Period 1Q12
Actual vs.
Expectations
The 1Q12 net profit (NP) of RM37.6m was below the
street’s estimate and our forecast of RM218.0m (17%) and RM223.2m (17%) respectively.
Dividends No dividend was declared this quarter.
Key Result Highlights
YoY, the 1Q12 revenue increased 8% on the back
of a better growth rate from the retail segment (+7.5% YoY) and property management
services (+12.9% YoY). The retail segment saw new stores openings and a higher number
of loyalty members’ sales day in the quarter. Meanwhile, the strong growth from
property management services was attributable to a new shopping centre that was
opened end of last year, higher rental rates and the benefits from tenants
revamp in some of its existing shopping centres.
However, the NP declined 19% YoY as in 1Q11, there
was actually a one-off recognition of net proceeds from an insurance claim of
RM10.9m on a fire incident in one of its shopping centres in Melaka.
The 1Q12 sales performance declined QoQ by 6%
as the company received higher sales and year-end trading rebates in 4Q11 as
well as due to the early arrival of the Chinese New Year festival this year.
The NP dropped a higher 47% QoQ due to the higher initial costs associated with
new stores opening in the quarter.
Outlook Given the rising shopping outlets in the Klang
Valley, the company is now aiming on areas outside the Klang Valley in the hope
of capturing a different group of middle-income earners. As such, following the
opening of its outlets in Ipoh recently (March 2012), we are expecting another one
in Seri Manjung, Perak by the end of this year and three more outlets in
FY13-14.
Change to Forecasts
We are maintaining our earnings estimates of RM223.2m
and RM251.8m for FY12-13E for AEON.
Rating
Downgraded to MARKET PERFORM
Valuation As the current share price of RM9.65 has met
our target price of RM9.54, we are downgrading our rating on the stock from an
OUTPERFORM to a MARKET PERFORM with an unchanged TP of RM9.54, which is based
on a Fwd PER of 15.0x over its FY12 EPS of 63.6 sen.
Risks A slowdown in the global economy, which would cut
down the purchasing power of consumers.
Source: Kenanga
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