Tuesday, June 18, 2013
AEONCR- benefitting from strong consumer spending
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%).
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.