Aeon Credit Q4 earnings up 22.6% to RM47.82m

Wednesday April 16, 2014


KUALA LUMPUR: Aeon Credit Service (M) Bhd’s earnings rose 22.6% to RM47.82mil in the fourth quarter ended Feb 20, 2014 compared with RM39mil a year ago due to higher fee income, including from sales of insurance products, point management fee and higher recovery of bad debts.


It said on Wednesday its revenue rose 42.7% to RM187.99mil from RM131.68mil. Its earnings per share were 33.21 sen. It recommended a dividend of 24 sen per share.

In the financial year ended Feb 20, 2014, its earnings rose 30.7% to RM175.35mil from RM134.12mil in the previous corresponding period. Its revenue saw a 44% increase to RM672.76mil from RM467.13mil.


http://www.thestar.com.my/Business/Business-News/2014/04/16/Aeon-Credit-Q4-earnings-up-to-RM47pt82m/

AEON Credit sees continuous strong growth in two divisions

Posted on April 13, 2013, Saturday

KUCHING: AEON Credit Services (M) Bhd (AEON Credit) continues to see promising loans growth premised on its strong personal financing sector as well as vehicle easy payments division.

An analyst with HwangDBS Vickers Research Sdn Bhd (HwangDBS Research) expected AEON Credit’s earnings and loan growth to remain strong albeit at a more moderate pace.

“We also expect the other segments to grow at a more moderate pace in financial year 2014 forecast (FY14F): vehicle easy payments at 30 per cent (versus 57 per cent in FY13F), general easy payments at 11 per cent (versus 22 per cent in FY13F) and credit cards at 15 per cent (versus 18 per cent in FY13F),” she detailed in her report on the group yesterday.

The analyst highlighted key drivers being personal loans and vehicle easy payments as AEON Credit continued to fill the financing needs of customers in the low to middle income segment.

“We believe loan growth of more 20 per cent should be sustainable for the next two years given AEON Credit’s relatively low base,” she added.

“Its total loan book of RM2.3 billion is relatively small compared to the banking sector’s RM1.1 trillion loans outstanding.”

Looking at the personal loans division, the analyst explained that outside the banking system, consumers’ financing needs are usually filled by non-bank financial institutions (NBFIs) such as AEON Credit, Malaysia Building Society Bhd, RCE Capital Bhd and development banks.

“Notably, Bank Negara Malaysia (BNM) reported lending by NBFIs to the households grew 23.4 per cent in 2012, much higher than the banking sector’s 11.6 per cent,” she elaborated.

“We believe NBFIs like ASCM filled the financing gaps after BNM introduced tighter retail lending rules for the banks in January 2012.

“Going forward, branch expansion will be an avenue to widen AEON Credit’s distribution network for personal loans.

“We believe salary revision among the low income group could drive higher spending power and thus trigger more financing or refinancing needs.”

Looking at vehicle easy payments, the analyst noted that AEON Credit targeted a different market from banks in the automotive segment.

“The biggest portion of the vehicle easy payment business is motorcycle financing.

“We understand banks do not usually focus on this space (except for bigger capacity bikes) as the loan size is very small; typically RM6,000 to RM7,000,” she explained.

This type of financing is being categorised as an easy payment scheme and is not governed by the Hire Purchase Act.

The key advantage is faster turnaround time for processing and approval, while almost all the loans are secured by the vehicles financed.

“Aeon Credit is also growing the loan book of the bigger capacity bikes (targeted at higher-end customers) to diversify its customer profile and to improve yields.

“There is also an opportunity to improve yields as AEON Credit takes on higher risks to finance used cars and motorcycles, but this segment is still small (less than 10 per cent of vehicle easy payment loan book),” she concluded.

Read more: http://www.theborneopost.com/2013/04/13/aeon-credit-sees-continuous-strong-growth-in-two-divisions/#ixzz2Ut61OJGJ

Aeon Credit to issue rights, bonus shares?

Posted on 16 April 2013 - 05:38am

Kang Siew Li
sunbiz@thesundaily.com

PETALING JAYA (April 16, 2013): Non-bank financial institution Aeon Credit Service (M) Bhd is expected to seek clearance from its board of directors at a meeting on Thursday for a capital raising exercise via a rights issue as well as to undertake a bonus issue to reward its shareholders, according to sources close to the situation.

