Friday, April 20, 2012

AEONCR improved on its impressive performance

 Results Update

For 3-month ended 20/2/2012, AEONCR's net profit increased by 10% q-o-q or 43% y-o-y to RM28 million while its revenue increased by 5% q-o-q or 28% y-o-y to RM94 million. AEONCR's bottom-line & top-line continued to grow due to growth in receivables & increased financial transaction volume while operating expenses remained stable.

Table: AEONCR's last 8 quarterly results

Chart 1: AEONCR's last 19 quarterly results


AEONCR (at RM9.05 now) is trading at a PE of 11.4 times (based on last 4 quarters' EPS of 79.68 sen). Given AEONCR's sharp growth of 51% last year, its PEG ratio is only 0.2 time. It would not be prudent to assume that AEONCR can maintain last year's growth and if we dialed back the growth rate to 20%, its adjusted PEG ratio would be 0.5 time- which is still very attractive. As such, I would consider AEONCR to be undemanding at current price.

Technical Outlook

From Chart 2, AEONCR rallied strong since it broke above the 'horizontal' line at RM3.90-4.00 in April 2011 (here). The near-vertical rise has not experienced any serious correction to date. There were two shallow corrections in January & February this year but the share price did not even threaten the 50-day SMA line (see Chart 3). As such, I would consider any pullback to the 50-day SMA line to be a buying opportunity while a break below that line could be a danger sign.

Chart 2: AEONCR's weekly chart as at April 19, 2012 (Source: Tradesignum)

Chart 3: AEONCR's daily chart as at April 19, 2012 (Source: Tradesignum)


Based on good financial performance, attractive valuation & still positive technical outlook, AEONCR is still rated as a good stock for investment purpose.


Sonic said...

Hi Alex, can you comment about ytlpower. thanks

luckystock2 said...

Hi Alex,
Any opinion on YHS? Is it time to take profit since its PE already 18?I think that it may a bit overvalued now even though there's probably high growth from their business in Indonesia.

cheer said...

Hi Alex

How do you think this counter PLENITU with FA for long term investment


Anonymous said...

Hi Alex

Can you comment on YTLPower-WB? It is now trading at year low level of 59sen. Based on conversion price of 1.21 and underlying share price of 1.78, YTLPower-WB trading at almost zero premium.

Alex Lu said...

Hi Sonic

YTLpower has just broken to the downside of a 6-month old triangle formation at RM1.80. It may slide to RM1.70 & then RM1.60.

I think it could be a good BUY at RM1.60-1.70.

Alex Lu said...

Hi luckystock2

I agree with your take on YHS. It is trading at a PE of 18 times, which is rather rich for a company that is very conservative. The rally for the past 3 months has been very sharp and it could lead to a sharp correction & then consolidation. However, we can never tell how far it may still go before it snapped back, we may adopt a progressive SELL INTO STRENGTH.

Alex Lu said...

Hi cheer

PLENITU's revenue & profit have been sliding over the past few months. We may see further decline in top-line & bottom-line before a recovery set in. This may impact the share price, possibly knocking the price below RM2.00. The stock would be a good buy at RM1.70-1.80.

Anonymous said...

Hi Alex

I just noticed that YTL corp, a major shareholder of YTL power-WB keep reducing its stake from 92% to latest at 86.5%, which i think is main cause of current selling pressure exert on YTL power-WB.

Do you know what is the reason of YTL corp reducing its stake on YTL power-WB aggressively despite its share trading at year lowest level now...

Alex Lu said...

Hi hng

This is a normal feature of YTLPower-WB. If I remember correctly, this happened to over the expired YTLPower-WA. The reason is that YTLPower pays good cash dividend or dividend-in-specie which makes suckers out of the warrant holders.