Posted by TreeTopView > 2021-09-25 11:48 | Report Abuse

coolkwc, it might be "boring" but it is stable. That is far more important when you consider the KLCI has dropped from 1,600 to 1,520 during September.

Another plus is the fact that the shorted shares continue to slowly get covered. We have had 147,000 covered this week, up to Thursday's closing figures.

All things considered, I believe the price is holding up well.

My thoughts only, but if the KLCI can gradually move back up to 1,600+ before the end of the calendar year, then we might see Aeon attempt to take on the next Fibonacci targets of 1.60, 1.68, and 1.76.

Posted by hahasong > 2021-10-01 11:24 |

Post removed.Why?

Posted by dragonfruit123 > 2021-10-02 01:50 | Report Abuse

kena sell down suddenly

Posted by firehawk > 2021-10-21 16:18 | Report Abuse

opportunity :-)

Posted by VennesA > 2021-11-01 07:55 | Report Abuse

Aeon just celebrate it anniversary. Time to buy back

Posted by firehawk > 2021-11-25 08:09 | Report Abuse

QR NG ... hv to wait longer ......

Posted by calvintaneng > 2021-11-25 08:16 |

Post removed.Why?

Posted by firehawk > 2021-11-25 08:28 | Report Abuse

stuupid, I bet u know nothing about management ability but simply come to promote other ctrs ... sick!

Posted by calvintaneng > 2021-11-25 08:30 | Report Abuse

I SEE

https://www.youtube.com/watch?v=3QK3xtVAM0w

Posted by firehawk > 2021-11-25 08:33 | Report Abuse

sorry! i won't click the link ... :D

Posted by firehawk > 2021-11-25 08:34 | Report Abuse

i don't want to waste my time :D

Posted by Dongbei > 2021-11-29 22:48 | Report Abuse

Pricing quite resilient, although bad results.
Sold 95% of my holding at 1.50 RM, probably good decision.
Wanted to keep long term, but doesn’t look too good.

Posted by wsb_investor > 2021-12-15 09:08 | Report Abuse

https://www.thestar.com.my/business/business-news/2021/12/14/grab-holdings-to-acquire-malaysian-supermarket-chain-jaya-grocer

Posted by firehawk > 2021-12-29 15:32 | Report Abuse

2 days ~+10% ;-)

Posted by IkNowEvErYthiNG > 2021-12-31 11:45 | Report Abuse

Post Flood theme play lah

POH HUAT, AHB, WOODLANDOR, VERSATILE, AEON, SERNKOU, LIIHEN

Posted by dragon328 > 2022-02-23 21:06 | Report Abuse

Superb quarterly results!!

Net profit jumped up 1.6x y-o-y and 4.8x q-o-q to RM71m.

Strong operating cash flows enabled Aeon to pare down debts by almost RM205m while increasing cash balance by RM122m.

Full year free cash flows amounted to RM378m or 27 sen per share.

Grossly undervalued!!

Posted by observatory > 2022-02-23 22:49 | Report Abuse

@dragon328, yes, very strong set of results.

May I know your maintenance capex assumption?

I noted that Aeon has huge depreciation & amortization (RM464m) due to heavy investment in the past, which resulted in cash from operation of almost RM700m. Meanwhile the capex in recent years have been low, only RM67m and RM46m respectively in 2021 and 2020.

I’m not sure whether current capex level is too low and therefore unsustainable.

Shown below were the PPE acquisition over the last decade.

2021 RM67m
2020 RM46m
2019 RM271m
2018 RM519m
2017 RM369m
2016 RM704m
2015 RM700m
2014 RM671m
2013 RM522m
2012 RM199m
2011 RM315m

Surely the maintenance capex level would not reach the RM600-700m range as recorded in 2014-16. Those were probably the time when they were building new malls.

But could a long run maintenance capex be very substantial still, like the level seen in 2019 just before Covid?

I'm thinking that it has to be a substantial fraction of annual depreciation of RM464m.

Based on Annual Report note on PPE, the largest category of depreciation came from machinery and equipment, which are estimated to have useful life of 3 to 10 years. Let’s assume the actual life is double of the accounting life, and therefore fully depreciate assets can be used for 6 to 20 years.

Then the maintenance capex should be set at 50% depreciation, which is RM464m * 0.5 = RM232m.

The resulting free cash flow = RM699m – RM159m (payment of lease liabilities) – RM129m (interest paid) – RM232m = RM179m. This number will be substantially lower than your calculation.

