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Published: Monday December 31, 2012 MYT 4:45:00 PM

Aeon, Aeon Credit advance, KLCI down

KUALA LUMPUR: Shares of Aeon Co. (M) Bhd and Aeon Credit extended their gains in late afternoon trade on Monday on some fund buying despite some concerns about their expensive valuations.

At 4.28pm, Aeon was up 50 sen to RM13.20 with 315,600 shares done. Aeon Credit rose 24 sen to RM12.30.

However, the FBM KLCI slipped 3.92 points to 1,677.41. Turnover was 612.09 million shares valued at RM701.11mil. There were 234 gainers, 426 losers and 311 counters unchanged.

Affin Investment Research said on Monday it maintained its Reduce rating on Aeon Co. and target price of RM10.30 pegged to an unchanged price-to-earnings ratio of 17 times CY13 earnings ratio (PER) of 17 times 2012 earnings per share.

Although it is positive on the group's prospects due to its sound expansion plans; healthy domestic consumer spending and steady growth in its property management division, the research house said the sharp year-to-date share price appreciation of more 75% has pushed valuations to an unjustifiable high level.

"The stock is currently trading at 20 times FY13 PER with a dividend yield of just 1.3%. We maintain our Reduce rating on the stock and TP of RM10.30 pegged to an unchanged PER of 17 times CY13 EPS," it said.

As for Aeon Credit, OSK Research said in a recent report the company's nine months earnings of RM94.9mil were within estimates, representing 75.6% and 79.2% of its and consensus' full-year forecasts respectively.

"By segment, the group's growth momentum remained intact, with personal financing surging 116.6%, credit card (+22.6%) and motor easy payment (+29.2%).

"Although non-performing loans inched up to 1.81% (1H13: 1.53%), this is no cause for concern as it is within Aeon Credit's historical average. Maintain Neutral, with RM14 fair value," it said.

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