Hot Stock AEON Credit rises 7.7% after stellar FY14 results, 24 sen dividend

by **Cals** Fri 18 Apr 2014, 02:26

Hot Stock AEON Credit rises 7.7% after stellar FY14 results, 24 sen dividend

Business & Markets 2014

Written by Jeffrey Tan of theedgemalaysia.com

Thursday, 17 April 2014 11:31

KUALA LUMPUR (Apr 17): AEON Credit Service (M) Bhd rose as much as 7.7% after the non-bank financial institution posted record net profit and revenue for the financial year ended Feb 20, 2014 (FY14).

Yesterday, AEON Credit announced a 31% jump in net profit to RM175.35 million in FY14 from RM134.13 million the previous year, driven by strong performance in its easy payment operations while growth was also noted for its credit card division.

Earnings per share for FY14 improved to 121.77 sen from 102.84 sen in FY13.

The company also declared a high final dividend of 24 sen per share.

At 11.14 am today, AEON Credit rose 52 sen or 3.6% to RM14.80. The top gainer saw trades of 43,600 shares.

Analysts are optimistic of AEON Credit’s positive performance.

In a note, Kenanga Research said the full-year net profit was above its expectations and that of the consensus, making up 112% and 109% of these earnings estimates respectively.

The Kenanga research team has upgraded AEON Credit to ‘outperform’ from ‘market perform’ as the stock offers good upside. It has also upgraded Aeon Credit’s target price to RM17.80, from RM17.20 previously.

Kenanga said: “We still expect AEON Credit to continue its growth trajectory. The group is still likely to deliver strong earnings growth rates of 34.9% and 26.9% for FY15 and FY16 respectively.”

Kenanga said it has raised FY15 earnings estimates to RM236. 6 million, up 34.9% year-on-year, and introduced FY16 earnings estimate of RM300.2 million, up 26.9% year-on-year.

Separately, RHB Investment Bank Bhd noted that AEON Credit’s financing products, especially its vehicle easy payment, charted strong growth that defied the slowdown in household lending.

RHB IB’s analyst Kong Ho Meng said he has raised the fair value for AEON Credit to RM18.70 from RM18.10, and maintained a ‘buy’ call for the stock.

“Although we are more conservative on receivables growth, we make no changes to our earnings forecasts at this juncture,” Kong said.