AEON’s  9M13  results  were  within  consensus  and  our  estimates. Although reaching just 63% of 2013 estimates, we deem the numbers in line  as  4Q  is  usually  its  strongest  quarter.  The  good  results  were underpinned  by  better  performance  at  its  retail  and  property management  divisions.  Maintain NEUTRAL,  with  our  FV  unchanged at MYR16.00.

• In  line.  AEON’s 9M13 sales grew 8.3% y-o-y, mainly driven by healthy revenue growth  at  its  retail and property management segments. Retail revenue rose  8.1% y-o-y  owing to  higher contributions from  new stores and  an  overall higher  number  of  sales  days  for  members of  its  loyalty card.  Meanwhile, revenue  from  its  property  management  unit  also  rose, climbing  10%  y-o-y,  largely  attributed  to  stronger  contributions  from  its new shopping centres and higher rental rates  following a  revamp of its tenant mix. Net profit trended higher by 22.2% y-o-y, backed by stronger EBIT  from  the  retail  (+31.6%)  and  property  management  (+16.8%) segments. Vis-à-vis 3Q12, the current quarter’s sales and earnings were higher  by  5.7%  and  11.2%  respectively,  boosted  by  better  sales  and EBIT from both divisions.
• Margins. 9M13 EBIT margin trended higher to 8.5% from 7.5% in 9M12, mainly driven by better  performance  from  both  the  retail (4.4% vs 3.6% in 9M12) and property management (38.5% vs 36.2% in 9M12) divisions.
• New  mall  to  open  at  month-end.  AEON’s  new  mall  in  Kulai,  Johor, which  has  a  net  lettable  area  (NLA)  of  around  457k  sq  ft,  is  slated  to open by  the end of this month.  For FY14,  the company has confirmed the opening of three  new malls -  in  Bukit Mertajam (~600k sq ft of NLA), Klebang (-500k sq ft) and Taiping (~400k).
• Maintain NEUTRAL.  We are optimistic that AEON will be able to deliver double-digit  earnings  growth  given  the  impending  opening  of  its  new malls.  We  continue  to  like  the  company’s  solid  fundamentals,  strong branding and  aggressive  expansion.  Maintain NEUTRAL, with our DCFbased FV at MYR16.00.

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Company Profile
AEON operates a chain of superstores and shopping centres.

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Source: RHB