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

Local analysts are too slow to react or too egolistic to correct own bearish view. Some still stick to own earlier projection of average CPO price of RM4100/tonne for 2022 though actual YTD CPO prices have averaged above RM6,000/tonne

CIMB research forecast that the potential pie for digital banks will be about RM10 billion, so each digital bank may rake in annual revenue of RM2 billion each on average. With net profit to revenue ratio of 31% (eg. Ambank) to 52% (eg. Hong Leong Bank), each digital bank may potentially make a net profit of RM2.0bn x 31%-52% = RM620 million to RM1,040 million a year when matured

With Ukraine missing out on this spring seeding season for sunflower oil, the edible oil supply will be tight at least until next year end. That will only be good if Ukraine manages to plant sunflowers next spring, if not then xeee liao loh

CPO prices on Friday did not drop buy went up even after Indonesia lifted export ban, a strong indication that the world edible oil supply is extremely tight

concur with you that local IBs are blind-eyed with half of them forecasting average CPO prices of RM4,000-4,200 per tonne for 2022

I bought at even cheaper at 75 sen in 2020 now adding more at 1.50

It should be within this year when it happens

This is real and the benefits are huge. Please read the article again for more detailed info:

https://klse.i3investor.com/web/blog/detail/dragon328/2022-05-20-story-h1623331448-AEON_Bhd_is_rewarding_shareholders_with_Free_REIT_shares_worth_RM7_00_p

AEON will increase shareholders' value by RM10 billion by creating a new REIT. Just by listing up 30% stakes of the REIT (while retaining 70% majority control), AEON will see cash proceeds of RM3 billion coming in which will be handy to reduce borrowings, for future expansion and for special dividends of almost RM2.00 per share!

Therefore, when AEON injects its malls into a REIT, we will straightaway see that its net profit will jump up by :
(1) RM330 million from removing the non-cash depreciation charges
(2) RM22m interest expenses every year
(3) about RM100 million of income tax payments every year
or a total increase of RM450 million per year from FY2021 of RM85m to well over RM500 million of net profit level

To resolve these issues and hence to improve on net profits and dividend payouts, the natural solution is to inject all AEON malls into a new REIT as:
(1) a REIT does not need to depreciate its assets
(2) proceeds from REIT listing will reduce borrowings to zero and save on interest expenses
(3) a REIT does not need to pay income tax as long as it distributes over 90% earnings as dividends

Why net profit has come down is due to:
(1) higher depreciation charges (from higher asset base due to mall expansion over the years)
(2) higher interest expenses (due to higher borrowings for mall expansion)
(3) high income tax rate of over 40% (due to non-deductible expenses)

While shareholders have been complaining of reducing net profit over the past 9 years from over RM230m in FY2013 to just RM85 million in FY2021, but you need to look at the more important operating cash flows and EBITDA that has increased by over 50% in past 9 years.

While we see that other competitors like Giant are making losses, AEON has been able to maintain and grow operating cash flows over the years, thanks to management efforts. You can see that its operating cash flows are so strong that AEON has managed to reduce borrowings by half from over RM900m to now just about RM450m nett debt.

Yes, AEON is facing challenges from online retail merchants as well as other traditional retailers like Tesco, but we can see that AEON management has been trying hard to defend and grow its market reach - (1) embark on digital transformation to increase online sales which have shown multiple folds of increase in past 12 months, (2) rejuvenile existing malls like Alpha Angle to improve shoppers' experience and increase retails footfalls, (3) install solar power systems at its shopping malls to save on electricity costs, (4) invite a lot more local and domestic suppliers from communities to participate in retailing of food and grocery goods in its malls, (5) increase local supplies and reduce imported goods to just 3% of supplies to contain inflation, (6) increase sales commission-based tenancy income mix from fixed tenancy income in its retail shop leasing to take advantage of rebounding retails sales of retail shop merchants in its malls, (7) raise minimum wage to RM1,500 per month for its local employees well before government directives and reduce on foreign labour employment which has become scarce and more expensive, hence reduce overall operating costs while creating more job opportunities for local communities and stronger bonds with local communities

With the hot weather now, many patrons just go inside shopping malls like AEON malls in the community for the cool and clean environment, for grocery shopping, for visiting bookstore, for lunch and dinner, for drinks, etc. You can continue locking yourself at home and buy things online but how long can you do that for? It will drive you nuts and become narrow minded.