The company is due to release its full-year results for the financial year ended Feb 20, 2013 (FY13) on the same day.

Analysts told SunBiz they are not surprised by Aeon Credit's proposed cash-call as management has indicated its plan to raise the company's capital base for a while now.

"The main purpose of the equity raising is to boost its capital adequacy ratio to 25% from 18% now, which is nearing Bank Negara Malaysia's minimum level of 16%," said an analyst at a local research firm.

"Aeon Credit may also raise debt to fund future growth. In its annual report, the company had said it would be comfortable with a gearing ratio of 3-5 times and it is now less than 4 times," he added.

A Kenanga Research analyst said the rights issue will support Aeon Credit's loan growth plans for the next two to three years, while the bonus issue will help to improve the stock's liquidity and attract more retail participation.

He noted while the rights issue may result in a dilution of Aeon Credit's share value, the stock will remain attractive to investors post the exercise due to its healthy financial position and sound profitability, and a downward adjustment from its existing high share price.

Aeon Credit closed up 8 sen at RM14.32 yesterday, with 96,700 shares traded.

In a report dated April 12, 2013, HwangDBS Vickers Research Sdn Bhd said a capital call by Aeon Credit is probable since its capital ratio has fallen to 19% in November 2012 and it has always kept a higher buffer of above 20% than Bank Negara's 16% requirement.

"We are positive on the potential fund raising as this will shore up its balance sheet to support future growth, while the enlarged share base could improve trading liquidity," it said.

The research firm also sees the company raising debt to fund growth and refinance some of its medium-term notes which are expiring in the next 12 months, estimated to be RM400 million.

"In our scenario analysis, we assume Aeon Credit could do a rights issue on the basis of 1-for-9 at an indicative issue price of RM12.90 (based on 10% discount to a theoretical ex-rights price of RM14.30), and raise RM210 million to bring its capital ratio to 25%.

"We estimate the enlarged share base (+11%) would dilute earnings per share and return on equity by 5% and 7 percentage points respectively in FY14," it said.

HwangDBS is expecting Aeon Credit to deliver record net profit of RM129 million in FY13, up 35% from a year earlier, with the loan book growing 54% to RM2.3 billion.

"The key drivers remain personal loans and vehicle easy payments as Aeon Credit fills the financing needs of customers in the low to middle income segment," it said, maintaining a "hold" call on the stock with a RM16.10 target price.

http://www.thesundaily.my/news/662692

Personal finance lending grows

KUALA LUMPUR:  Personal financing expanded by 30% last year, the fastest growth over the last three years, mainly due to lending by nonbank financial institutions (NBFI), said BNM in its 2012 Financial Stability and Payment Systems report yesterday.

Although the majority of borrowers were those earning less than RM3,000 per month, BNM said the credit risk had been well mitigated as about 80% of the borrowers have stable jobs and a regular salary with loan repayments deducted automatically at source.

“These developments are nonetheless being closely monitored particularly in light of recent innovations observed on product offerings by the NBFI,” it said in a statement released in conjunction with its 2012
BNM annual report.

NBFIs accounted for 12% of total credit to the nation’s household sector. But collectively, these institutions provided 57% of personal financing credit to households and such credit has been increasing significantly in recent years.

Last year, overall credit on all facilities extended by the three largest NBFIs expanded at a faster rate of 23.1%. The strong credit expansion was primarily driven by the personal financing activities which grew 30%
last year.

In 2010, personal financing grew 28.7% while in 2011 it recorded a growth of 25.1%. According to the statement, as at the end of last year, the banking system’s gross impaired loans ratio improved to 1.5% for the household portfolio, 2.9% for large businesses and 3% for small and medium enterprises.

“Following the implementation of the Guidelines on Responsible Financing during the year, banks are also more thorough in assessing borrower affordability with more prudent buffers allocated in the computation of debt service ratios, improved processes and documentation in income verification,” said BNM in its report.

The bank’s risk-weighted capital ratio and core capital ratio stood at 15.2% and 13.4% as at end of last year with financial buffers in excess of RM80 billion.

The banking system’s total capital ratio for financial institution was at 14.5% as at end of January this year.
Domestic implementation of the Basel III global regulatory reform package will significantly raise the level and quality of banks’regulatory capital starting January this year until December 2018.

