AEON Credit (ACSM)’s 9MFY13 earnings of RM94.9m were within estimates, representing 75.6% and 79.2% of our and consensus’ full-year forecasts respectively. Revenue and core net profit jumped 34.2% and 39.8% y-o-y, while
expenses grew in tandem at a 31% y-o-y pace. By segment, the group’s growth momentum remained intact, with personal financing surging 116.6%, credit card (+22.6%) and motor easy payment (+29.2%). Although NPLs inched up to 1.81% (1H13: 1.53%), this is no cause for concern as it is within ACSM’s historical average. Maintain NEUTRAL with RM14.00 FV.
Another string of good numbers. ACSM’s 9MFY13 core net profit of RM94.9m was in line with our and consensus’ full-year expectations, making up by 75.6% and 79.2% of both estimates respectively. This was on the back of revenue of RM335.4m, which climbed 34.2% y-o-y. Meanwhile, the group’s 3Q core net profit grew 8.2% q-o-q and 37% y-o-y, while its YTD operating income surged 35%, in tandem with a 45% surge in overall transaction volume. Each segment’s performance was largely within our operating income forecasts, save for personal financing, which continued to exceed expectations with 116.6% y-o-y and 14.4% q-o-q growth. The credit card segment grew 22.6% y-o-y, partly attributed to an expanded credit card base (9MFY13: 165k vs FY12: 160k). The group’s easy payment schemes also exhibited good growth (General Easy Payment: y-o-y +13.7%, Motor Easy Payment: +29.2%) but expenses also went up, by 31% y-o-y, in tandem with income growth.
NPLs ratio close to average. The latest non-performing loans (NPLs) ratio deteriorated to 1.81% during the quarter under review (1HFY13: 1.53%), which is still in line with the historical average. We do not see this as a concern as we believe the group’s NPL ratio had been abnormally low in the preceding quarter due to the Hari Raya seasonal effect. That said, in view of the company’s prudent capital management, we do not see any spike in its NPLs after this quarter.
More provisioning plus recovery of bad debts. There was a RM46.1m improvement in net credit cost YTD (excluding recovery of bad debts amounting to RM16.6m YTD). In the quarter under review, net credit costs rose to RM19.7m from RM13.3m in the preceding quarter as allowances for impairment losses rose by about RM5.8m to RM25.0m while bad debts recovered was largely flat at RM5.3m. This led to ACSM’s net credit cost to receivables inching up 100bps to 3.93%.
Maintain NEUTRAL. We maintain our NEUTRAL call, with FV at RM14.00, pegged to 12.3x on FY14 EPS. As there is some 16% upside to our FV, we are reviewing our call on the stock.
expenses grew in tandem at a 31% y-o-y pace. By segment, the group’s growth momentum remained intact, with personal financing surging 116.6%, credit card (+22.6%) and motor easy payment (+29.2%). Although NPLs inched up to 1.81% (1H13: 1.53%), this is no cause for concern as it is within ACSM’s historical average. Maintain NEUTRAL with RM14.00 FV.
Another string of good numbers. ACSM’s 9MFY13 core net profit of RM94.9m was in line with our and consensus’ full-year expectations, making up by 75.6% and 79.2% of both estimates respectively. This was on the back of revenue of RM335.4m, which climbed 34.2% y-o-y. Meanwhile, the group’s 3Q core net profit grew 8.2% q-o-q and 37% y-o-y, while its YTD operating income surged 35%, in tandem with a 45% surge in overall transaction volume. Each segment’s performance was largely within our operating income forecasts, save for personal financing, which continued to exceed expectations with 116.6% y-o-y and 14.4% q-o-q growth. The credit card segment grew 22.6% y-o-y, partly attributed to an expanded credit card base (9MFY13: 165k vs FY12: 160k). The group’s easy payment schemes also exhibited good growth (General Easy Payment: y-o-y +13.7%, Motor Easy Payment: +29.2%) but expenses also went up, by 31% y-o-y, in tandem with income growth.
NPLs ratio close to average. The latest non-performing loans (NPLs) ratio deteriorated to 1.81% during the quarter under review (1HFY13: 1.53%), which is still in line with the historical average. We do not see this as a concern as we believe the group’s NPL ratio had been abnormally low in the preceding quarter due to the Hari Raya seasonal effect. That said, in view of the company’s prudent capital management, we do not see any spike in its NPLs after this quarter.
More provisioning plus recovery of bad debts. There was a RM46.1m improvement in net credit cost YTD (excluding recovery of bad debts amounting to RM16.6m YTD). In the quarter under review, net credit costs rose to RM19.7m from RM13.3m in the preceding quarter as allowances for impairment losses rose by about RM5.8m to RM25.0m while bad debts recovered was largely flat at RM5.3m. This led to ACSM’s net credit cost to receivables inching up 100bps to 3.93%.
Maintain NEUTRAL. We maintain our NEUTRAL call, with FV at RM14.00, pegged to 12.3x on FY14 EPS. As there is some 16% upside to our FV, we are reviewing our call on the stock.
Rating upgrade on debt facility unlikely to be a boost. On 5 Dec, RAM Ratings upgraded the long-term (LT) rating of ACSM’s MTN programme by a notch to ‘AAA’ with a stable outlook. This was due to a concurrent upgrade of the LT ratings of several of the said debt facility’s guarantors, Mizuho Corporate Bank and Bank of Tokyo Mitsubishi UFJ Ltd. While this is good news to ACSM, we are of the view that the upgrade would have little positive impact on ACSM’s funding costs as the RM400m MTN programme is close to its maturity date of Jan-2014. Assuming that the same guarantors also secure other unrated debt obligations outside the MTN programme, we would expect the total borrowings that will be affected to be small relative to these guarantors’ overall short-term and LT debts. Hence, we do not expect to see a sizeable reduction in ACSM’s funding costs.
Source: OSK
No comments:
Post a Comment