Tuesday, June 18, 2013

AEONCR- benefitting from strong consumer spending

Result Update

For QE20/5/2013, AEONCR's net profit increased by 6% q-o-q or 47% y-o-y to RM41 million while revenue increased by 9% q-o-q or 42% y-o-y to RM144 million. The improved financial performance was mainly due to "growth in receivables and increased financing transaction volume in the period contributing to higher net operating profit".

Table: Aeoncr's last 8 quarterly results

Chart 1: Aeoncr's last 24 quarterly results

Indian Associate to start Operation

AEONCR has a 20% equity interest in AEON Credit Service India Private Limited (‘ACSI’). In February 2013, ACSI has obtained the license from the Reserve Bank of India to conduct Non-Banking Financial activities in India.

AEONCR is one of the three overseas bases for AEON Financial Co, of Japan. The other overseas bases are Thailand & Hong Kong. As an overseas base, AEONCR supports the Indonesian & Indian operations. The planned expansion into Turkey and Bangladesh will fall under the purview of the Malaysian base. It would be interesting to see whether AEONCR would have a small stake in the Turkey and/or Bangladeshi operation, like the Indian operation. AEONCR does not have any equity stake in the Indonesian operation. For more details of the AEON Financial Co's operation, go here. 


AEONCR (at RM17.44 as at 11:00am) is now trading at a PE of 16.9 times (based on last 4 quarters' EPS of 103.50 sen). Despite the high PE ratio, AEONCR's PEG ratio is still attractive at 0.4 time (arrived at by dividing PE with average CAGR of 45%).

Technical Outlook

AEONCR is still in an uptrend. In a sharp correction, the 30-week SMA line would act as the support and may be a good point  of entry to the stock.

Chart 2: Aeoncr's weekly chart as at June 18, 2013_9.40am (Source: Quickcharts)

Based on satisfactory financial performance, attractive valuation & positive technical outlook, AEONCR is rated a good stock for long-term investment.  

In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, AEONCR.


hahn said...

may i hv ur opinion pls ~
among public bank , aeoncredit , mbsb , which one will hv better profit for long term investment.
i m looking for a finiancial stock for my portfolio , or any suggestion ? pls guide :)

Alex Lu said...

Hi hahn

Which is better? public bank , aeoncredit , mbsb?

You can see that I hardly produce a list of best stocks to invest. The reason is simple; it is tough enough to call a buy on a stock. To rank it would demand a constant attention to the few stocks that you cover. You can see that among the analysts in research houses because they cover specific sectors. For me, I cover the whole market and that level of attention to stocks is too taxing. The only sector that I monitor very closely is rubber glove and I have a ranking for that sector.

If I have to choose between your three stocks, I would say my choice would be determined by my market outlook or risk appetite at that point of time. the same should apply to you. If you are risk averse or having a negative outlook for the market, you would choose PBBank. If you are not risk averse or having a bullish outlook for the market, your choice would be either AEONCR or MBSB.

Good luck!