2008 Media Releases

Deutsche Bank has initiated coverage of electronic goods retailer JB Hi-Fi Ltd (ASX: JBH) with a Buy recommendation. Research analyst Kristan Walker initiated coverage with an A$13.80 twelve month price target.

Deutsche Bank’s forecasts are driven by the good exposure JB Hi-Fi offers to the high growth consumer electronics category. Walker said, “JB Hi-Fi offers consumers a differentiated value proposition that still has a few years left before the brand reaches saturation levels.

“With one of the lowest retailing cost bases and highest lease adjusted return on investment capital (ROIC) among our domestic retail coverage universe, we believe JB Hi-Fi deserves a premium rating.”

Despite slowing retail sales and estimated flat to negative sales growth by the domestic appliance and recorded music (DARM) category during FY09, Deutsche Bank expects sales growth for JB Hi-Fi to remain at above industry rates thanks to its continued store roll-out, category expansion and maturity levels of existing stores.

“Based on our detailed modelling of the impact of the store rollout on earnings, working capital and capex investment, we believe these three factors will mitigate the short term risks to discretionary retail spending,” Walker said.

JB Hi-Fi is a specialty discount retailer of branded home entertainment products with stores in all major cities in Australia and operates under two banners, JB Hi-Fi nationally and Clive Anthony in Queensland. Its products fall into the consumer electronics, car sound systems, music and DVDs and white goods categories. JB Hi-Fi Ltd was listed on the ASX in 2003 and has undertaken a growth strategy through category expansion, new store roll-outs, geographic expansion and bolt-on acquisitions.

For further information, please contact:

Camilla Anderson (02) 8258 2731
Kate Abrahams (02) 8258 2416