AEONCR (5139) - AEONCR: A strong recovery in earning
For QE20/2/2015, AEONCR's net profit increased by 15% q-o-q or 16% y-o-y to RM55 million while revenue inched higher by 5% q-o-q or 20% y-o-y to RM226 million. Pre-tax profit improved 14.6% y-o-y due to 27.3%-increase in financing receivables (brought on by 8.5%-growth in financing volume) plus 37.3%-increase in other operating incomes (due to increase in bad debts recovered and AEON Big loyalty programme processing fee). These had more than offset the increase in non-performing loans (NPL) ratio from 2.14% to 2.75% and increase in the ratio of total operating expenses against revenue from 57.1% to 58.3%. as well as higher average funding cost (though no number was given).
Table: Aeoncr's last 8 quarterly results
From Chart 1 below, we can see that the increased revenue coupled with a rebound in the profit margin had pushed the bottom-line near the high of QE20/5/2014.
Chart 1: Aeoncr's last 31 quarterly results
Valuation
AEONCR (closed at RM14.48 last Friday) is now trading at a PE of 10.2 times (based on last 4 quarters' EPS of 141.5 sen). With PEG ratio at 0.6 time (based on growth rate of 16% last year, AEONCR is still deemed very attractive.
Technical Outlook
As noted in the previous post, AEONCR's uptrend had ended when its share price broke below the RM12.50 mark. Since then, the stock has rebounded above that mark. AEONCR is still moving within the flag formation, ABCD where the upside is capped at RM17.50. A breakout of the flag formation at RM17.50 would be the signal for the continuation of the prior uptrend. Current technical outlook for AEONCR is neutral.
Chart 2: Aeoncr's monthly chart as at Apr 20, 2015 (Source: ShareInvestor.com)
Conclusion
Based on good financial performance & attractive valuation, AEONCR is still a good stock for long-term investment.
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.
