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Friday, April 22, 2016

AEONCR: Earnings Breakout!

Result Update

For QE28/2/2016, AEONCR's net profit rose 28% q-o-q & 23% y-o-y to RM68 million while revenue rose 5.1% q-o-q or 14.1% y-o-y to RM258 million.

PBT rose 22% y-o-y due to 14.1%-increase in revenue which resulted from 8.5%-growth in total transaction and financing volume. This led to a 27.3%-increase in financing receivables. PBT also benefited from higher other operating income (due to increase in bad debts recovered and AEON Big loyalty programme processing fee). These had more than offset higher ratio of opex to revenue of 58.3% (compared to 57.1% previously; due to higher impairment loss provision on financing receivables); higher NPL ratio of 2.75% compared to 2.14% previously and higher funding cost (though the numbers were stated).


Table: AEONCR's last 8 quarterly results

AEONCR's PBT finally broke above its quarterly high of RM76 million! This earning breakout could be as significant as the earning breakout witnessed in February 2011 (when PBT broke above the RM20 million mark). As you may recalled, AEONCR rallied from RM3.40 in April 2011 to a high of RM18.00. (Note: The original price was RM4.10 before for 1-for-5 bonus issue in 2012.)


Chart 1: AEONCR's last 35 quarterly results

Valuation

AEONCR (closed at RM12.78 today) is now trading at a PE of 8.6 times (based on last 4 quarters' EPS of 149 sen). At this PER, AEONCR is deemed fairly attractive. In addition, it pays a decent dividend with DY of 4.7% (based on last year dividend of 59.45 sen).

Technical Outlook

AEONCR broke above its intermediate downtrend line, RR at RM12.00 in March.


Chart 2: AEONCR's monthly chart as at April 21 (Source: ShareInvestor.com)

With the breakout of the downtrend line, AEONCR is likely to continue its prior uptrend. Its next resistance is from the horizontal line at RM15.00. It might revisit its all-time of RM18.00 if the earnings can sustain at the new level.


Chart 3: AEONCR's monthly chart as at April 21 (Source: ShareInvestor.com)

Conclusion

Based on satisfactory financial performance, fairly attractive valuation and still positive technical outlook, AEONCR is rated as a BUY.

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.

2 comments:

CK said...

Hi Alex,

Have been enjoying your articles and benefited from your FA and TA analysis. Here I would like to say a big thank you to you!

Keep up the good work for the small investors like us.

Thanks again!

Regards,
CK

Alex Lu said...

Hi CK,

Thank you for your kind words.