AEON Credit Service (M) Berhad

AEON Credit Service (M) Berhad

Business Description:
AEON Credit Service (M) Berhad (AEON Credit) is a Malaysia-based company engaged in the provision of easy payment schemes, personal financing schemes and issuance of credit cards under the brand names of Visa and MasterCard. The personal financing schemes and easy payment schemes are based on Islamic principles.

AEON Credit has three regional offices, 31 branches and service centers located in shopping centers and towns and a network of more than 4,300 participating merchant outlets. 

As of February 20, 2010, AEON Credit had an approximately 113,000 principal credit cards in circulation. During the fiscal year ended February 20, 2010, the immediate and ultimate holding companies were AEON Credit Service Co., Ltd. and AEON Co., Ltd., respectively.

Current Price (14/1/2011): 3.90
2010 Sales 210,144,000
Employees: 1,500
Market Cap: 468,000,000
Shares Outstanding: 120,000,000
Closely Held Shares: 69,827,900

Announcement Date		Financial Yr. End		Qtr	Period End		Revenue RM '000		Profit/Lost RM'000		EPS		Amended
21-Dec-10		20-Feb-11		Other	20-Nov-10		56,097		16,041		13.37		-
21-Sep-10		20-Feb-11		Other	20-Aug-10		53,769		14,783		12.32		-
15-Jun-10		20-Feb-11		Other	20-May-10		53,025		13,202		11.00		-
19-Apr-10		20-Feb-10		Other	20-Feb-10		53,136		14,305		11.92		-

ttm-EPS = 48.61 sen
ttm-PE = 3.90 / 0.4861 = 8.0 x

DY = 0.235 / 3.90 = 6.03%


Year       DPS      EPS
2006        Not Listed
2007       2.8       16.4
2008       9.5       27.8
2009     15.1       40.6
2010    16.9        45.2
2011    18.0E     49.0E


Historical
5 Yr  
PE range  10.3 - 16.1
DY range  3.9% - 2.6%

Capital Changes

2007   1 to 2 Share Split

Oct 1, 2010	0.115 Dividend
Jun 25, 2010	0.12 Dividend
Oct 2, 2009	0.105 Dividend
Jun 26, 2009	0.1134 Dividend
Oct 10, 2008	0.0876 Dividend
Jun 30, 2008	0.0744 Dividend
Jan 2, 2008	0.0135 Dividend
* Close price adjusted for dividends and splits.

FYE                                  2010         2009          2008          2007        2006
RM’000 
Income Statement
Revenue                        210,144      186,919      151,797      116,043      69,119
Profit before tax              72,226      65,930        45,750        27,545     1 9,293
Profit after tax                 54,275      48,757        33,394        19,702      13,506

Net EPS (sen)*                 45.23         40.63        32.65           25.00       19.10
Gross DPS (sen)               22.50         20.10        12.84             6.84         5.33
Net assets per share (RM)  2.09           1.80           1.51             1.06          5.2


* Note: Earnings per share has been calculated based on weighted average number of ordinary shares outstanding in the respective year.  Comparative earnings per share and dividends per share information have been restated after adjusting for the bonus issue and share split undertaken by the Company in December 2006

Balance Sheet                                           2010              2009 
Assets
Plant and equipment                               22,047            24,820
Investment                                               1,797              1,797
Receivables                                         360,704          323,325
Total non-current assets                       384,548          349,942

Receivables, deposits
   and prepayments                              622,484          557,718
Cash and bank balances                          3,161              2,462
Total current assets                              625,645          560,180

Total assets                                      1,010,193           910,122

Equity
Share capital                                         60,000             60,000
Share premium                                      56,147             56,147
Retained earnings                                134,315             99,696
Total equity attributable to
shareholders of the Company              250,462            215,843

Liabilities

Borrowings (unsecured)                      460,041            358,529
Deferred tax liabilities                              1,782                2,386
Total non-current liabilities                   461,823            360,915

Payables and accruals                           44,453               50,035
Borrowings (unsecured)                       246,631            276,279
Taxation                                                  6,824               7,050
Total current liabilities                       297,908             333,364

Total liabilities                                      759,731             694,279

Total equity and liabilities                   1,010,193            910,122

http://announcements.bursamalaysia.com/EDMS/subweb.nsf/7f04516f8098680348256c6f0017a6bf/f233541e9528412c4825772d00389b6d/$FILE/AEONCR-Cover%20to%20Page%2032%20(2.5MB).pdf


Chairman’s Statement
AEON Credit will explore further on how to give more
rewards to our customers and create more synergies
with our business partners.

