Stock Name: AEONCR
Company Name: AEON CREDIT SERVICE (M) BHD
Research House: OSK
AEON Credit Service (M) Bhd
(June 16, RM3.94)
Maintain buy at RM3.83 with target price of RM4.95: Revenue for 1QFY11 rose 2.9% year-on-year (y-o-y) but dipped -0.2% from the previous quarter.
Revenue growth was largely contributed by the easy payment business for financing consumer durables and motorcycles. This was in line with its growing trade receivables which were higher by 7.8% y-o-y. Revenue from its credit card and personal financing operation was flattish.
Profit before tax was higher by 8.6% y-o-y and lower by -5.4% quarter-on-quarter (q-o-q). It was marginally lower compared to the previous quarter, mainly attributed to higher operating expenses, which spiked up by 5.1% q-o-q and 21.4% y-o-y.
Net profit jumped 8.2% y-o-y but fell -7.7% q-o-q compared to that in the preceding quarter due to a higher effective tax rate of 25.4% versus 23.5% in the last quarter. The rate was higher than the statutory tax rate as certain expenses were not deductible for tax purposes.
As Malaysia recorded a strong 10.1% growth in 1Q GDP, AEON Credit is confident that the continued expansion in domestic and external demand will benefit the company. As it expects to sustain its growth momentum, we are maintaining our buy call on AEON Credit with a target price of RM4.95 (based on a historical two-year PE band of 8.5 times over FY11 EPS). ' OSK Investment Research, June 16
This article appeared in The Edge Financial Daily, June 17, 2010.
Company Name: AEON CREDIT SERVICE (M) BHD
Research House: OSK
AEON Credit Service (M) Bhd
(June 16, RM3.94)
Maintain buy at RM3.83 with target price of RM4.95: Revenue for 1QFY11 rose 2.9% year-on-year (y-o-y) but dipped -0.2% from the previous quarter.
Revenue growth was largely contributed by the easy payment business for financing consumer durables and motorcycles. This was in line with its growing trade receivables which were higher by 7.8% y-o-y. Revenue from its credit card and personal financing operation was flattish.
Profit before tax was higher by 8.6% y-o-y and lower by -5.4% quarter-on-quarter (q-o-q). It was marginally lower compared to the previous quarter, mainly attributed to higher operating expenses, which spiked up by 5.1% q-o-q and 21.4% y-o-y.
Net profit jumped 8.2% y-o-y but fell -7.7% q-o-q compared to that in the preceding quarter due to a higher effective tax rate of 25.4% versus 23.5% in the last quarter. The rate was higher than the statutory tax rate as certain expenses were not deductible for tax purposes.
As Malaysia recorded a strong 10.1% growth in 1Q GDP, AEON Credit is confident that the continued expansion in domestic and external demand will benefit the company. As it expects to sustain its growth momentum, we are maintaining our buy call on AEON Credit with a target price of RM4.95 (based on a historical two-year PE band of 8.5 times over FY11 EPS). ' OSK Investment Research, June 16
This article appeared in The Edge Financial Daily, June 17, 2010.
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