

Amy King 02 8258 2505



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