Kenanga Research said the group may continue to achieve an above-industry financing growth rate.
PETALING JAYA: Analysts are positive about Aeon Credit Service (M) Bhd
’s prospects, given its financial year 2025 (FY25) results, which exceeded expectations and met all of its FY25 headline targets.
Amid ongoing economic uncertainties, Kenanga Research, in a note to clients, said the group may continue to achieve an above-industry financing growth rate, leveraging its investments in the ecosystem, with support from AEON Bank (M) Bhd.
AEON Credit closed FY25 by achieving all its targets, including loan growth of 15.4%, compared to a target of 10%, and a return on equity (ROE) of 13.6%, versus a target of 13%.
Kenanga Research highlighted that the group anticipates its achievements could be replicated in FY26, but has set a lower target for ROE, aiming for around 12%.
“We opine this could be due to heavier associate losses as AEON Bank’s eventual move to generate revenue could incur most overall cost.
“The group’s target to increase its loans by 10% remains above our industry target of around 6%,” it added.
The research house believes the group should continue to achieve above-industry loan book growth as it further leverages its “AEON Living Zone” ecosystem to boost cross-selling opportunities.
A shift towards a higher mix of the 40% middle-income customers may be necessary, as the bottom 40% could be more price-sensitive amid ongoing trade policy uncertainties.
Kenanga Research has raised AEON Credit’s FY26 earnings forecasts by 6%, driven by higher non-interest income assumptions such as recoveries and fees.
“Our net credit cost assumption of 4.18% for FY26 is higher than FY25’s 3.87%, anticipating further top-ups in provisions amid ongoing macroeconomic uncertainties.”
It kept its “outperform” call on the stock with a target price (TP) of RM7 per share. Risks include lower-than-expected receivables growth, extension of moratorium, higher-than-expected impairment losses and lower-than-anticipated write-backs.
Meanwhile, CIMB Securities Research, in a report, said AEON Credit’s FY25 net profit of RM370.6mil exceeded expectations, reaching 111.4% of its own forecast and 104.5% of the consensus full-year forecast.
“We cut our FY26 to FY27 earnings forecasts by 11% to 12% after raising our assumptions for credit costs and lowering receivable growth assumptions to reflect uncertainty over external tariff volatility,” said the research house.
CIMB Research kept its “hold” rating on AEON Credit with a lower TP of RM5.90.