Any thought on this point?

Posted by firehawk > 2022-02-24 17:14 | Report Abuse

market sentiment NG ... only up 5.11% :-(

Posted by apple168 > 2022-02-24 23:40 | Report Abuse

Be prepared for bloodbath tomorrow!

Posted by firehawk > 2022-02-25 15:43 | Report Abuse

another +6.25% ... is considered ok lah!

no surprise if up trend continue and break recent height 1.55!

Posted by dragon328 > 2022-02-26 18:50 | Report Abuse

@Observatory, I would think the normal maintenance capex should be around RM40m to 60m a year, looking at the actual capex numbers in last 2 years when AEON did not build any new mall.

The PPE is about RM3.1 billion, the bulk of which should be land and building which have long depreciation period of 30 years or more. Using linear depreciation, the depreciation charge of PPE land and building should be less than RM3100m / 30 years = RM100m a year.

There is another RM1.5 billion worth of Right-of-Use asset in the balance sheet, this could contribute a substantial amount of amortisation charge c. RM188m per year.

Else where, the rest of the depreciation could come from depreciation of machinery and equipment which should not be very much, mainly air-conditioning systems, chillers and lighting systems. I am not sure how much these contribute to the depreciation charges.

Anyway, as its past results have shown, I am confident that its free cash flows will be above RM350m per year allowing for RM30-50m of normal maintenance capex.

Its latest report stated that AEON would install solar panels in its shopping malls starting with Taman Maluri mall. It may require a capex of say RM3.0m for a mall that uses some RM100k of electricity per month. It would save up to RM1.0m of electricity costs per year per mall. So operating costs will gradually reduce as it install solar panels in other malls.

I think Aeon would be prudent in any major expansion plan in next 3 years as competition is fierce and malls are quite saturated in major cities. If it does not build any new mall in next 2 years, it would be able to generate about RM700m of free cash flows over next 2 years and to reduce its net debt to zero. Interest costs saving would be at least RM30m per year plus electricity costs saving of RM5-10m per year, free cash flows would increase by RM35-40m per year to about RM420m or 30 sen a year.

Then it would be in a good position to pay high dividends while expanding at a sustainable pace. It has over expanded from 2011-2019 by opening 1-3 new shopping malls every year, spending a lot of capex, getting lots of debts, paying lots of interests and suffering lots of depreciation charges. That is why you see its financials actually deteriorated from 2012 to 2019 and share price dropped from RM3.00 level all the way to RM1.50 in 2019 before pandemic. Depreciation charges and interest costs had increased faster than the incremental earnings from new malls. Cash flows were tight with little dividend.

I would prefer Aeon to selectively expand at a more sustainable manner. With over RM400m of free cash flows a year, it could afford to open a mid size mall of c.RM200-250m each year while distributing RM140m or 10 sen a share of dividends each year. In the year of no expansion, Aeon would afford paying dividends of 20 sen per share.

Posted by DickyMe3 > 2022-02-27 15:40 | Report Abuse

Highly dubious stock.

Posted by observatory > 2022-02-27 22:31 | Report Abuse

@dragon328, thank you again for sharing your detailed analysis. It's a very good learning for me. It's obvious that you've done a lot of homework!

I've also commented on several other stocks discussed earlier, and left a message on your i3 Messenger. Feel free to respond at your convenience.

Posted by firehawk > 2022-03-02 23:47 | Report Abuse

EMPLOYEES PROVIDENT FUND BOARD
24 Feb 2022 1,213,600 Disposed Direct Interest
25 Feb 2022 259,900 Disposed Direct Interest
Total no of securities after change 154,022,400 (10.97%)

not sure whether these few days sold down by EPF too, they can report later ......

Posted by dragon328 > 2022-03-03 10:54 | Report Abuse

EPF disposing AEON shares will prove to be a big mistake, just like what it did with glove stocks, chasing high in mid last year then selling low since last year end.

AEON earnings have gradually jumped to the next level from the slumps in past few years saddled with high depreciation charges and high interest costs.

The pandemic has made AEON rethink its strategy and more prudent in expenditure and expansion while embarking on various cost optimisation efforts.

Furthermore, I like its focus on improving customers' shopping experience and increasing online sales. This is important to fence off competition from emerging hypermarkets and retain loyal customers.

