We accompanied AEON on a non-deal roadshow recently to visit fund managers and analysts from New York, Boston and Chicago. The investors were positive on the company's outlook given its  strong  branding  and  aggressive  expansion. AEON's upcoming Sri Manjung, Perak outlet will be opening end of this year whilethe Kulai, Johor outlet is slated to open by 2013.  Management said the company is not involved in the reported deal between AEON Japan and Carrefour. Maintain NEUTRAL, with FV unchanged at RM10.28. 
 
'Hello' US of A!  Earlier  this  month,  we  showcased  AEON  to  17  fund  managers  and analysts  in  the  United  States  (US),  which  attracted  overwhelming  response.  Executive Director  Mr  Poh  Ying  Loo  briefed  investors  on  the company's background, business model, future plans and strategies. The American fund managers were generally drawn to AEON's strong brand name, unique business model and solid earnings record.

More  malls  in  the  pipeline.  The  company  will  be  opening  a  two-level  outlet  in  Sri Manjung in Perak which has a net lettable area (NLA) of 477k sq ft, by December this year, followed by another new mall in Kulai, Johor, with a NLA of approximately 457k sq ft, in 2013. AEON is also in the midst of expanding its presence  in the northern region with  plans  to  open  a  new  mall  each  in  Sungai  Petani  and  Bukit  Mertajam.  In  order  to maintain its market share and penetrate the relatively untapped markets, the company is looking  at  the  possibility  of  venturing  to  East  Malaysia,  as  well  as  the  east  coast  and secondary towns in Peninsular Malaysia.  Going by this trend, we believe AEON will be opening more outlets in FY14 and FY15.

Not  involved  in  Carrefour  deal.  Last  week,  the  Nikkei  reported  that  AEON  Co  Ltd (AEON  Japan),  the  parent  company  of  AEON,  is  set  to  buy  Carrefour  Malaysia  for USD750m  (~RM750m)  in  a  deal  expected  to  be  completed  soon.  Management, however,  clarified  in  a  Bursa  Malaysia  filing  yesterday  that  AEON  Malaysia  'is  not involved  in  and  has  nothing  to  do  with  the  reported  deal''  at  this  stage.  However,  we would not be surprised if AEON Japan is keen on Carrefour Malaysia given the group's history  in  acquiring  other  hypermarkets  and  its  experience  in  managing  Carrefour stores, having bought eight Carrefour hypermarkets in Japan in 2005.

Maintain  NEUTRAL.  As  there  is  no  change  in  the  company's fundamentals,  we  are keeping our FY12 and FY13 earnings forecasts untouched. Maintain NEUTRAL, with FV of RM10.28, based on 16x FY13 EPS.

Hello 'Uncle Sam'! The US, which consists of 50 states and a federal district, is the world's biggest economy with a population of 314.6m. It is also a global financial hub that is home to a large number of internationally well-known banks, businesses and stock exchanges. We brought AEON Malaysia to US for a non-deal four-day  roadshow.  We  met  up  with  17  fund  managers  and  analysts  from  'Big Apple' New  York,  'Beantown' Boston and 'Windy City' Chicago. The roadshow was timely, given that the US investors are currently looking at consumer plays in the emerging markets, especially Southeast Asia, and AEON is a prominent retailer in Malaysia.

Rebranding well in progress. AEON unveiled its new brand name 'AEON' ' which means eternity in Latin ' earlier this year  to replace the 'Jusco' brand that most Malaysians have grown accustomed to over the past 28  years.  This  is  part  of  the  AEON Group's  global  strategy  to  standardize  its  corporate  identity.  AEON's customer loyalty programme, J card, has been replaced by the AEON member card and the 'Jusco' signs are progressively being replaced with 'AEON' signs. Currently, there are approximately 1m AEON members and >60% of AEON's monthly sales are from its members. 

 Source: OSK