Introduction
On behalf of the Board of Directors, I am pleased to
present AEON Credit Service (M) Berhad (AEON Credit)
Annual Report and Audited Financial Statements for
the financial year ended 20 February 2010.
2009 has been a challenging year for the company.
Malaysia did not escape the effects of the global
economic downturn with the Malaysian economy
contracting in the first three quarters in 2009. With the
positive Gross Domestic Product (GDP) growth of 4.5
per cent in the fourth quarter of 2009, consumer and
business confidence have returned.  The government’s
introduction of financial stimulus packages has helped
avoid a recession sweeping through niche areas of the
economy.
Fortunately the Company achieved yet another year of
continuing improvement in its financial performance.
This is despite the challenging operating environment
and the uncertainties in the global financial market in
2009.
I am delighted to report that for the financial year
ended 20 February 2010, the Company’s net profit
increased by 11.3% to RM54.26 million from a net
profit of RM48.76 million from the previous financial
year. This resulted in improvement of earnings per share
from 40.63 sen in FYE2009 to 45.23 sen for FYE2010


Prospects
Prospects for 2010 remain bright. With economic
growth, the financial sector is expected to thrive and
domestic demand, particularly consumer spending,
is expected to be higher. These positive conditions
give us ample opportunities to grow our business. We
will continue to focus on improving our products and
services. We will explore further on how to give more
rewards to our customers and create more synergies
with our business partners.
With the collaboration with AEON CO. (M) BHD.
(AEON CO.) on the new AEON card, the Company
aims to maximize the business synergy of both
companies. The card was exclusively introduced for
JUSCO shoppers, focuses on loyalty points and more
rewards for the customers. It combines JUSCO credit 
card issued by the Company with the J CARD issued
by AEON CO. as a “2 in 1” card which comes with
exclusive benefits and privileges to cardmembers as
well as other lifestyle benefits and rewards.
The partnership that we have with AEON CO. on
the new AEON card will offer more value to J CARD
members. In addition, the perks, benefits and the
support given by more than 500 privilege shopping 
partners will firmly put the card in a leading position
within the credit card market and we are hoping that
this will help in boosting our credit cards revenue in
the near future.
I am pleased to announce that as of 18 March 2010
we have merged our Corporate Social Responsibility
activities with AEON CO. (M) BHD. under the AEON
Foundation. With this, we shall work hand in hand with
AEON CO. (M) BHD. to organize charitable activities
that are beneficial to the Malaysian society.
As part of our expansion plans and in order to capture
wider market segments, we have recently opened a 
new branch at Temerloh, Pahang and a service centre 
at AEON Bandaraya Melaka Shopping Centre. The
Company will find ways to cater for the wider local
area needs and provide convenience to its consumers.
We will focus on promoting our consumer financing
products by carrying out more promotional activities
both in urban and suburban areas.
The establishment of new branches, service centres
and marketing offices nationwide are in line with our
plans to capture larger market segments and our 
continued focus to achieve robust growth.


Dividend
The Board of Directors has proposed a final dividend
of 12.00 sen per share less 25% income tax, which
would amount to final net dividend payment of
RM10.8 million. This would result in total dividend 
payout ratio of 37.3% of the net profit for FYE2010,
including interim dividends paid in the course of the
year. The Company had paid out net final dividends of
8.51 sen per share for last financial year, representing
an increase of 54.5% from the prerious year.

