Friday, 1 March 2013

AEON CO. (M) - FY12 above estimates


Period  4Q12/FY12

Actual vs. Expectations    The FY12 net profit (NP) of RM232.9m was above the consensus estimates and ours, making up 114.5% and 104.3% of the street’s estimate and our forecast of RM203.4 and RM223.2m respectively.

Dividends  A first and final dividend of 17.25 sen and a special tax exempt dividend of 1 sen has been proposed, which totalled up to a NDPS of 18.25 sen, implying a yield of 1.4%.

Key Result Highlights  QoQ, the 4Q12 revenue improved by 3.3% to RM872.8m as compared to 3Q12 due mainly to higher sales from the retailing and property management services segments. The retailing segment revenue increased 3.2% to RM758.0m QoQ due to the contributions from new stores and a higher number of discount days as well as loyalty members’ sales days. Meanwhile, the property management services segment rose 4.0% to RM114.8m due to the contribution from its new shopping centres. In tandem with this, the NP also surged 66.6% to RM85.6m as well as on the back of lower operating expenses.

 YoY, the FY12 revenue increased by 9.1% to RM3.3b due to the better growth rate from the retail segment (8.2%) and property management segment (15.3%). The better performance of the former was due mainly to the contributions from new stores that were opened during the year as well as the higher number of loyalty card members’ sales days. Meanwhile, the strong growth from the latter was attributable to the contribution from its new shopping centres as well as a higher occupancy rate and higher rental rates from its tenants revamp. Hence, the FY12 NP increased in tandem by 8.9% to RM212.8m and also due to lower operating expenses as well.

Outlook  We remain positive on the company’s future prospect as there will be more new outlet openings in FY13-14 as well as the refurbishment of the existing ones.

 Despite the challenging global economy, the domestic consumption is expected to be sustainable due to the various stimulus measures initiated by the government. The group has also seen continue its efforts to establish itself as a global brand name via various marketingstrategies and to continue its drive for a higher process efficiency and productivity.

Change to Forecasts  While better sales were achieved in FY12, we believe the FY13 should be even stronger due to the stimulus measures initiated by the government. We have nudged our earnings estimates upwards slightly by 0.9% and 1.0% to RM254.1m and RM270.4m for FY13 and FY14 respectively.

Rating Maintain UNDERPERFORM

Valuation  We have revised our TP higher to RM12.00 (from RM11.30 previously), based on a higher PER of 17.9x (from 15.8x previously) after adjusting for the stock’s latest running 5-year average PER.

Risks  A slowdown in the global economy, which will cut the aspurchasing power of consumers.

Source: Kenanga

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