I look forward to steady and more sustainable growth in AEON which will pay attention to optimising its financials and rewarding shareholders. It could look at other growth business models of larger supermarket chains in other countries like Walmart in the US and Coles in Australia, eg. opening smaller format stores in mid sized towns for growth.

Posted by firehawk > 2022-03-04 20:58 | Report Abuse

EPF also keep on disposing Takaful, even at low price .... my be it needs cash for operation ......

Posted by dragon328 > 2022-03-05 16:13 | Report Abuse

EPF's strategy is hard to comprehend. Bought glove stocks high and sell low now. It sold Astro below RM1.00 and now buy it back at above RM1.00. EPF was lucky to have earned more from the US markets which went up a lot last year to cover for its underperformance in Bursa.

Posted by dragon328 > 2022-03-05 16:24 | Report Abuse

Aeon just dropped 2 sen in a very bad market yesterday. In terms of technical charts, 25-day moving average line crosses up 50-day MA with MACD lines firmly up after a golden cross last week. The next push should take it to test previous high 1.53 and hopefully can get past resistance 1.55.

With record quarterly profits for Dec quarter and another superb result in the making for the March quarter, Aeon should be on its way to regain past glory with targeted net profit topping the RM200 million mark.

Posted by dragon328 > 2022-03-16 15:54 | Report Abuse

The government just announced to allow withdrawal of RM10,000 from EPF for eligible members. Assuming 5 million EPF members will make the withdrawal, there will be RM50 billion of cash coming out for households to spend.

AEON will be one of the major beneficiary of such massive cash injection into the retails market. With chinese new year and back-to-school spending in Jan-Mar, this quarter will see AEON achieving another record earnings.

With this massive cash adding to households' spending and Hari Raya festivals, the April-Jun quarter may well see good earnings momentum continuing for AEON.

Posted by observatory > 2022-03-19 18:43 | Report Abuse

Check out page 22-23 of the latest The Edge edition. There was an interview with CEO Shafie.
1. Average capex was RM400-500m between 2012-19, but will reduce to RM200-300m in the next few years
2. 30% capex on technology; 40%-50% on a mall rejuvenation program; remainder on maintenance
3. Elaboration on its digital platform.

The digital platform and mall rejuvenation could bear fruits, but only in the future.

For the near term, taking the capex guidance of RM250m, using previous simplified calculation, resulting free cash flow = RM699m – RM159m (payment of lease liabilities) – RM129m (interest paid) – RM250m = RM161m or 11sen per share?

The key assumption is in the RM699m Operating CF as recorded in 2021. The PBT for 2021 was RM131m.

The 2016-2020 PBT ranged from RM102m to RM197m per year. With a more optimistic scenario of about RM200m PBT in 2022, the FCF can increase to about RM230m, or 16 sen per share. However the CEO is cautious about the current year prospect.

Posted by dragon328 > 2022-03-21 18:16 | Report Abuse

AEON management must be prudent in new capex spending and must learn its own mistakes of lavish spending in previous years from 2013-2018.

If they target capex of RM200m to 300m a year for next 2-3 years, it is still acceptable and can be fully funded by internally generated cashflows without the need to raise more borrowings. They must remember that they still have hundreds of million of debts sitting there to serve.

Take a middle figure of RM250m capex a year, 30% or RM75m for technology a year is a bit too high. They have to ensure this amount of capex shall be able to improve sales and profits and get back investment returns within 5 years.

40%-50% capex or RM100-125m a year on mall rejuvenation programs seem reasonable without any new mall building. Again such investments must provide immediate returns to increase sales and rental income.

The remaining 20%-30% capex or RM50m - 75m for maintenance is within the ballpark.

I would look at annual operating cashflows of RM376m or 27 sen per share before capex. No matter how they slice it, there would still be positive free cash flows of over RM100m to RM300m. I would prefer them to spend less in the next 2-3 years, eg like RM50-70m p.a. like in 2021 to build up cash and return debts further first before embarking on more aggressive capex programs.

Posted by dragon328 > 2022-03-21 20:51 | Report Abuse

Every single capex program whether on mall rejuvenation or on IT/technology must be able to achieve a KPI return of 12% IRR or higher, or provide a payback within 7 years. For a RM100m spent on a mall rejuvenation project, AEON management must ensure that it will improve lettable area or footfalls in the mall so that it will provide higher income of at least RM12m p.a. after the capex improvement.