Acknowledgement
On behalf of the Board of Directors,  I would like to
take this opportunity to thank Mr. Naruhito Kuroda
who relinquished his position as Managing Director
of the Company on 20 April 2010 to assume his new
position in AEON Credit Service Ltd, Japan. I wish
to express our sincere gratitude to him for his years
of service and contributions to the Company. At the
same time, I wish to welcome Mr. Yasuhiro Kasai who
has been appointed as the new Managing Director of
the Company on 20 April 2010 and Mr. Tomoaki Saito
who was appointed as the Director of the Company on
19 April 2010.
On behalf of the Board of Directors, I wish to thank
my fellow Board members, the Management and all
the staff members for their dedication and efforts to
the Company.
We also would like to thank all our valued shareholders,
business associates, bankers, government authorities
and most of all, our valued customers for their
continuous support to the Company over the years.

Thank you.
Dato’ Abdullah Bin Mohd Yusof
Chairman



Managing Director’s Operations Review


Our focus will be on new business
expansion and new services.





Financial Review


AEON Credit Service (M) Berhad was able to
achieve growth in operations and results despite the
challenging business environment during the year
under review. Nevertheless, the economic slowdown
affected certain segments of the Company’s customer
base and resulted in reduced annual growth rate 
for the Company’s consumer financing business in
comparison with the preceding year.
The Company’s recorded higher revenue of RM210.14 
million for the year, representing growth of 12.4% 
from RM186.92 million total revenue in the previous 
year. The improved results were due to the growth
in consumer financing achieved from the Company’s
Easy Payment Schemes, credit card and other products 
during the year and the expansion of service and
business areas as well as retail merchants’ network.
Meanwhile, profit before tax grew by 9.6% to RM72.23 
million from RM65.93 million last financial year. 
Earnings per share correspondingly increased to 45.23 
sen from 40.63 sen in the previous year.
The financing receivables as at end of FYE2010 was 
RM946.27 million, representing growth of 8.4% 
from RM872.86 million in the previous financial year. 
Meanwhile, non-performing loans (NPL) ratio was
1.80% as at February 2010 compared to 1.88% in
February 2009.
The financial year also saw the Company’s maiden fund
raising through an asset backed securitisation (ABS)
funding programme for RM150 million to tap the debt
capital market, as part of the Company’s strategy to
diversify funding sources in sustaining future business 
growth. 


Operational Review
Card Business
During the first three quarters of the financial year,
growth in credit cards in circulation was achieved
through aggressive marketing promotions and the 
launching of the new AEON Card in September 2009.
The new launching combines the JUSCO credit card 
issued by AEON Credit with the J CARD privilege card 
issued by AEON CO. (M) BHD. as a “2 in 1” card.  It
comes with various exclusive benefits and privileges
to card members which include enhanced ‘Double
Reward Points’ to cardmembers for spending at
JUSCO Stores/ Pasar Raya MaxValu nationwide.
However, the introduction of government service 
tax for principal and supplementary credit cards as 
announced in October 2009 has affected the credit 
and charge card issuers in Malaysia, including AEON 
Credit. The industry faced cancellation of existing
credit cards by consumers who wished to reduce the
number of cards held as well as greater challenge in
issuance of new credit cards.
Various measures taken by AEON Credit in response
to introduction of the service tax included offer of 
benefits and “retention package” promotion to retain 
cardholders. Majority of card cancellations were by 
“non-active” card members, thus not affecting revenue 
significantly. As at end of the financial year, total
principal credit cards in circulation were approximately
113,000


Easy Payment and Personal Financing Business
Easy Payment Schemes continue to be the major 
contributor to the profit growth of the Company.
During the year, AEON Credit focused on strategic
marketing efforts in a challenging market environment
through merchant development, promotions, roadshow
activities etc, both in urban and suburban areas. The
various promotions include a promotion in conjunction
with the AEON Credit Group achieving issuance of 20
million credit cards in Asia and numerous nationwide
and local area promotions to boost the sales volume,
including promotions in collaboration with merchants
and major suppliers. The Company continues to 
expand its network of participating merchants and 
chain stores, which offer Easy Payment schemes to 
customers nationwide. 
Through AEON-Biz, a financing scheme for small 
companies to purchase office automation equipment 
such as computers and photocopying machines, the
Company continues to cater for the demand from
SME business segment. Towards the end of the
financial year, the Company has expanded its “Used 
Car Easy Payment” scheme which provides financing
to customers who are seeking for second-hand
car financing to East Malaysia and certain states in
Peninsular Malaysia.

