Aeon continues steady pace
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Aeon continues steady pace
Aeon continues steady pace |
Business & Markets 2014 | |
Written by Maybank Investment Bank Bhd | |
Thursday, 18 September 2014 09:47 Aeon Co (M) Bhd (Sept 17, RM3.88) Maintain “hold” with target price (TP) of RM3.65: The weakness in Aeon’s second quarter financial year 2014 (2QFY14) results was largely a function of factors such as higher advertising and promotion (A&P) incurred for its 30th anniversary celebrations, higher electricity costs after the average 17% tariff hike in January 2014, store renovation expenses and opening costs associated with its Bukit Mertajam store. Generally, sales have held up with same-store sales growth (SSSG) of 4% year-on-year (y-o-y) in 2Q14 (up 3% y-o-y in 1Q14), aided in large part by new store openings. Consumer demand, however, has tapered off particularly for softlines, and Aeon has taken increased promotional efforts to draw in the crowds. Third quarter financial year 2014 (3QFY14) results are likely to remain seasonally weak and renovation costs are likely to still feature, but to a lesser extent. Fourth quarter financial year 2014 (4QFY14), however, should see a strong pick-up y-o-y, particularly since 4QFY13 was a weak quarter. Property management income has thus far sustained the momentum and will continue to do so given the steady pace of new store openings. Taking into account the potential for a stronger 4Q14, we have raised our FY14 net profit forecast by 5% while trimming our fFY15 forecast by 1% to account for slower retail sales next year. — Maybank Investment Bank Bhd, Sept 17
This article first appeared in The Edge Financial Daily, on September 18, 2014.[/size] |
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