AEON has already raised minimum wage from RM1200 to RM1500 since 1 Jan 2022, so the effect of higher wage has already been reflected in its March quarterly result, at least partially

AEON Annual Report 2021 said - True to the spirit of AEON Sayap Bagimu, AEON have recently announced a major initiative as it adjusted AEON’s minimum wage upwards to RM1,500 from RM1,200 a month in recognising that ther AEON People are the most important asset and who are critical for the long-term sustainability of the organisation. This change took effect from 1 January 2022, and it has benefitted 2,738 AEON People, indicating its commitment to prioritising the welfare of AEON People.

Some of you can read technicals charts better, please advise time of entry

AEON share price is over sold now with RSI indicator at year low.

I will call for patience. Though AEON profit margin may suffer a small setback while it delays price hikes of certain product sales, but it will help a lot to retain loyal customers and help to clear off inventory at old prices.
The management effort to help curb inflation and cut operating costs to maintain profitability should be applauded. I see this as the preferred way to fight inflation while retaining loyal customers by delivering extra customer services. It will help its retails business to gain market shares and we shall see such effort to bear fruits in next few quarters.

It could be due to a general sector downgrade as fears of food inflation creeps in.
AEON has dropped 15% from recent peak of 1.69
BJFood down 15% from recent peak of 4.85
Padini dropped 19% from recent peak of 3.58
Bonia down 10% from recent peak
InNature down 13%

Trading volume of AEON has been unusually high at 4m to 6m per day since early May, compared to average 1m in Jan-Mar 2022. This operator pushed the share price to year high of RM1.69 only to push it down again to 1.43 now. Not sure why.

some operator is manipulating the share price. Next support 1.41. Accumulate slowly

Title amended. Good suggestion.

thanks kelvin61. Agree with you that sooner or later the share price will reflect the intrinsic value of Bplant assets. As its major shareholder Boustead Holdings need cash to pare down borrowings, we can surely expect BPlant to gradually monetise its landbank to distribute more dividends to shareholders.

AEON shareholders will not be getting the new REIT shares directly but will get windfall dividends from the listing proceeds and through AEON still holding majority stakes in the REIT. Assuming AEON lists up 30% stakes of the REIT in the IPO and hold 70% majority, then AEON will be receiving RM3.0 billion of cash from listing proceeds and its 70% stakes in the REIT will be worth RM7.0 billion.
If AEON sells 49% stakes in the REIT listing, then it will receive cash proceeds of RM4.9 billion while its 51% stakes in the REIT will be worth RM5.1 billion.
I was assuming that AEON would list up 45% stakes and receive cash proceeds of RM4.5 billion, and assumed that AEON would use RM300m to reduce borrowings and the rest RM4.2 billion to be distributed as special dividend of RM3.00 per share.

Travestor, the title was a little misleading. It was meant to say that if AEON injects all its malls into a REIT, the REIT will be worth RM10 billion and AEON will be worth RM12.1 billion in sum-of-parts valuation. Compared to its current market capitalisation of RM2.1 billion, essentially AEON shareholders are getting the new REIT shares for free through indirect holdings of AEON Bhd.

If you have done your homework and are confident with the company prospects, you will make money sooner or later. Buy low and sell high. Buy when shorter term traders or speculative parties sell it, and sell it when retailers chase it high like in the case of BJFood.

Why there are so many people lose money in the stock market is because they speculate rather than invest properly. 9 out of 10 retailers who chased Serba Dinamik high to 18 sen after it resumed trading have lost money and I bet none of them understood what really happened inside the company.

Travesor, nobody knows when AEON will inject its malls into a REIT, not even its CEO and management. It is dictated by the major shareholder depending on a number of factors - their expansion plan over next 3 years, the capital market conditions, the confidence of the investment banker to solicit interests from cornerstone investors, the proposed valuation, etc.
My advice is that do not speculate on the timing but just accumulate while it is low now. Even though it does not materialise this year, the share price will still go up on improving business outlook.

Anyway I have sold off my BJfood holdings above RM4.60 and swifted to AEON now.

Using the same example as BJFood, lets look at AEON FY2021 financials:

Revenue RM3,630m
EBITDA RM725m
Depreciation (RM465m)
EBIT RM260m
Interest (RM129m)
Pretax Prodit RM131m

Now what if AEON revenue increases by 28% in next 3 years (8% growth p.a.) to RM4,660m by FY2025 as what I forecast in my 2nd article? EBITDA will increase by 28% to RM935m, EBIT will increase 80% to RM470m and pretax profit will jump 177% to RM363m. The compounding effect is amazing.

