Positive trajectory continues for Aeon Credit Service
KUCHING: Earnings of AEON Credit Service ( M) Bhd (Aeon Credit) for the first quarter of financial year 2018 (1DFY18) were within expectations of MIDF Amanah Investment Bank Bhd ( MIDF Research).
The credit service firm’s 1QFY18 net profit of RM75.8 million came within the firm and consensus’ expectations at 26.9 and 27.8 per cent of respective full year estimates.
The strong 1QFY18 net profit was due to increased top line and other operating income.
“The increase in 1QFY18’s net profit was mainly attributable to growth in interest income of RM266.6 million and fee income of RM35.7 million coming from higher rate of bad debt recovery,” it said in a note yesterday.
“F inanc ing receivables expanded significantly, by 17.4 per cent year on year to RM6.7 billion. Meanwhi le, interest income experienced strong growth driven by the expansion of the company’s loan book, which saw doubledigit growth amounting to RM6.7 billion for 1QFY18.
The positive earnings was also reflected by Aeon Credit’s improvement in operating expenses, MIDF Research added, which registered at 58.2 per cent against revenue compared with 60.5 per cent in the corresponding quarter in 1QFY17.
“We are maintaining our earnings forecast as the results came in within estimates.
“We are positive by the strong growth in Aeon Credit’s earnings. We believe that the positive growth trajectory will continue in FY18, given the optimistic prospect in Gross Domestic Product performance this year.
“Hence, we maintain our buy call for the stock with an unchanged TP of RM21.40 per share.”