This article first appeared in The Edge Financial Daily, on March 21, 2013



Business & Markets 2013
Written by Zatil Husna of theedgemalaysia.com
Thursday, 21 March 2013

Aeon Credit: Managing Director's Operations Review

MANAGING DIRECTOR’S OPERATIONS REVIEW

Financial Review (FYE 20.2.2012)

AEON Credit Service (M) Berhad has recorded stronger annual business growth in the year ended 20 February 2012 compared to the previous year, from successful business strategies deployed under an environment of favourable market conditions.

Total revenue for the financial year of RM344.27 million represented growth of 27.7% from previous year revenue of RM269.61 million. This is attributable to growth in financing receivables achieved for credit card operations, product Easy Payment schemes and Personal Financing scheme during the year. Total transaction and financing volume of RM1.66 billion for the year represented growth of 40.9% from the previous year. Profit before tax (PBT) recorded for the year of RM128.06 million 50.6% higher than RM 85.02 million PBT in the previous year. 

The financing receivables as at end of FYE2012 was RM1.49 billion, representing growth of 34.5% from RM1.11 billion in the previous financial year. Meanwhile, non-performing loans (NPL) ratio was 1.80% as at February 2012 compared to 1.83% in February 2011, reflecting satisfactory asset quality management in spite of the sharp growth in business and receivables in the year.

Increase in annual operating costs in FYE 2012 by 17.3% is in tandem with business growth and lower than revenue growth of 27.7%. The Company was able to record improved margin of profit before tax against revenue for the year of 37.2% compared to 31.5% in the previous year due to improved cost efficiency from sharp growth in receivables in the year, lower ratio of net impairment loss charge for the financial year against total financing receivables and reduced overhead costs for depreciation and rental expenses. Average funding cost in February 2012 was lower marginally compared to February 2011 due to new funding at competitive rates in the year from various sources.

Other operating income recorded of RM24.90 million for the year was 44.4% higher than previous year. This is attributable to continued growth in fee income, especially from sales of insurance products, and increase in bad debts recovered.

Operational Review

Card Business

While 2011 was a challenging year for credit card issuers in Malaysia to increase their customer base, the Company’s  principal credit cards in circulation as at February 2012 had increased by 11.3% from the previous year based on database marketing efforts, various promotions carried out and enhancement of card benefits.  Total credit card transactions volume of RM716.61 million represents growth of 52.2% against the previous year, realised from both increase in card member base as well as higher average card usage amount.

Meanwhile, the company introduced “EPF kiosks” located at all branches and AEON shopping malls to attract increased walk-in consumer traffic and enhance opportunities for sales and cross selling of financial service products offered by the Company including credit cards and Personal Financing. The company will strive to convert more J-Card members  to AEON credit card members and enhance card benefits in collaboration with AEON Co. (M) Berhad to be a preferred credit card among its customers in FYE2013.

Easy Payment and Personal Financing Business

The Easy Payment and Personal Financing schemes saw a 33.3% annual growth in financing volume to RM940.12 million for the year under review. Database marketing activities and attractive financing rates during the year served to increase transaction volume significantly for personal financing operations, which registered 103.2% annual growth in receivables against the previous year.   

Further, the Company continued to obtain increasing volume of consumer credit applications from the growing base of merchants for the consumer durables and motorcycle financing operations during the year. The company continued to focus on growth in business for larger financing amounts from the middle income consumers, both for purchase of consumer goods and motor vehicles  as well as personal financing needs.

Future Plans

The Company anticipates to be able to sustain growth in its financial performance in the financial year ending 20 February 2013 based on its business strategies despite the lower economic growth rate forecast for 2012.

For the credit card operations, the Company intends to issue new cards targeted at the higher income group consumers in FYE2013 while strengthening card recruitment activities both at AEON shopping malls as well as through other marketing channels. 

Meanwhile, Easy Payment scheme operations will be expanded to provide equipment and other asset financing to small businesses . The Company shall expand the consumer durables financing scheme to offer financing for personal services utilised by consumers.  Financing for higher cubic capacity motorcycles and expansion of pre-owned  car financing will continue to be an area of focus as well as merchant network expansion. 

Additional branches and service centres shall be opened nationwide by the Company in FYE 2013, to facilitate greater market reach to consumers, especially for personal financing scheme operations and providing customer service.

