Published: 2010/04/09
OSK Research has initiated coverage on consumer finance company AEON Credit Service (M) Bhd (5139) with a "buy" call, based on its solid track record, low non-performing loans (NPL) ratio, growing customer base and attractive dividend yield.
The stock last closed at RM4.12, suggesting a 20 per cent upside from the research firm's target price of RM4.95.
The company provides easy payment schemes and is a relatively new player in the credit card market.
OSK noted that AEON's share price performance has been lacklustre ever since the government announced a service tax on credit cards in October last year.
This, it believes, should not be cause for concern as AEON's credit card business contributes less than 12 per cent of total income.
"We believe its earnings growth momentum is on track and there could be a re-rating on the stock when investors realise that its fundamentals are intact despite the imposition of the service tax," OSK said in a report on April 7.
Overall, the group is poised for organic growth on the back of a bigger clientele, improved consumer spending and rising demand for micro-credit financing, it said.
OSK expects AEON's net profit to increase to RM53.3 million in the year ended February 20 this year and RM69.8 million in the next year, from RM48.8 million last year.
Read more: AEON Credit: Buy, target price RM4.95 http://www.btimes.com.my/Current_News/BTIMES/articles/eksa/Article/#ixzz1BrDfw7Rc
OSK Research has initiated coverage on consumer finance company AEON Credit Service (M) Bhd (5139) with a "buy" call, based on its solid track record, low non-performing loans (NPL) ratio, growing customer base and attractive dividend yield.
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The stock last closed at RM4.12, suggesting a 20 per cent upside from the research firm's target price of RM4.95.
The company provides easy payment schemes and is a relatively new player in the credit card market.
OSK noted that AEON's share price performance has been lacklustre ever since the government announced a service tax on credit cards in October last year.
This, it believes, should not be cause for concern as AEON's credit card business contributes less than 12 per cent of total income.
"We believe its earnings growth momentum is on track and there could be a re-rating on the stock when investors realise that its fundamentals are intact despite the imposition of the service tax," OSK said in a report on April 7.
Overall, the group is poised for organic growth on the back of a bigger clientele, improved consumer spending and rising demand for micro-credit financing, it said.
OSK expects AEON's net profit to increase to RM53.3 million in the year ended February 20 this year and RM69.8 million in the next year, from RM48.8 million last year.
Read more: AEON Credit: Buy, target price RM4.95 http://www.btimes.com.my/Current_News/BTIMES/articles/eksa/Article/#ixzz1BrDfw7Rc
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