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Saturday, December 21, 2019

Affin Hwang maintains 'buy' on Aeon Credit, TP at RM17.20

ANALYST REPORTS
Friday, 20 Dec 20198:55 AM MYT

KUALA LUMPUR: Affin Hwang Capital research maintained its buy rating on AEON CREDIT SERVICE (M) BHD with an unchanged target price of RM17.20 as its 9MFY20 results came within expectations.

For the coming quarter, the research house is expecting a strong performance on the back of normalisation in credit cost in addition to the interest income contribution from the robust receivables growth in 3QFY20.

To recap, Aeon Credit's 9MFY20 profit after tax fell 24.3% year-on-year to RM194.4mil as weaker results in 2Q dragged down year-to-date earnings.

There was a more positive result in 3Q with profit after tax rising 70.8% quarter-on-quarter on the back of lower impairment provisions.

"Receivables growth has been at a robust 20.7% y-o-y, while year-to-date at 15.4% (on track to meet our FY20 growth target of 20% yoy)," said Affin Hwang.

It said the key drivers were from motorcycle, auto and personal financing loans.

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