For every single capex program, the management must exercise caution and set reasonably high KPI for expected returns, otherwise just do not spend it.

Should learn from DKSH who spent about RM30m on internal improvement programs which almost immediately lifted up profits by over 30% or over RM20m in the following year.

For example, the capex spent on installing solar panels at AEON malls is well spent as it will pay back within 3 years, i.e. capex of RM100m shall give total returns of RM100m in 3 years in the form of tax rebates / savings and electricity cost savings.

I wonder if the spending of RM50m to RM75m p.a. on technology will give what sort of returns. It is not a small sum. If used in paring down debts, it will save interest costs of RM2m to 4m p.a. The management should use similar benchmark when deciding on each of such capex program.

Posted by dragon328 > 2022-03-21 21:11 | Report Abuse

I do not know what made the CEO cautious of this year prospects. He must deliver better results than last year which had almost 2.5 months of total shutdown of its shopping malls. This year also sees another RM10k EPF withdraw which will inject RM30-50 billion of cash into households' spending.

Posted by dragon328 > 2022-03-21 21:13 | Report Abuse

If the CEO is asking for capex allocation of RM200-300m p.a. for the next 2-3 years, he must deliver better earnings for the next 3-5 years. DO not just ask money from shareholders but under deliver.

If AEON has its debts exceeding RM600m again by year end and fails to deliver over RM100m in net profit for FY2022, he must go. No more excuses. Simple as that.

Posted by dragon328 > 2022-03-21 21:17 | Report Abuse

Shareholders of AEON have been suffering in declining earnings and depressed share price since 2012 for the over spending in past few years. For 10 LONG YEARS, shareholders have been suffering enough.

For no new mall addition, if the management is asking shareholders for RM200m-300m of money every year, I would tell them to go fly kite.

Posted by faridfet > 2022-03-30 11:47 | Report Abuse

AEON will deliver stronger earnings growth

1. Bantuan Keluarga Malaysia (same like BRIM) RM350 to RM2000 starting 28 March 2022
2. EPF withdrawal RM10,000 one-off starting 1 April 2022.
3. Ramadhan fasting & Aidilfitri raya festive seasons starting 3 April 2022 - 2 May 2022
4. Border Reopening starting 1 April 2022 will push more their retailing and property management services.
5. Most of AEON's stores are located in suburban residential areas aiming for middle income group too.

Posted by dragon328 > 2022-03-30 11:49 | Report Abuse

In last Saturday interview with The Star paper, AEON's CEO stated that the planned capex of RM200-250m for 2022 would include capex for a new departmental store. He also mentioned that the company has installed solar panels in Tmn Maluri AEON mall and would consider installing solar panels at other 30 malls that it owns.

I consider this amount of capex to be reasonable for good capital investment programs like roof-top solar panels and a new departmental store (instead of a more expensive new shopping mall).

Posted by dragon328 > 2022-03-30 11:53 | Report Abuse

He was optimistic of AEON's prospects for 2022 with the gradual reopening of the economy. He noted that AEON non-essential businesses were closed for 119 days in 2021.

With the omicron wave coming to an end and no more MCO in vicinity, there is no reason why AEON will not perform better this year than 2021.

Posted by dragon328 > 2022-03-30 11:59 | Report Abuse

I particularly like the AEON Sayap Bagimu sustainability initiative mentioned by the CEO. Shafie says AEON brought in 400 suppliers comprising small enterprises in 2021. This is very smart and a win-win strategy, providing a platform for small enterprises to multiply their sales and at the same time broadening product offering especially local quality products and increasing sales for AEON.

This indirectly reinforces AEON's status as a community mall, supporting local small enterprises around and providing more product choices to the local community.

Posted by dragon328 > 2022-03-30 12:04 | Report Abuse

He mentioned that AEON has spent close to RM10 million installing solar panels at Taman Maluri and Alpha Angle malls. This would be for about 4.0 MW of solar power and would save abour RM2.9 million of electricity costs per year.

It is capex well spent as AEON would recoup investments within 3 years after incorporating green tax incentives.

Just imagine if AEON were to spend another RM100m capex to install solar panels in other 20 malls, it would save RM29 million of electricity costs every year for the next 25 years. This would raise earnings by 2.0 sen per share every year.

Posted by dragon328 > 2022-03-30 12:12 | Report Abuse

AEON share price dipped to 1.46 low yesterday on weak market sentiment but has since rebounded to challenge month high of 1.56.

