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iCar Asia Ltd half-year trading update: What you need to know

Malaysian online automotive website owner, iCar Asia Ltd (ASX: ICQ), today released a half-year trading update to the ASX which showed some good operational results.

Operating ASEAN’s number one network of automotive portals, iCar said it had continued to demonstrate, “rapid growth in all key metrics” during its first half of the 2015 financial year.

Some of the key highlights from the announcement include:

  • Record half year cash receipts are expected to be in excess of $2.5 million, up 116% year over year.
  • A record audience forecast at 7.5 million, plus unique visitors, up 88%.
  • Unique buyers visiting sites during the month of June are expected to exceed 550,000, up 136%.
  • iCar’s Response Management System is forecast to notch up more than 6,000 unique car dealer logins throughout the month of June, up 362%.

iCar says its performance to date, technology, sourcing and hiring, place it in good stead to grow market-leading positions in ASEAN’s three largest automotive markets.

However, it’s expected that continued investment, combined with a material one-off cost associated with the group’s purchase of Thailand’s leading automotive website, One2car.com; are expected to result in an EBITDA (earnings before interest, tax, depreciation and amortisation) loss of between $6.5 million and $7 million for the half year.

“We continue to demonstrate tremendous growth in all key operating metrics, furthering our leadership positions in ASEAN’s three largest automotive markets,” iCar CEO, Damon Rielly, said. “We have built very strong operating foundations for the business to generate sustained, scalable revenue growth, beginning with expected strong growth in the second half of 2015.”

Should you buy iCar shares?

Some investors have likened iCar Asia to Carsales.Com Ltd (ASX: CAR). However, the group arguably holds more blue sky potential than Carsales ever did — which could be why Carsales held 20% of iCar shares at 31 December 2014.

iCar could be required to raise cash from investors sometime in the near future. However, in my opinion any future weakness in the company’s share price could be a sound long-term buying opportunity for savvy investors.

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Motley Fool contributor Owen Raskiewicz owns shares of carsales.com Limited. Owen welcomes your feedback on Google plus (see below), LinkedIn or you can follow him on Twitter @ASXinvest.

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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