MIDF positive on Aeon Credit outlook
KUALA LUMPUR: MIDF Research is positive on Aeon Credit Service Bhd’s business outlook, with continuous sales growth in the first half of next year and strategic product offerings to continually expand the M40 (middle-income group) market segment.
It said Aeon Credit recorded first-half net profit which was 22.2 per cent higher year-on-year to RM179.9 million, translating to 57.8 per cent of MIDF’s and 55.6 per cent consensus estimates.
It said the rise in the second quarter net profit was attributable to growth in interest income of RM289.8 million, fee income of RM42.3 million, and other operating income of RM48.3 million.
The other operating income primarily comprised bad debts recovered and commission income from sale of insurance related products and loyalty programme processing fees.
MIDF said Aeon Credit’s M40 segment now accounts for 30 per cent of the business since it started focusing on the segment two years ago. It said growth was mainly accelerated by the introduction of Aeon Platinum Credit Card and Personal Financing Scheme with risk-based pricing.
However, MIDF said while it remains optimistic on the prospect of Aeon Credit, the run-up in share price indicated that the positives have been priced in.
MIDF has reverted its call to “neutral” from the previous “buy” with an unchanged target price of RM15.40.