Friday, June 20, 2014

AEONCR: Bottom-line jumped

Result Update

For QE20/5/2014, AEONCR's net profit increased by 18% q-o-q or 36% y-o-y to RM56 million while revenue increased by 7% q-o-q or 40% y-o-y to RM201 million.

Revenue increased 40% y-o-y due to increase in interest income, profit revenue & finance charges (from RM120.2 million to RM173.2 million) as well as increase in fee income (from RM23.7 million to RM27.7 million). Because of these, AEONCR was able to record a 35%-increase in pre-tax profit, notwithstanding marginally  higher funding cost, higher non-performing loans (NPL) ratio (of 2.18% as at May 2014 compared to 1.57% as at May 2013);  and higher ratio of total operating expenses against revenue (at 54.57% as compared to 54.01% previously).

How AEONCR achieved this improved results since its Total Assets only inched up by 6.3% from RM3.767 billion to RM4.005 billion? With narrower interest margin; higher operating expenses; and a smaller increase in Total Assets - the bulk of which consisted of Financing Receivables which rose 7.6% to RM3.84 billion from RM3.57 billion - how did they do it? Fee income alone does not explain it.

Table: Aeoncr's last 8 quarterly results

Chart 1: Aeoncr's last 28 quarterly results


AEONCR (closed at RM14.92 yesterday) is now trading at a PE of 11.3 times (based on last 4 quarters' EPS of 132 sen). Based on past 2-year historical CAGR of 35%, AEONCR's PEG ratio is about 0.3 times. At this low PEG ratio, AEONCR looks like an attractive growth stock again!

Technical Outlook

After the 6-month correction in 2H13, AEONCR transitioned into sideways movement for the past 4-5 months. If it can break above RM15.40, it may continue with its prior uptrend.

Chart 2: Aeoncr's weekly chart as at June 19, 2014 (Source: Tradesignum)

Chart 3: Aeoncr's weekly chart as at June 19, 2014 (Source: Tradesignum)


Based on good financial performance & attractive valuation, AEONCR is still a good stock for long-term investment. If it can surpass the RM15.40 resistance, AEONCR may rise again.

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.


Happy walker said...

that means we can buy?

Alex Lu said...

Hi Happy walker

AEONCr is a good long-term investment. The uptrend may start on a move above the resistance at RM15.40.