KUALA LUMPUR: Affin Hwang Capital research maintained a hold call on Aeon Co (M) Bhd with an unchanged target price of RM1.61 as its first-half 2019 results came in within expectations.
The research house remains cautious over the stock due to the linger weakness in operating margins although moving forward, it expects a stronger performance in the remaining six months of 2019 due to year-end rebate collections.
In a note, the research house said 6M19 core earnings grew 13.9% year-on-year to RM52.2mil led by an absence of losses arising from an associate and higher revenue, despite a slight margin contraction of 0.2ppt y-o-y and a 3.5% bottomline impact from MFRS16 and MFRS123 accounting adjustments "All in, we deem 6M19’s results to be within both market and our expectations, accounting for 41% and 43% of consensus and our full-year estimates respectively.
On a sequential basis, core earnings declined 40% over a seasonally weak quarter, with revenue declining 8.9% quarter-on-quarter.
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