Saturday, June 01, 2013

AEON Co valuation based on performance of FYE 31 December 2012

The share price doubled in 2012. While PE ratios for the years between 2008 - 2011 were hovering between 12.22 and 13.00, PE for the year ended 2012 was increased to an astonishing 23.3 times!!

Such drastic increase may mean changes of something more fundamental, otherwise just a fluctuation of market forces that we should take advantage of (means it is time to sell la).

1. The historical growth of EPS was normal (on the face of it, the growth number is lackluster. but we know there were RM12.7m disposal gain in 2011.)  Growth of net dividend payout had been increased at 20% range year on year.

2. There is only one new store at Kulai expected to start in 2013. Two stores, Ipoh Station 18 and Seri Manjung that started in 2012, will have full 12 months earnings in 2013.

3. Taking into forecast profit growth consideration of 10% for Retailing, 25% for Property Management Services and 30% for interest income, my forecast EPS for year 2013 is RM0.72 per share (or 72 sen per share). Valuing at PE 13 times, the fair value of the share should be at RM9.36. One research house gave a more positive outlook and higher valuation at RM11.82.

Currently, the share price is RM17.64 at forecast PE of 24.5, which is ridiculously high.

Unless there is something that we don't know, i.e. disposal of old land at revalued price, new interested investors, corporate finance activities to securitise the property and put them into REIT, etc. otherwise, I am avoiding to buy more into this stock.