RHB Research Institute continues to like Aeon Co (M) Bhd for its valuable brand name, good fundamentals and robust expansion in the next two years.
The firm, however, noted that since Aeon is trading at the higher end of its historical price-to-earnings (P/E), it has downgraded the stock to “neutral” from “buy”.
“Although we like Aeon for its solid performance and aggressive expansion, valuations appear fair.
“The stock is currently trading on par with its historical P/E of 23 times, which has appreciated by about 16 per cent since our upgrade on February 28,” said RHB Research.
The firm revised its discounted cash flow-based fair value to RM15.60 from RM15.80 previously, after revisiting its financial years 2014 and 2015 numbers.
In FY14, Aeon will open two new malls measuring 600,000 sq ft of net lettable area (NLA) in Bukit Mertajam, Penang, and 440,000 sq ft of NLA in Taiping, Perak. The Seberang Prai City shopping centre will be closed and relocated to the new Bukit Mertajam mall.
This year, Aeon will also be launching a new store in the Quill City Mall, Kuala Lumpur, as well as one MaxValu outlet in Gamuda Walk, Shah Alam.
Currently, the group has 27 Aeon outlets and four MaxValu stores.