The good bloggers are always trying their best to write articles which can relate to the readers' personal lives to achieve the greatest impact. Hence, what I am going to do over the next few months is to talk about the products manufactured by a bunch of listed companies which can be found in AEON stores. This will create a series of articles which I think might interest some of you who are very new to stock market investing. So let's get started!

Oh wait... before I walked into AEON, are you aware that AEON is a public-listed company in Malaysia? A.. Haa.. So do you think it is well-managed? Do you like to go to AEON stores to get your groceries? I will leave these questions to you. These are very important questions to ask if you wish to be a shareholder of AEON.

 

Aeon Co (M) Bhd is engaged in the operations of a chain of departmental stores and supermarkets selling goods ranging from clothing, food, household goods, other merchandise and shopping center operation. The company is 51% owned by AEON CO., LTD. in Japan as Aeon Co (M) Bhd was set up in response to the Malaysian Government’s invitation to AEON Japan to help modernise the retailing industries in Malaysia.

According to its latest annual report, property management services made up of approximately 14% of Aeon Co (M) Bhd's total sales. This business segment manages the rentals in an AEON building to generate recurring rental incomes from business owners. In 2015, average occupancy rate dropped to 90% from 94% in 2014.

If you scrutinize its annual reports, you would notice that Aeon Co (M) Bhd reported much lesser profits in the latest financial year - RM132 million as compared to RM212 million in 2014. The management blamed rising costs of living, implementation of GST and weakening of Ringgit as the main contributing factors to the sharp fall in net profits.

Despite Aeon Co (M) Bhd's strong brand recognition in the local market, it is facing a lot of headwinds in recent years due to stiffer competitions and the reasons mentioned above. Not to forget that the company needs to spend a lot of money in building its huge malls for expansion. In 2015, it spent RM700 million in capital expenditures, the highest level in the past 10 years. 

Do you think Aeon Co (M) Bhd will make higher profits in the next 5 years? Since this company is relatively easier to understand, an ordinary investor should be able to assess the business him or herself. Stay tuned for the next company!