Aeon Credit beats expectations with growth from M40
KUCHING: Aeon Credit’s results for the first 9 months of financial year 2019 (9MFY19) have come in above expectations at RM267 million, showcasing a +23.0 per cent year over year (y-o-y) growth.
According to MIDF Amanah Investment Bank Bhd ( MIDF Research), the positive deviation was due to the group’s growth in the third quarter of FY19 (3QFY19) almost doubling from 2QFY19.
“We were expecting demand to be more moderate in 3QFY19 compared to the preceding quarter due to the ending of the tax holiday period. This indicates continued strong domestic consumption,” explained the research arm.
The key segments that contributed to the group’s high revenue growth in 3QFY19 are mainly within the realms of Personal, Motorcycle, Credit Card and Auto Financing.
These increased by 122, 57, 30 and 22 per cents year on year (y- o-y) respectively, the research arm said in a briefing note yesterday.
The main reason for strong growths in these segments were attributed to the credit financing group’s initiatives in developing new products and schemes tailored to the M40 customers in Malaysia.
“We view that with a key focus on expanding the M40 market segment while strengthening its B40 segment will bode well for the Group in the long run, in terms of improving customer mix and capturing a bigger market share.
“Additionally, the Group has launched its AEON E-Wallet and E-Money card in November, further providing impetus to grow fee-based income and expand its customer bases by tapping into the existing 6 million users of AEON Group.
“We expect the AEON’s ecosystem to provide a synergistic effect and competitive edge to AEON Credit’s line of businesses, such as opportunities of crossselling, up- selling, as well as integration of various services to serve customers better,” said the research arm.
Besides targeting the M40, Aeon Credit has also been building up presence in India, Indonesia and Philippines markets with a focus on expanding Auto Financing and Personal Financing segments to these regions.
The credit financing company has guided that they would be tailoring approaches to each new region to suit the needs of the local consumers there. For example, in India, the group is launching an instant approval mobile app to make financing more accessible, and in Indonesia and the Philippines, the group is aiming to expand its credit card and tricycle loan financing portfolio to achieve a solid footing in the rather competitive markets.
“We opine that the expansion will be a growth catalyst moving forward to AEON Credit’s bottom line and the group is able to leverage on its strong base in the region.
“Given the current growth trajectory and favourable market conditions such as firm labour market and healthy retail sales, we believe AEON Credit’s earnings is poised to grow at an encouraging rate.
“We opine that the expansion into more populous emerging countries will provide the catalyst for future revenue growth. We also view that there will be synergies with its overseas operations as it could leverage on its experience and technologies.
“This will transform the Group into a more efficient organisation and achieve long-term cost savings.”