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Author: sparta   |   Latest post: Wed, 31 Mar 2021, 2:41 PM

 

MY OLD GEMS GOING TO SKYROCKET AGAIN!!!

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Date: 03 March 2021

STOCK  : AEON CO. (M) BHD 
 
 
 
 
 
 
AEON - It's a BUY SIGNAL. 
 
 
"GET YOUR TICKET AGAIN BEFORE IT'S TOO LATE" - Kim
 
 
- The pattern finally received a confirmation because the prices crossed above the confirmation level which was at 1.20. 
- Valid average buying price stands now at 1.23.
- Candlestick has a white body and its close is above the confirmation level. 
- The bullish pattern that was previously identified is finally confirmed and a BUY signal is generated. 
- The trend is also bullish and perhaps it is the right time to participate in bullish fervor. 
- The market is telling you about a new profit. Do not miss this bullish opportunity.
 
On 10th December 2020, I had wrote and mentioned for entry this stock. It already shot up to second target price at RM1.06 & RM1.20
 
 
KIM'S TARGET PRICE
 
The TP has been upgraded as follows:-
 
Kim's Target Price:
 
TP1: RM1.50 (immediate)
TP2: RM1.80
 
Warrant: AEON-C2
 
(Time-Frame : Refer KGT)
 

 

KIM'S VIEW

 

It is no secret that things are getting tougher in the Malaysian retail space, with the latest data from Retail Group Malaysia pointing to a mere 1.8% sales growth in 3Q2019 against 6.7% in the same period last year.

1. AEON's is trading below my estimate of fair value (RM2.70)

2. AEON's will be able to benefit from the recovery of the economy and consumer spending. On top of that, valuation appears much more attractive now. Although consumers increasingly shop online especially since the pandemic, I think that offline shopping will continue to have its place with an experiential offering that online shopping cannot displace

4. AEON's forecast earnings growth (29.7% per year) is above the savings rate (3.7%).

5AEON's is transforming its shopping malls to adapt to changing consumer demand. In a Nov 29 note, it pointed out that AEON’s valuations are undemanding in view of its growth potential and status as the largest shariah-compliant mall operator in Malaysia.

6. AEON's operates 35 outlets, 28 malls, 74 Wellness pharmacies, 42 Daiso stores and six MaxValu Prime supermarkets.

7. AEON's has experienced slower footfall due to the COVID-19 outbreak, but the situation is gradually normalising. Government is expected to introduce a stimulus package to drive consumer spending.

8. AEON's is in good position to benefit. Earnings growth moving forward would be driven by modernised store formats and product offerings to capture changing consumer demand, while earnings drag from the MFRS 16 adjustment would finally wear off in FY20.

9. AEON's reported FY19 core net profit ofMYR109.3m (-13.8% YoY), which met consensus’ expectations but missed due to overly optimistic sales growth assumptions. Base on pre-MFRS 16 basis, FY19 core net profit would have grown by 1.9% YoY. Post-results, trimmed FY20-21F net profit by 8-9% to factor in more prudent sales growth assumptions. 

10. AEON's Management observed that the COVID19 outbreak has resulted in slower footfall to shopping malls, but the situation is gradually improving. The stimulus packages that the Government is introducing are expected to aid consumer spending, benefiting AEON given its well-established presence in Malaysia.
 
11. AEON's strategy to modernise store formats and offerings to capture the changing consumer demand will continue to drive sustainable growth. So the negative effect from MFRS 16 adjustment (-MYR20m in FY19) would wear off from FY20 onwards. So the earnings comparison would be like-for-like, reflecting the effective operational growth. 

 

 

BUSINESS PROFILE
 
Aeon Co.(M) Bhd. operates a chain of departmental stores and supermarkets in Malaysia. The company sells clothing, food, household products, and other merchandises. It also operates shopping centers, pharmacies, shopping malls, and flat price shops. In addition, the company offers financial and credit services; and property management services to malls. As of December 31, 2019, it operated a total of 34 departmental stores cum supermarkets; and managed and operated a total of 28 shopping malls. The company was formerly known as Jaya Jusco Stores Bhd. and changed its name to Aeon Co. (M) Bhd. in September 2004. The company was founded in 1984 and is headquartered in Kuala Lumpur, Malaysia. Aeon Co. (M) Bhd. is a subsidiary of Aeon Co., Ltd.
 
 
 
TOP SHAREHOLDERS
 
51.68% - Aeon Co., Ltd. 725,640,000 MYR696.6m
13.65% - Employees Provident Fund of Malaysia 191,666,400 MYR184.0m
4.99%   - Standard Life Aberdeen plc 69,999,100 MYR67.2m
4.92%   - Permodalan Nasional Berhad 69,028,000 MYR66.3m
2.72%   - Kumpulan Wang Persaraan 38,220,300 MYR36.7m
2.28%   - DBS Group Holdings Limited 32,035,300 MYR30.8m
1.35%   - CIMB Group Holdings Berhad18,948,800 MYR18.2m
 
 
 
FINANCIAL
 
 
 
 
 
 
 

 

LETS FLY & LETS ROCK!

 


Lastly, don't forget to click on our telegram link above and join us. Let us give you the latest update on the stock market and our group development. We hope you enjoy reading our blogs and give us your support.  

 
If you would like to know more about Kim's Group Trader (KGT) and Kim's Investment Club (KIC). You may reach out to us via link above. 
 
 
Best Regards,
 
KIM 
 
 

Disclaimers: The research, information and financial opinions expressed in this article are purely for information and educational purpose only. We do not make any recommendation for the intention of trading purposes nor is it an advice to trade. Although best efforts are made to ensure that all information is accurate and up to date, occasionally errors and misprints may occur which are unintentional. It would help if you did not rely upon the material and information. We will not be liable for any false, inaccurate, incomplete information and losses or damages suffered from your action. It would be best if you did your own research to make your personal investment decisions wisely or consult your investment advisor.

 

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