Further, the Company shall pursue growth in fee revenue from services in FYE2013, including sale of insurance products, to complement income generation from receivables. The Company will focus on nationwide business expansion while taking necessary action towards sustainable business growth, maintaining prudent risk management policies and healthy asset quality.  

Acknowledgement

I would like to thank our customers, business partners and shareholders for your continued support and confidence in the Company. I would also like to express my sincere appreciation to the Board of Directors, management and staff of the Company for your contributions and dedication, which are essential for the future growth of the Company.

Yours sincerely,

Yasuhiro Kasai

Managing Director

http://announcements.bursamalaysia.com/EDMS/subweb.nsf/all/CCBFAB89E43259EA48257A0C0033D466/$File/AEONCR-AnnualReport2012%20(3.3MB).pdf

Annual Report 2012

Aeon Credit

Sales Analysis.
AEON Credit Service (M) Berhad reported sales of 344.27 million Malaysian Ringgits (US$112.43 million) for the fiscal year ending February of 2012. This represents an increase of 27.7% versus 2011, when the company's sales were 269.56 million Malaysian Ringgits. Sales at AEON Credit Service (M) Berhad have increased during each of the previous five years (and since 2007, sales have increased a total of 197%).

AEON CREDIT Feb-07 Feb-11 Change CAGR millions millions Equity 104.17 282.22 170.92% 28.30% LT Assets 192.88 25.93 -86.56% -39.45% Current Assets 378.61 1148.11 203.24% 31.96% LT Liabilities 270.41 596.55 120.61% 21.87% Current Liabilities 196.91 295.28 49.96% 10.66% Sales 116.04 269.61 132.34% 23.46% Earnings 19.7 63.43 221.98% 33.95% Interest expense 18.02 32.61 80.97% 15.98% D/E 4.06 2.95 -27.34% ROE  18.91% 22.48% 18.88% Number of shares (m) 120 120 0.00% Market cap 469.2 1054.8 124.81% P/E 23.82 16.63 -30.18% Earnings Yield 4.20% 6.01% 43.22% BV/Share (RM) 0.87 2.35 DPO ratio (historical) 31.40% Dividend Yield range 4.8%-3.1%

Stock Data:

Current Price (9/14/2012): 10.70 (Figures in Malaysian Ringgits)

Recent Stock Performance:
1 Week -0.6%
4 Weeks 22.3%
13 Weeks 11.5%
52 Weeks 183.4%


Market Cap: 1,540,800,000
 Fiscal Yr Ends: February
 Shares Outstanding: 144,000,000
 Share Type: Ordinary
 Closely Held Shares: 87,446,280

Aeon Credit - Return on Retained Earnings

Aeon Credit
Year		DPS		EPS		Retained EPS
2002
2003
2004
2005
2006
2007		2.8		16.4		13.6
2008		9.5		27.8		18.3
2009		15.1		40.6		25.5
2010		16.9		45.2		28.3
2011		19.9		52.9		33
2012
Total		64.2		182.9		118.7
From	2007	to	2011
EPS increase (sen)				36.5
DPO				35%
Return on retained earnings				31%
(Figures are in sens)

Aeon Credit profit up 17pc to RM63m

Aeon Credit profit up 17pc to RM63m
Published: 2011/04/19


AEON Credit Service (M) Bhd's net profit for the financial year ended Feb 20, 2011 increased by 16.8 percent to RM63.43 million from the RM54.27 million recorded the previous year.

In a statement today, AEON Credit said revenue for the year stood at RM269.61 million, representing a growth of 8.5 percent over the previous year.

It attributed the uptrend to growth in transaction volume for credit card operations as well as easy payment financing schemes.

Total transaction and financing volume of RM1.176 billion for the year, represented a 24 per cent growth from the previous year, while total credit cards in circulation increased by 27 per cent to 143,000 as at February 2011.

Meanwhile, the non-performing loans ratio stood at 1.83 per cent as at February compared to 1.80 per cent recorded in the same period last year. - BERNAMA



Read more: Aeon Credit profit up 17pc to RM63m http://www.btimes.com.my/Current_News/BTIMES/articles/20110419194455/Article/index_html#ixzz1JykFeWIT

AEON Credit: Buy, target price RM4.95 (9.4.2010)

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

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