Once you have done your homework, you will have greater confidence in what you invest in and make better decision to make the right move. Like in the case of AEON, I am adding it while some party presses it down, as I believe that it will rebound once this party exhausts its selling. A deeply undervalued stock will not stay low for too long.
A good example was BJFood. When I first recommended it, it was trading at RM2.00 level and got pressed down to as low as RM1.81 in the following weeks, but after that what happened everybody knows. The share price has more than doubled up to as high as RM4.80.
People were skeptical of my recommendation then as BJFood was reporting dismayed net profit pressed down by high depreciation charges and continued losses in Kenny Rogers. But once Starbucks sales increased after MCO and Kenny Rogers turned around, you can see that net profit jumped by bounds after deducting off fixed depreciation charges. For instance,
Q3FY2022 Q3FY2021
Revenue RM246m RM182m +35%
EBITDA RM83m RM 56m +48%
depreciation (30m) (30m)
EBIT RM 52m RM 26m +>100%

You can see that though revenue increased by 35% only but EBIT jumped over 100% as depreciation charge is fixed (or small increased).
AEON will be a similar case like BJFood but a few times larger as its non-cash depreciation charge for the property management segment is almost RM350 million a year.

I pay attention to details as I have been trained in my corporate life then. And I believe one should really study the company aspects well especially its financials in order to have a good understanding of what happened in the company past quarter and to have reasonable confidence to project what will come next.

I am looking at IGBB but will see its March qtrly result first before I decide if it is worth a bet.

I am not good at technical analysis, often got it all wrong. Just like in the case of AEON, one would have expected it to go further after it breached resistance of RM1.65 to close at RM1.66 last Wednesday if he/she looked at the technical chart, but it went down the next day and dropped over 10% in the next few days.
It is hence risky to purely look at the chart to chase a stock as some operator will crash you down, as they have better technical chartists to manipulate the movements of the stocks.

I do look at technical charts mainly to get a sense of a good timing of entry into a stock or when to take profit for shorter term trades, but I rely more on fundamental analysis to gauge if I buy a stock or not.

You will notice from AEON quarterly reports and Annual Reports that the company itself was not able to clearly seggregate the costs for each of these segments, hence some Unallocated Expenses and a huge lease liabilities payment.
So in order for AEON to inject its malls into a REIT, it will need to first sort out the allocation of these Unallocated Expenses and lease liabilities payments, in order to maximise the cashflows and profits at the REIT and minimise profits at the holding company level to minimise income tax payment (as a REIT does not pay income tax but the holding company pays higher than usual income tax rates).

skoh888, thanks for your support. Yes the articles are a bit long as there is too much to share as background info in the first place. I would like to give readers a full picture of the company in terms of its financials, assets, business segments and prospects.
In the case of AEON, the financials are a bit unique and tricky. It took me quite some time and hard work to dissect its financials into the 2 business segments: (1) retailing and (2) property management services, and then to make a reasonable projection of its cashflows for each of the segments.

What I have done is to share my honest opinion on this stock and its huge potential. Now that someone is pressing down the share price is really good for me to add even more at low prices. I do not want to speculate on why these people are so desperately selling down the share, nor when AEON will inject its malls into a REIT, but rather just buy on what I believe in based on its current form of business fundamentals and strong cash flows. When the corporate exercise comes, then I know I will make a lot of money.

In fact, I recommended this stock when its share price was off its peak and the share price continued sliding down. I have not benefited from the share price movements. You can see that some party is trying to push up the share price to as high as RM1.69 before the Mar qtrly result was out to entice retailers to chase it betting on a good quarterly result. Now some parties are trying to press down the share price to below RM1.50 on grounds that the Mar qtrly result was disappointing. These parties are trying to press down the share price to give impression that no corporate exercise is forthcoming in order for them to collect more mother shares and call warrants at low prices. Who is doing speculative and manipulative actions here?

GLNT, I expect people to be skeptical of the idea I put forth in my article. What I did was just to share the huge benefits of doing the corporate exercise, and with good reasoning I was making a forecast that it will happen within this year.
There is a difference between speculating and making a reasonable forecast. Traders speculate on all sorts of things eg. government to bail out Sapura Energy, Serba Dinamik will get away from court charges, steel prices will shoot up further etc.

Value investors do not speculate but make reasonable forecasts. I calculated the odds of it happening vs the risk of putting my money in AEON at current prices, and I found that the downside is very low but upside is very huge.
I am very confident that I will make good money from investing in AEON in coming months, with or without the corporate exercise as its business fundamentals are strong and rebounding fast.

Travestor, that was my own forecast from deep research and my contacts. The benefits of injecting the AEON malls into a REIT are so huge that it is a no brainer for AEON to do it sooner or later.
I am making a reasonable forecast that it will happen within this year for the reasons I stated in my 2nd article on AEON published yesterday.

