Stock Name: AEONCR
Company Name: AEON CREDIT SERVICE (M) BHD
Research House: OSK
AEON Credit Services (M) Bhd
(June 15, RM5.16)
Maintain buy at RM4.90 with fair value of RM5.40: 1QFY11 revenue and net profit rose 22.4% and 45.5% year-on-year (y-o-y), mainly bolstered by: i) strong revenue growth in personal financing, which soared 78% y-o-y due to relentless telemarketing efforts; ii) a 57% y-o-y jump in other income as bad debts recovery surged 45%; and iii) higher revenue from the credit card segment (+55%) owing to the company's aggressive cardholder recruitment efforts and enhancement in card benefits.
Revenue at AEON Credit's core business of easy payment schemes, which contributed 66.6% of the total revenue, rose 11.3% y-o-y while that from general easy payment (GEP) and motorcycle easy payment (MEP) went up by 13% and 10% respectively. This was in tandem with growth in the company's financing receivables, which were higher by 7.6% year-to-date (YTD). Meanwhile, the transaction and financing volume for 1Q of RM373.2 million was 63% higher y-o-y.
Financing receivables (+7.6%) grew healthily across all segments while receivables from the credit card segment jumped 18.8% YTD from RM245 million to RM291 million.
In the personal financing segment, receivables grew 16.8% YTD to RM118 million versus RM101 million previously while general and motor easy payment receivables ticked up 1.2% and 4.1% respectively.
Non-performing loans eased to 1.77% from 1.83% in FY11 on better risk and portfolio management control while its CAR stood at 23.8% (FY11: 24%).
Going forward, the company plans to expand the range of products under its easy payment and personal financing schemes. It also aims to extend financing to small businesses for the purchase of office assets and equipment.
We believe AEON Credit is on track to deliver decent results by diversifying its revenue stream. We maintain our 'buy' call on AEON Credit, with a fair value of RM5.40, pegged to its historical two-year PE band of nine times based on FY12 EPS. ' OSK Research, June 15
This article appeared in The Edge Financial Daily, June 16, 2011.
Company Name: AEON CREDIT SERVICE (M) BHD
Research House: OSK
AEON Credit Services (M) Bhd
(June 15, RM5.16)
Maintain buy at RM4.90 with fair value of RM5.40: 1QFY11 revenue and net profit rose 22.4% and 45.5% year-on-year (y-o-y), mainly bolstered by: i) strong revenue growth in personal financing, which soared 78% y-o-y due to relentless telemarketing efforts; ii) a 57% y-o-y jump in other income as bad debts recovery surged 45%; and iii) higher revenue from the credit card segment (+55%) owing to the company's aggressive cardholder recruitment efforts and enhancement in card benefits.
Revenue at AEON Credit's core business of easy payment schemes, which contributed 66.6% of the total revenue, rose 11.3% y-o-y while that from general easy payment (GEP) and motorcycle easy payment (MEP) went up by 13% and 10% respectively. This was in tandem with growth in the company's financing receivables, which were higher by 7.6% year-to-date (YTD). Meanwhile, the transaction and financing volume for 1Q of RM373.2 million was 63% higher y-o-y.
Financing receivables (+7.6%) grew healthily across all segments while receivables from the credit card segment jumped 18.8% YTD from RM245 million to RM291 million.
In the personal financing segment, receivables grew 16.8% YTD to RM118 million versus RM101 million previously while general and motor easy payment receivables ticked up 1.2% and 4.1% respectively.
Non-performing loans eased to 1.77% from 1.83% in FY11 on better risk and portfolio management control while its CAR stood at 23.8% (FY11: 24%).
Going forward, the company plans to expand the range of products under its easy payment and personal financing schemes. It also aims to extend financing to small businesses for the purchase of office assets and equipment.
We believe AEON Credit is on track to deliver decent results by diversifying its revenue stream. We maintain our 'buy' call on AEON Credit, with a fair value of RM5.40, pegged to its historical two-year PE band of nine times based on FY12 EPS. ' OSK Research, June 15
This article appeared in The Edge Financial Daily, June 16, 2011.
No comments:
Post a Comment