For QE20/11/2014, AEONCR's net profit increased by 2% q-o-q or 12% y-o-y to RM48 million while revenue inched higher by 3% q-o-q or 21% y-o-y to RM216 million. Pre-tax profit improved 15.9% y-o-y due to 29.5%-increase in financing receivables (brought on by 3.6%-growth in financing volume) plus 64.6%-increase in other op. incomes (due to increase in bad debts recovered and AEON Big loyalty program processing fee). These had more than offset the increase in non-performing loans (NPL) ratio from 2.02% to 3.07% and increase in the ratio of total operating expenses against revenue from 58.7% to 60.4%. and higher average funding cost (though no number was given). The Company’s effective tax rate was higher than the statutory tax rate as certain expenses are not deductible for tax purpose.
Table: Aeoncr's last 8 quarterly results
Chart 1: Aeoncr's last 30 quarterly results
Valuation
AEONCR (closed at RM11.04 last Friday) is now trading at a PE of 8 times (based on last 4 quarters' EPS of 138 sen). At this PE, AEONCR is deemed very attractive. Based on earning CAGR of about 20%, the stock's PEG ratio is at an attractive 0.4 time.
Technical Outlook
AEONCR's uptrend has reversed, with lower troughs and lower peaks. Immediate support is at the psychological RM10.00 level.
Chart 2: Aeoncr's monthly chart as at Dec 19, 2014 (Source: ShareInvestor.com)
Conclusion
Based on good financial performance & attractive valuation, AEONCR is still a good stock for long-term investment. However, AEONCR will likely to slide further as its technical outlook has turned negative.
Note:
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.
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