best time to accumulate, as what CallASpadeASpade said...

It is indeed surprising that Aeon Credit share price still performs badly even though its business is as solid as ever and also that it has resolved its 16% Capital Adequacy Ratio by successfully selling Perpetual Bond recently at very reasonable interest rate of 6.50%. So what is holding back its share performance ?

In my opinion, there are 2 possible reasons :- 1) Selling down by foreign fund managers 2) Damage done by the analyst report which purportly blew up the issue of " rising bad debt " in Aeon Credit.

Selling Down By Foreign Fund Managers
The news of QE tapering, first surfaced 4 months ago , sent tremor of fear through our market, resulting in massive selldown by foreign fund managers. While we were still trying to grasp what this QE tapering was, the selling persisted to the tune of circa 100mil of share value per day. Today the selling is less intense now at about 50mil per day. But surprisingly, there were few consercutive days when the foreign funds are the net buyers : 58mil(27Dec13), 122mil(30Dec13), 49mil(31Dec13) and 11mil(2Jan14). Judging by the net buying figure towards the end of 2013, anyone would have concluded that foreign funds had started coming back here again! I might be daydreaming!

Let us look at what is the impact of this selling. Many foreign darling stocks had fallen substantially off their peak resulting from the massive foreign selling. Listed below the affected foreign stocks(mostly owned by Aberdeen) :
1. Lafarge Cement Rm8.43 (down 25% from its peak of Rm11.20)
2. AEON Rm13.60 (down 24% from its peak of Rm18.00)
3. AEON Credit Rm14.06 (down 25% from its peak of Rm18.86)
4. Guiness Anchor Rm15.88 (down 28% from its peak of Rm22.00)
5. Carlsberg Rm12.00 (down 29% from its peak of Rm17.10)
6. Panamy Rm21.70 (down 20% from its peak of Rm27.00)
7. Nestle Rm68.02 (down 2% from its peak of Rm69.60)
8. BAT Rm63.76 (down 3% from its peak of Rm65.50)

Nestle and BAT seems to be the only 2 foreign stocks that were spared the punishment !Anyway, since this selling has nothing to do with the fundamental of the company, I believe the affected shares will stage a strong rebounce once the selling subsides.

Damages Done By Analyst Report
I believe you might have read an analyst report appearing 2 times (one in English and the other in Mandarin) in local newspaper a month ago alleging that there was a upsurge in Aeon Credit bad loans or gross impaired loan(GIL) from 1 6% to 2.0%. The author cautioned that if the GIL deteriorates further, he may downgrade the share.

Before I comment on it , let us look at the GIL of some of our major banks :- CIMB 3.7%, RHB 3.0% , Affin 2.1%, Alliance 2.1%, Maybank 1.9%, HL Bank 1.4%, PBank 0.7%. I just wonder why the analyst complimented CIMB for its healthy GIL of 3.7% and at the same times condemned Aeon Credit for the uptick in GIL from 1.6% to 2.0% as alarming? I believe he would have been more careful in selecting his words if Aeon Credit was majority owned by his family. The painful memory of Public Bank share price tumbling from Rm10.20 to its lowest Rm8.10 in Mar2009 after CLSA Research published its damaging report on Public Bank's capital adequacy ratio in the local newspapers, is still vivid in my mind!

Just a bit of my personal opinion, I believe it is normal for an analyst to react like that to protect his reputation or rice bowl as he is still under employment. He started cover Aeon Credit only when Aeon Credit share price hit 18.00. His first report recommended a buy with a price target of 20.20. After the release of the report, Aeon Credit did go up to its peak of 18.90 before nosediving all the way down to Rm17.30. Then he issued another report still recommending to buy Aeon Credit but with a lower price target of Rm18.00. Then Aeon Credit went through a series of fall to its current low of 14.06. This is the dilemma faced by a analyst. If he issues a report and the stock flies, he may get a raise from his boss. But if his report forcasts zigs, but the share price happens to zags, then he may be in for a trouble. So to protect his ricebowl, he may resort to finding "bone in the egg", hoping to find something to put all his blame on. So Aeon Credit bad loans became the scapegoat.

I do not see any problems with Aeon Credit. It business is still as solid as ever albeit slightly slower net profit growth. Its financial ratios are still as shiny as ever and its valuation is extremely cheap now!