Stock Name: AEONCR
Company Name: AEON CREDIT SERVICE (M) BHD
Research House: HWANGDBS
KUALA LUMPUR: Hwang DBS Vickers Research has downgraded'' AEON Credit Service to Hold as growth slows with larger profit base.
It said on Wednesday, March 9 it had cut the target price to to RM4.20, pegged to 7x FY12F EPS.
'FY12F-13F trimmed by 6-7% on slower loan growth.'' Share price supported by cheap 6.5x FY12F PE and projected 5.4% dividend yield,' it said.
HDBSVR said since its listing in December 2007, Aeon Credit's group net profit had been expanding at 41% CAGR. But growth will start to slow because of a larger earnings base (FY10-FY13F CAGR of 14%).
'This has prompted us to change our valuation metric from PEG to PE. Applying a 3-year historical average PE of 7x on FY12F EPS, we derive a lower target price of RM4.20 (from RM4.60),' it said.
HDBSVR said downside risk is limited by its undemanding PE valuation and decent FY12F net dividend yield of 5.4%. Downgrade to Hold as the stock ' which has risen 5.1% YTD ' offers only 13% total potential return (including dividends).
''
Company Name: AEON CREDIT SERVICE (M) BHD
Research House: HWANGDBS
KUALA LUMPUR: Hwang DBS Vickers Research has downgraded'' AEON Credit Service to Hold as growth slows with larger profit base.
It said on Wednesday, March 9 it had cut the target price to to RM4.20, pegged to 7x FY12F EPS.
'FY12F-13F trimmed by 6-7% on slower loan growth.'' Share price supported by cheap 6.5x FY12F PE and projected 5.4% dividend yield,' it said.
HDBSVR said since its listing in December 2007, Aeon Credit's group net profit had been expanding at 41% CAGR. But growth will start to slow because of a larger earnings base (FY10-FY13F CAGR of 14%).
'This has prompted us to change our valuation metric from PEG to PE. Applying a 3-year historical average PE of 7x on FY12F EPS, we derive a lower target price of RM4.20 (from RM4.60),' it said.
HDBSVR said downside risk is limited by its undemanding PE valuation and decent FY12F net dividend yield of 5.4%. Downgrade to Hold as the stock ' which has risen 5.1% YTD ' offers only 13% total potential return (including dividends).
''
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