Aeon Credit – Understanding its business.

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Aeon Credit operates in the financing industry in the following segments:

1. Vehicle Easy Payment (VEP) segment (main segment)
-Motorcycle easy payment (MEP)
-Car easy payment, mainly used cars (CEP)

2. Household appliances General Easy Payment (GEP)

3. Personal loans

4. Credit cards

5. Other incomes:
-Fees from credit card processing
-Insurance fees
-Aeon Big loyalty program processing fees.


Consumer sentiment could weigh on the business of the provider of mirco credit financing’s loan growth.

Aeon Credit’s loan growth will continue to be driven by its vehicle easy payment (VEP) segment which is the largest contribution to the group’s revenue.

The research firm noted Aeon Credit’s loan portfolio comprised primarily of VEP which made up more than half of the micro credit financing provider’s total loans.

Aeon Credit’s VEP include motorcycle easy payment (MEP) and car easy payment (CEP) mainly used cars.

Aeon Credit also provide financing for the purchase of household appliances under general easy payment (GEP), personal loans and credit cards.

Aeon Credit’s other income line include recoveries as well as fee income from credit card processing fees, insurance fees and Aeon Big loyalty programme processing fees.


The parent AEON FINANCIAL SERVICES JAPAN owns 59.7% of the company.

They operate in the financing industry for automobile, motorcycles, general easy payment (GEP), credit and personal financing.

They collect an effective gross yield of
– 14% for automobile,
– 21% for personal financing,
– 27% for GEP and
– 21-27% for motorcycles.

This business is highly profitable as they are able to cater to the financing needs of households.


Re: Aeon Credit
« April 23, 2016, 01:04:41 PM »

TA (Total Asset) = RM 6097.5 m

Rev/TA 15.8%
EBIT/TA 7.6%
Finance Cost/TA 2.7%
PBT/TA 4.9%
Tax/TA 1.2%
PAT/TA 3.7% :thumbsup: (Return on Total Assets)

Total Borrowings 4908.1
Cost of borrowings 3.3%

Total receivables 5394.9
Finance Cost/Total receivables 3.0%,75807.msg1477954.html#msg1477954


« September 28, 2018, 12:48:06 PM »

Ratios & Margins AEON Credit Service (M) Bhd
All values updated annually at fiscal year end

P/E Ratio (TTM) 12.43
P/E Ratio (including extraordinary items) 13.07
Price to Book Ratio 2.18

EPS (recurring) 2.52
EPS (basic) 1.43
EPS (diluted) 1.38


Gross Margin +70.72
Operating Margin +54.03
Pretax Margin +29.26
Net Margin +21.04

Return on Assets 3.82
Return on Equity 23.21
Return on Total Capital 10.13
Return on Invested Capital 5.09

Interest Coverage 3.24

P/E Ratio (TTM) 12.38 (09/28/18)
EPS (TTM) RM1.31
Market Cap RM3.97 B
Shares Outstanding 249.74 M
Public Float 72.70 M
Yield 2.47% (09/28/18)
Latest Dividend RM0.20 (07/19/18)
Ex-Dividend Date 06/27/18


Aeon Credit versus LPI


ACSM – Quarterly Results for the Third Quarter ended 30.11.2018.pdf

Performance Review
The Company‟s revenue recorded 11.6% and 8.7% growth for the current quarter and nine months ended 30 November 2018 as compared with the previous year corresponding period. Total transaction and financing volume in the current quarter and nine months ended 30 November 2018 had increased by 49.5% to RM1.488 billion and by 26.4% to RM3.887 billion respectively as compared with the previous corresponding period ended 30 November 2017.

The gross financing receivables as at 30 November 2018 was RM8.313 billion, representing an increase of 15.41% from RM7.203 billion as at 30 November 2017. The net financing receivables after impairment was RM7.737 billion as at 30 November 2018 as compared to RM7.034 billion as at 30 November 2017.

Nonperforming loans (NPL) ratio was 2.05% as at 30 November 2018 compared to 2.48% as at 30 November 2017.

Other income was recorded at RM27.999 million for the current quarter and RM105.574 million for the nine months ended 30 November 2018 respectively, mainly comprising bad debts recovered, commission income from sale of insurance products and loyalty programme processing fees.

Ratio of total operating expense against revenue was recorded at 55.6% for the current quarter as compared to 60.9% in the preceding corresponding period. The decrease is mainly due to increase in revenue.

The Company recorded a profit before tax of RM118.072 million for the current quarter and RM357.068 million for the nine months ended 30 November 2018, representing a growth of 23.9% and 21.9% respectively as compared with previous year corresponding period.

Funding cost for the current quarter was higher as compared to the preceding corresponding quarter mainly due to higher borrowings in line with the growth of receivables. The nominal value of borrowings as at 30 November 2018 was RM6.348 billion as compared to RM5.513 billion as at 30 November 2017.


How to read its accounts to understand its business.

Look at how much they have grown its financing receivables.

Here is how to study its accounts:

Interest income earned
less Interest costs incurred
less provision for loan losses
Net Interest income earned
Add Non interest (fees) income earned
Gross income
less Operating Expenditure
Profit Before Tax
less Tax
Profit After Tax

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