Agree with you that this ESOS round again will benefit the major shareholders, directors and employees more as the exercise price is fixed lower than market price. Anyway this is what ESOS is meant for. Minority shareholders like us can only hope to ride on the same uptrend wave of the company share price, though benefit less than employees.

QL is a resilient business but expensive. AEON is resilient but cheap

https://klse.i3investor.com/web/blog/detail/dragon328/2022-05-24-story-h1623391222-AEON_Bhd_is_the_best_Recovery_Play_with_a_potential_RM3_00_Dividend_Win

Zhulian offers good dividend but AEON may have more surprises

https://klse.i3investor.com/web/blog/detail/dragon328/2022-05-24-story-h1623391222-AEON_Bhd_is_the_best_Recovery_Play_with_a_potential_RM3_00_Dividend_Win

It is time to take profit on BJFood after more than 100% surge and look at other cheaper retails play like AEON

https://klse.i3investor.com/web/blog/detail/dragon328/2022-05-24-story-h1623391222-AEON_Bhd_is_the_best_Recovery_Play_with_a_potential_RM3_00_Dividend_Win

AEON is a safer and bigger retails play

https://klse.i3investor.com/web/blog/detail/dragon328/2022-05-24-story-h1623391222-AEON_Bhd_is_the_best_Recovery_Play_with_a_potential_RM3_00_Dividend_Win

CTOS is good but expensive. Better look at AEON

https://klse.i3investor.com/web/blog/detail/dragon328/2022-05-24-story-h1623391222-AEON_Bhd_is_the_best_Recovery_Play_with_a_potential_RM3_00_Dividend_Win

AEON is a bigger and better retails play

https://klse.i3investor.com/web/blog/detail/dragon328/2022-05-24-story-h1623391222-AEON_Bhd_is_the_best_Recovery_Play_with_a_potential_RM3_00_Dividend_Win

Papajack is a good hedge against inflation and bad market, AEON too

https://klse.i3investor.com/web/blog/detail/dragon328/2022-05-24-story-h1623391222-AEON_Bhd_is_the_best_Recovery_Play_with_a_potential_RM3_00_Dividend_Win

Cocoaland gives consistent dividends. AEON may have more surprises

https://klse.i3investor.com/web/blog/detail/dragon328/2022-05-24-story-h1623391222-AEON_Bhd_is_the_best_Recovery_Play_with_a_potential_RM3_00_Dividend_Win

AEON is a better retails play

https://klse.i3investor.com/web/blog/detail/dragon328/2022-05-24-story-h1623391222-AEON_Bhd_is_the_best_Recovery_Play_with_a_potential_RM3_00_Dividend_Win

AEON is a better consumer bet

https://klse.i3investor.com/web/blog/detail/dragon328/2022-05-24-story-h1623391222-AEON_Bhd_is_the_best_Recovery_Play_with_a_potential_RM3_00_Dividend_Win

BToto gives steady dividends. AEON may give higher

https://klse.i3investor.com/web/blog/detail/dragon328/2022-05-24-story-h1623391222-AEON_Bhd_is_the_best_Recovery_Play_with_a_potential_RM3_00_Dividend_Win

Evergreen is good. Can look at other retails counter

https://klse.i3investor.com/web/blog/detail/dragon328/2022-05-24-story-h1623391222-AEON_Bhd_is_the_best_Recovery_Play_with_a_potential_RM3_00_Dividend_Win

https://klse.i3investor.com/web/blog/detail/dragon328/2022-05-24-story-h1623391222-AEON_Bhd_is_the_best_Recovery_Play_with_a_potential_RM3_00_Dividend_Win

Correction is coming to an end. Big upsides are coming

https://klse.i3investor.com/web/blog/detail/dragon328/2022-05-24-story-h1623391222-AEON_Bhd_is_the_best_Recovery_Play_with_a_potential_RM3_00_Dividend_Win

PER at 4.5x, dividend yield of 17%-20%, strong buy

https://klse.i3investor.com/web/blog/detail/dragon328/2022-05-24-story-h1623389325-Bplant_is_a_niche_plantation_play_with_the_biggest_upsides_and_highest_

https://klse.i3investor.com/web/blog/detail/dragon328/2022-05-24-story-h1623389325-Bplant_is_a_niche_plantation_play_with_the_biggest_upsides_and_highest_

https://klse.i3investor.com/web/blog/detail/dragon328/2022-05-24-story-h1623389325-Bplant_is_a_niche_plantation_play_with_the_biggest_upsides_and_highest_

If you look at the ESOS from another angle, you will realise that YTL share price will shoot up soon. They quickly fixed the ESOS exercise price low before the share price shoots up.

My estimate is RM150m net profit for Q3 if Rapsol production was 9,000 b/d and RM220m if Rapsol production was 15,000 b/d