KUALA LUMPUR (Sept 30): AEON Credit Service (M) Bhd (KL:AEONCR) fell to its lowest in nearly a year while analysts turned cautious following a weaker-than-expected quarter at the consumer finance firm.
At least two research houses downgraded the stock post-results. Earnings in the first-half only accounted for about one-third of the consensus’ full-year forecast, and there are now concerns over rising provisions and write-offs of bad loans going forward.
“In our view, this negative trend is likely to persist” into the rest of the financial year ending February 2027, CIMB Securities said and lowered its recommendation to 'reduce' from 'buy'.
AEON Credit fell as much as 19 sen or a little under 4% to RM5.00, their lowest since October 2025. The stock closed at RM5.02, down 17 sen or 3.3%, valuing the group at RM2.56 billion.
Shares of AEON Credit have been volatile this year as non-performing loans crept up while the company grappled with general slowdown consumer spending on big-ticket items amid macroeconomic uncertainties. Year to date, the stock has lost 12% of its value.
RHB Research, meanwhile, cut its recommendation to 'neutral' from 'buy' and flagged rising non-performing loans weighing on profitability.
AEON Credit’s pivot towards customers with better credit quality has also led to lower asset yields and some compression in net interest margins, further limiting earnings growth, the house noted.
“While financing growth remains healthy, we believe the combination of higher credit costs and weaker yields warrants a more cautious stance,” RHB Research added.
The stock still has three 'buy' calls from the five analysts tracked by Bloomberg. The average 12-month target price stood at RM6.25.
On Tuesday (Sept 29), AEON Credit reported an 18% year-on-year decline in net profit to RM59.30 million for the second quarter ended Aug 31, 2026, as higher impairment losses on financing receivables offset 7.7% growth in revenue. For the first half, net profit rose 3.1% to RM154.47 million.