No surprises. The company's 1HFY12 revenue came in higher by 9.3% at RM1,538.1m while core net profit leaped by 17.7% to RM75.9m (excluding net insurance gain of RM10.9m from 1HFY11). The YTD earnings make up 38% of our FY12 forecast but we
deem the results in line as 2H is seasonally stronger. The decent performance was underpinned by better revenue from the retailing and property management services segments. Revenue for retailing surged by 8.5% y-o-y from RM1,226.4m to RM1,330.3m, thanks to contributions from its new stores, the reopening of another store which had been temporarily closed for upgrading, and a higher number of loyalty card members' sales days held. Likewise, property management services' sales registered a 14.9% y-o-y growth, largely driven by the opening of new shopping centres and store revamps amongst the tenants in some of its existing shopping centres.

Flattish margin. EBIT margin trended lower marginally by 0.1% y-o-y to 6.7%, from 6.8%. Margins were relatively flat as the steady revenue growth net offset the effects of higher operating expenses.

Maintain NEUTRAL. We are optimistic on the company's outlook for 2H as sales will likely to be buoyed by the upcoming festive seasons. With its strong brand name and marketing strategies, we believe AEON's future earnings will be supported by strong sales growth at its existing and new outlets, as well as higher property management fees from its upcoming shopping centres. Nonetheless, we prefer to maintain our NEUTRAL recommendation on the back of the company's rich valuation with an unchanged FV of RM9.10 based on 16x FY12 EPS.