AEON-The Kenanga Prediction

A Value- Buy Ex-All?

Kenanga Investment Research has put out an underperforming call on AEON.

It has downgraded AEON at the current RM 15 level to below RM 14 or to be more exact to RM 13.78 from an earlier Top price (TP) of RM 13.83. This is six sen short of the former price expectation.

Rolling forward to FY15 estimated earnings per share (EPS), it has maintained a price to earnings ratio of 19X for this counter.

The change of heart at Kenanga on AEON was based on the slightly lower profits and higher costs occasioned by increasing operating expenses and higher utility bills  by the group,effected in  Q1F14, particularly with new store openings and promotional costs.

Kenanga said AEON's net profit for the first quarter 2014 (Q1,F14) amounted to RM 46.9 mil which made up 18% of the full year consensus estimates.

However, it has been noted by Kenanga that while  topline growth met the research house's expectations at 25% ,its earnings were slightly below expectations as the first and second quarters were traditionally weaker quarters compared to a stronger 2H as promotional expenses tends to be front-loaded.

On the upside, Kenanga said AEON's longer-term growth prospects appear positive as it plans to open another three new AEON outlets and two MaxValu stores in smaller towns such as in Bukit Mertajam, Taiping and Klebang in the next three years as well as its strategic  intention to branch into Sabah and Sarawak to have a presence there.

As a result of Aeon's expected lowered earnings estimates, Kenanga has reduced the TP slightly to RM 13.78 (from RM 13.83) (ex-bonus and split target price of RM3.44).

My Comments:

The share is now trading at RM 15.00. Unless it goes down further during the cum period, the theoretical price adjustment should be RM 3.75.

If this stock is demand-driven when it goes ex-all, then expect some aggressive spurt buying by pent-up potential buyers who could not get in at the cum RM 15.00 price level.

We will have to wait until June 2 to see what is the market perception of the price of AEON stocks.

Kenanga Research: An Underperform Label for AEON

The Malaysian Daddy Big Bucks

Most of them became super-rich either through licensing, inheritance, monopoly, political connections, proxyships or other considerations.

That they have harness the initial germ of potential business into something of grandeur proportion is their own making.

These then are the daddy big bucks of Malaysia!

Still building their fortune

Dyana-The DAP Gambit

A Promise for tomorrow?

The Teluk Intan Parliamentary By-election will once again be another test-bed for DAP.

Dyana-70- Days Old

On 5 May 2013, the gambit paid particularly well in Johore where they clinched a number of seats at both Federal and State levels from the MCA, Gerakan and UMNO.

Dyana-Her Mother's Daughter

Now the seat of Teluk Intan has become vacant once more because of the death of the seating DAP Parliamentarian, Seah. DAP has decided to once more test this seat with another gambit-field  a novice, Dyana Sofia Daud, the current political secretary of the DAP Advisor, Lim Kit Siang.

A Worthy Adversary for BN

What makes it particularly  interesting is Dyana Sofia is a Malay lawyer wading in a demographic pool of majority non-Malays voters.

Can she move mountains?

Will the gambit pay off again as this is a by-election where the full impact of the Barisan juggernaut election machinery can be put to frightful use?

Beauty and the BN

While the demography is still dominated by an almost equal percentage of Chinese and Malay voters, the Indian voters can now become the king makers.

A  Potential MP in the Making

Can the claim by MIC that they are now in the good books of the Indian voters valid?

Beauty and the Bizz?

With Hindraf out of the government, will this translate to less support for any Barisan candidates by the Indian community?

Looking for a hattrick?

Will the hudud issue brewing in the wind confuse all the three communities that who they vote can be anybody's guess?

On the Campaign Trail

The fight for Teluk Intan is an open field.

Fresh Face-Fresh Hopes for Malaysia?

If the Chinese continue to support DAP, Dyana may stand a chance of a close shave win against the Gerakan President, Dr. Mah Siew Kong who has now joined the State Exco.

May the Force Be With You!

The verdict on 31 May is much awaited.

Dyana-mania