Last December, we wrote about Aeon Co. (M) Bhd. and you may access the article here.
In general, I think Aeon is an above-average business but the company
has been facing certain hiccups which resulted in about 38% drop in net
profit for the financial year 2015 (FY2015). I decided to attend this
AGM as I believed there would be many questions revolving around this
area of concerns.
Below are my key takeaways from the AGM:
1) Mr. Poh
Ying Loo, executive director of Aeon, began its presentation with a
title of "2015 was Tough Business". Subsidy removal, rising cost of
living, GST implementation, toll/fares hike, weakening of Ringgit,
Political uncertainties and lower consumer spending were highlighted.
2) Mr.
Poh identified four challenges which are expected to confront Aeon in
2016: consumer sentiment remains weak, rising cost of living,
competition & industry changes and business operation costs.
3) The management has planned to increase the number of AEON stores and malls up to 32 and 26 respectively.
4)
For the property management segment, Aeon had a total of 24 malls, with
6 in the northern region, 10 in central region and 8 in southern
region.
5) The management has blamed softer retail market and higher operation costs which resulted in lower net profit for FY2015.
6) Occupancy rate was about 90% by the end of 2015.
7)
There were 8 stores with positive growths, 3 stores experienced flat
growths, and 13 stores faced negative growths. Besides, Aeon has added
new stores in Bukit Mertajam, Taiping, Quill City and Klebang.
8)
An investor raised a concern about the stolen trolleys and joked that
he could easily find 10-20 of them in his housing area if I'm not
mistaken. The CEO mentioned that they already had plans to change all
the steel made trolleys into plastic based which are more expensive but
less attractive for the thieves. Sounds weird to me...
AEON (6599) - 8 Things I Learned From AEON's AGM 2015
http://www.valueinvestingstock.com/#!8-Things-I-Learned-From-AEONs-AGM-2015/cour/573d483b0cf20dbb28b9f205