Further Business Expansion
The Company expanded its network of branches and
service centres to 31 locations nationwide to bring
convenience to its customers, including the latest
service centre at AEON Bandaraya Melaka Shopping
Centre and a branch at Temerloh. Six marketing 
offices were also established nationwide at Segamat,
Sitiawan, Taiping, Sungai Petani, Sandakan and Sibu to
cater for local area merchant service needs.

Future Plans
With the improvement in the Malaysian economy,
AEON Credit expects to maintain growth in 
performance in a scenario of improved consumer and 
business confidence.  
The Company is looking at ways to increase its card
base and with the new AEON card that offers double
J CARD points for every Ringgit spent at any JUSCO
stores nationwide, it targets to attract more shoppers
and J CARD members. Besides, with the conversion of
all card face to one standard brand name – “AEON”,
we are able to create awareness and recognition of 
our products and achieve new growth in our cards 
recruitment. The standard brand name will also enable
AEON CO (M) BHD. and AEON Credit Service (M)
Berhad to realise greater synergies in the Malaysian
card business market and send message to our potential
customers on the combined benefits offered.
The Company will also expand on its business 
associates and affiliated merchant network and boost 
the uptake of its Easy Payment Scheme products. As
part of the Company’s expansion plan, it will embark on
services via website for the convenience of customers,
business partners and merchants in 2010/2011. We
will introduce more convenient functions & services to
our customer via a new AEON Web Portal and also 
improve operational efficiency by introducing online 
easy payment application submission for merchants.
The company will also continue its collaboration with
AEON CO (M) BHD. on improving the AEON Loyalty
program by taking responsibilities on the development
of new participating merchants as well as outsourcing
of reward point management system and operations.
The new AEON Loyalty program with more attractive
benefits & privileges is scheduled to be launched by
the AEON Group in early 2011.
Our wide network of merchants and the increasing 
number of JUSCO stores in Malaysia have also given 
us opportunity to broaden our card business scope to 
include credit card transactions acquiring business, 
which is targeted to be launched by 2011.
AEON Credit expects to maintain profitability 
growth in the prevailing competitive environment 
through improvement in operational efficiency and 
productivity.

Acknowledgement
I would like to thank the Board of Directors, employees,
our shareholders, customers and business associates
for the confidence and continued support for the
Company. I would also like to express my gratefulness
and sincere appreciation to the management and
staff of the Company for the continuous support and
dedication, which are important for the future growth
of the Company.

Yours sincerely,
Yasuhiro Kasai
Managing Director

http://announcements.bursamalaysia.com/EDMS/subweb.nsf/7f04516f8098680348256c6f0017a6bf/f233541e9528412c4825772d00389b6d/$FILE/AEONCR-Page%2033%20to%20ProxyForm%20(1.6MB).pdf

DIVIDENDS 
Since the end of the previous financial year, the Company paid:
i) a final ordinary dividend of 11.34 sen per ordinary share less tax at 25% totalling RM10,206,000 (8.51 sen
net per ordinary share) in respect of the year ended 20 February 2009 on 14 July 2009; and
ii) an interim ordinary dividend of 10.50 sen per ordinary share less tax at 25% totalling RM9,450,000 (7.88 sen net per ordinary share) in respect of the financial year ended 20 February 2010 on 20 October 2009.
The final ordinary dividend recommended by the Directors in respect of the year ended 20 February 2010 is 12.00 sen per ordinary share less tax at 25% totalling RM10,800,000 (9.00 sen net per ordinary share)