These has been a big seller of over 1.0 million shares queued at 1.57 everyday in past few days. I suspect this seller is CIMB IB who issues the call warrant AEON-C10 that expires on 31 March. CIMB IB has all its reason to block AEON share price from reaching 1.60 so that it will not need to pay a single sen to settle all the call warrants C10 it has issued. Very wicked intention.

Posted by dragon328 > 2022-03-31 12:48 | Report Abuse

The big block of 1.0 million shares blocking at 1.57 has been snapped up this morning. Today is the last day for calculating the settlement price for AEON-C10, so it does not matter if AEON share price shoots above RM1.60 today as the average for last 5 days will be less than RM1.60 and CIMB has succeeded in getting a zero settlement for the C10 call warrants it issued.

after today, there is no more reason for CIMB to block AEON from going higher. Incidentally, Maybank IB this morning issued a technical Buy on AEON with short term tp 1.65 then 1.79.

Posted by faridfet > 2022-03-31 14:45 | Report Abuse

Aeon announced that they will focus on technology improvements which is 30% of their total capex. The budget to technology capex will be RM60 million. They will build a comprehensive and integrated digital ecosystem. Currently Aeon will prioritise the right products based on customer demand rather than depend by its suppliers. With the digital connectivity, Aeon will be able to know the data. Another things, they will take a personalised approach for the product price rather than a blanket promotional price. So this will attract the customer better. Nice right...

Posted by dragon328 > 2022-04-04 19:58 | Report Abuse

@faridfet, this sounds good to me. Aeon management should set KPIs to be achieved for this amount of money spent, eg. sales increase for certain products or certain improvement in inventory control and hence cashflows.

Posted by faridfet > 2022-04-05 12:39 | Report Abuse

Kenanga Investment Bank Berhad announced today 5th April 2022:

1. They reiterate to buy Aeon is one of the undervalued large cap stocks
2. Margins looking solid as both are not affected by volatile raw materials prices
3. Financial muscle to absorb rising costs
4. Laggard position for the effect of inflation
5. Demand ahead looks likely to be supported by incoming festivities boosting sales which retailers will be up towards full utilization.
6. Consumer sentimet recovering: The MIER Consumen Sentiment Index has showed improved sentiments since mid September 2021 as the national Recovery Phase took effect. Driven by the reopening of the economy and pent-up demand, this improved sentiment looks likely to hold ahead.
7. More so with BNM pledging to keep interest rates at an accommodative level to support the nascent economic recovery.

Huat Ah 888!

Posted by Russel > 2022-04-05 14:57 | Report Abuse

AEON so strong.

Posted by faridfet > 2022-04-06 11:50 | Report Abuse

Russel, this is because AEON is one of the major beneficiary of such massive cash injection from government will give direct impact into the retails market.

Cash injection by government to Malaysians for this 2022:
1. Bantuan Keluarga Malaysia (BRIM alike)
-total allocation of RM8.2 billion cash injection
-payout starting 28 March 2022, June 2022, Sept 2022
-Malaysian will receive rm350 to rm2300
-B40 major recipient
https://www.theedgemarkets.com/article/tengku-zafrul-rm82b-bantuan-kel...

2. EPF withdrawal one-off RM10,000
-total allocation RM63 billion cash injection
-payout starting 20 April 2022
-Malaysian will receive RM10,000 in one-single-payment
-B40, M40, T20
https://www.theedgemarkets.com/article/pm-ismail-sabri-says-government...

3. RM500 raya bonus for civil servants & RM200 for retirees
-total allocation RM923 million cash injection
-payout starting 25 April 2022
-2 million civil servants recipient
https://www.nst.com.my/news/nation/2022/04/786124/pm-announces-rm500-s...

4. Not to mentioned Muslim will spend extra for Ramadhan Fasting & Raya Aidilfitri add up with their salary to be spend.

A total nearly RM73 billion will contribute to local economic growth and stimulate spending growth especially retail like AEON.

That is why the research house/investment bank announced that AEON target price could reach RM2.90

Posted by dragon328 > 2022-04-06 19:39 | Report Abuse

@Faridfet, which research house announced a target price of RM2.90 for AEON?

Posted by sunnyspoon > 2022-04-06 20:19 | Report Abuse

Tomorrow up some more

Posted by sunnyspoon > 2022-04-07 09:28 | Report Abuse

Duit raya by Aeon