Analysis of Aeon Co. (M) Bhd

Aeon Co. (M) Bhd

A company that involved mainly in issuance of Credit Cards, Easy Payment schemes, Personal Finance schemes, Insurance business and other services. Hereby attached some statement analysis and technical analysis I have done. (Note: The highlighted red data is from unaudited quater report of Aeon Co. (M) Bhd.)

Financial Statement Analysis

Profit margin ratios: Remain steady from 2007 to 2011. I interpret this as this company are not facing fierce competition from close competitors so need no to cut down margin to gain revenues.

ROE: Uptrend.

Overall cost/revenue or EBIT ratios: Overall downtrend. I interpret as effectively and efficiently in maintaining cost. The growth rate of  revenue/ EBIT has surpassed the growth of costs gives such results in reduction of overall cost/revenue or EBIT ratios.

Net receivable/revenue ratio: Maintain at a healthy range. Here shown the ability to grow receivable base in accordance with revenue.

Current borrowing/Non current borrowing ratio: Remain lowest at year 2011. Indicates less aggressive effort by using more long term debt to finance the business which is appropriate as this prevent the risks of the maturity of short term borrowing and unable to reborrow again. 

Debt to equity: Downtrend. The growth of equity base through increase in retained earnings(results from  uptrend net profit yearly) yearly has decrease this ratio year by year as the growth of debt is lesser than equity.

Capex/Net profit ratio: Downtrend. Indicates the company increase in ability to finance its capital expenditure by using lesser portion of the net profit. This also shown that the R&D expenditure are low for the company to remain competitive in the market.

EPS: Uptrend.

With the consistency provided by the company, the predictability of the company's EPS has increased. With the lowest PE ratio of the  lastest 5 years provided by OSK188.com, which is 6.547 multiply with the projected next 10 years EPS, which is 2.3632 (0.5286*1.16155^10), we will able to get a share price of RM15.47. Based on the price you have invested, for example RM7.4, you will able to get average annual growth rate of 7.65% return on capital gain excluding dividend gain. (FV= RM15.47 and PV= RM 7.4) 

Technical Analysis

MACD: Divergence with price. A higher high in price and a lower high in MACD.

EMA: The price has crossed EMA20d after approximately half year.

Price and volume: The price has pull back from the high with moderate volume.

I interpret this as profit taking by some investors in the market after bullish of approximately half a year. Currently, the stock is trading at retrenchment region. 

(Note: This post does not contain a buy or sell order. Any information disclosed above might contain mistakes and any losses incurred from using the information above I will not be liable.)