LIST OF THIRTY (30) LARGEST SHAREHOLDERS
As at 30 April 2010
 
No.          Names            No of Shares            % of Shares held 
1 AEON CREDIT SERVICE CO., LTD 68,040,000 56.70
2 HSBC NOMINEES (ASING) SDN BHD 4,301,000 3.58
HSBC -FS I FOR APOLLO ASIA FUND LTD
3 MAYBAN NOMINEES (TEMPATAN) SDN BHD 2,789,100 2.32
MAYBAN TRUSTEES BERHAD FOR SAHAM AMANAH SABAH (ACC 2-940410)
4 AEON CO. (M) BHD 2,580,000 2.15
5 MAYBAN SECURITIES NOMINEES (ASING) SDN BHD 1,800,000 1.50
AEON THANA  SINSAP (THAILAND) PUBLIC COMPANY LIMITED
6 AEON CREDIT SERVICE (ASIA) COMPANY LIMITED  1,800,000 1.50
7 MAYBAN NOMINEES (TEMPATAN) SDN BHD 1,800,000 1.50
ABERDEEN ASSET MANAGEMENT SDN BHD FOR KUMPULAN WANG PERSARAAN
(DIPERBADANKAN) (FD 1 - 280305)
8 SIA TONG HOCK  1,418,800 1.18
9 AMSEC NOMINEES (TEMPATAN) SDN BHD 1,292,100 1.08
AMTRUSTEE BERHAD FOR PACIFIC PEARL FUND (UT- PM-PPF)
10 HSBC NOMINEES (TEMPATAN) SDN BHD  1,135,900 0.95
HSBC (M) TRUSTEE BHD FOR HWANGDBS SELECT OPPORTUNITY FUND (3969)
11 AMSEC NOMINEES (TEMPATAN) SDN BHD 1,070,000 0.89
ABERDEEN ASSET MANAGEMENT SDN BHD FOR TENAGA NASIONAL BERHAD
RETIREMENT BENEFIT TRUST FUND (FM-ABERDEEN)
12 HSBC NOMINEES (ASING) SDN BHD  1,000,000 0.83
EXEMPT AN FOR BNP PARIBAS SECURITIES SERVICES (SINGAPORE- SGD)
13 MAYBAN NOMINEES (TEMPATAN) SDN BHD 900,000 0.75
ABERDEEN ASSET MANAGEMENT SDN BHD FOR THE
EMPLOYEES’ PROVIDENT FUND BOARD (250416)
14 DATO’ CHONG WENG CHOY 800,500 0.67
15 MAYBAN NOMINEES (TEMPATAN) SDN BHD 797,900 0.66
MAYBAN TRUSTEES BERHAD FOR CIMB- PRINCIPAL SMALL CAP FUND ( 240218)
16 LEONG SOO KENG 717,000 0.60
17 PUBLIC NOMINEES (TEMPATAN) SDN BHD  560,000 0.47
PLEDGED SECURITIES ACCOUNT FOR KONG GOON KHING (E- BTR)
18 WONG CHEE LING 548,000 0.46
19 NARUHITO KURODA  530,000 0.44
20 CARTABAN NOMINEES (ASING) SDN BHD  500,000 0.42
EXEMPT AN FOR BANK SARASIN -RABO (ASIA ) LIMITED (AC CLIENT FRGN)
21 AMANAHRAYA TRUSTEES BERHAD  486,300 0.41
PUBLIC SMALLCAP FUND
22 HSBC NOMINEES (ASING) SDN BHD  481,700 0.40
EXEMPT AN FOR JPMORGAN CHASE BANK,NATIONAL ASSOCIATION (NORGES BK LEND)
23 MOTOYA OKADA 480,000 0.40
24 YOSHIKI MORI 480,000 0.40
25 AMANAH SAHAM MARA BERHAD 473,100 0.39
26 LEONG LI NAR  460,600 0.38
27 AMANAHRAYA TRUSTEES BERHAD  400,000 0.33
ASM PREMIER FUND
28 HDM NOMINEES (ASING) SDN BHD 391,800 0.33
EXEMPT AN FOR UOB KAY HIAN (HONG KONG) LIMITED (CLIENTS)
29 HSBC NOMINEES (ASING) SDN BHD  360,000 0.30
AA NOMS SVS HK FOR TSE, KWONG
30 HSBC NOMINEES (TEMPATAN) SDN BHD  320,000 0.27
HSBC (M) TRUSTEE BHD FOR HWANGDBS ASIA QUANTUM FUND (4579)

TOTAL  98,713,800 82.2



http://www.reuters.com/finance/stocks/overview?symbol=ANCR.KL