Addition to the BV, now with central bank impose Basel 3 requirement, you need to keep minimum 7% at all time for tier one capital. So if you growth your loan, your BV will need to grow too.

Hi I hold this counter since price was about Rm 3.7 and keep adding to the position when opportunities arise. When you look at the BV of the finance stock , give me an example in which banks counter doesn’t grow their book value? Unless Stop loan growth , loan being written down or a great fine coming from government to lower their book value maybe a case for Goldman Sachs. Important to look at here is the EPS growth , EPS growth rate for this counter is the highest compare to other banking counter even better than public bank , one thing public bank more superiors is the NPL lowest in MALAYSIA. So long NPL for this counter is manageable, Similar NPL with maybank , around 2+% ,I think the management of Aeoncr is doing great to push EPS higher and the intrinsic value for this counter will continue to go up.

Aeoncr-LR is not the same as aeoncr-LA(loan stock) , a lot of ppl kind of confused here. The aeoncr-LR is a right for you to exercise to buy aeoncr-LA and will expiring on 28-8-17, the Aeoncr-LR of what existing aeoncr shareholder received will become worthless after 28-8-17. For those who exercise their right and pay to buy Aeoncr-LA. You will receive Aeoncr-La after ceasation of the right and you have another right to convert your loan stock to the mother shares at 10.99 anytime within 3 years (or mandatory conversion on the end of 3rd year) with no conversion fee as you already pay to exercise your right before.

Theoretically, the right traded on 16/8 should be price at 0.148 if the mother shares is 12.62. If you hold 1000 Aeoncr, you can pay & subscribe 2000 ICULS. And if converted to mother shares you will get (2000/10.99) 181.98 mother shares. The different is the profit if you sell the shares at 12.62 which is about Rm 296.63. Rm296.63/ 2000 right = 0.148. The right price should not be far from the profit you will get from the conversion , bcos if there is any different , a trader can arbitrage and earn risk free return.

Currently the price is ~0.2 is a premium to the theoretical price. If those don't chose to increase share holding, better sell the right and buy at current mother shares price.

Looking at today price , the right price will trade around 0.115. How to calculate just follow my reply last time.

Theoretically, the right traded on 16/8 should be price at 0.2465 if the mother shares is 13.7. If you hold 1000 Aeoncr, you can pay & subscribe 2000 ICULS. And if converted to mother shares you will get 181.98 mother shares. The different is the profit if you sell the shares at 13.7 which is about Rm 493.17. Rm493.17/ 2000 right = 0.2465. The right price should not be far from the profit you will get from the conversion , bcos if there is any different , a trader can arbitrage and earn risk free return.

Before 10/8 you will still entitle, ex-date is 11/8

on the other hand, if you choose to subscribe the ICULS, prepare the cash and inform your broker before the dates of Acceptance and payment 06 Sep 2017.

the Renounceable Rights details has been spell out. important dates :Date for commencement of trading of rights 16 Aug 2017. Date for cessation of trading of rights 28 Aug 2017 , if you choose not to subscribe the ICULS, pls sell your right before 28/8/17 and use the proceed to buy ordinary shares of AEONCR, if not your existing share will get diluted. the right will be worthless after 28/8/2017.

Yes. I agreed. 10.99 is the exercise price, win or lose depends on if the shares price will go below 10.99 or more than 10.99. One thing for sure is the the largest shareholder who holds more than 50% of Aeoncr shares already confirmed will subscribe all its allocated ICULS. And they committed will not reduce their Aeoncr share holding before the right is issued (I think it help to boost some confident for small investor) . Since the Market already know the conversion is 10.99, if Market is efficient , let see if the price will go to 10.99 since there are more seller than buyer in the market now,as everyone is waiting to buy below 10.99.

When you subscribe today, you will receive the 3.5% dividend for three years. If you susbsribe two years later then you only entitle last year dividend. Coz after 3 years, the ICULS will be converted to shares.

KClow yup you are right. I thought it's non renounceable. So meaning if you want to take up the right , you need to pay the exercise price to convert to ICULS. And then convert from ICULS to mother shares.

Actually for short term it depends on market sentiment, If investors/speculators think the share is still undervalued then they will drive the price up. On the hand, drive the price down if think overvalued. You have asked a million dollar question .

If you don't susbsribe the right you lose out Rm 49.2 to those who susbsribe the right per 100 shares

The new shares of 39.31M added to the market will have a dilution effect if you don't subscribe the right. The money is being transfer from those who susbsribe the right and to those who didn't susbsribe the right. But if you choose to susbsribe then no dilution for your existing shares. Adding to the previous example , if you pay Rm 200 for 18.19 shares. At current shares price = 13.7 , 18.19 shares worth Rm 249.2. If you immediately convert the ICULS in the market and sell the shares at 13.7 , you make a good profit of Rm 49.2.

I think wrong calculation. This exercise Aeoncr will raise Rm 432M fresh fund from the ICULS. 432M / 10.99 = 39.31 M new shares will be added to current shares holding if all converted. So total shares at the end will be 216M + 39.31M = 255.31M. So if you have existing 100 Aeoncr shares now, you need to pay Rm 200 to susbsribe the ICULS and the number of share you will get after converting to mother shares is 200 / 10.99 = 18.19 shares. And with existing 100 shares , you hold total 118.19 shares after conversion.

Have you all received the dividend from broker?

My Rhb broker credited in but maybank broker hasn't.

Wondering why there is a delay.

pputeh, soon they will make announced for the ICULS to tell you the ex date, conversion price & etc.

pputeh, my understanding is you need to pay Rm 2000 to susbcribe the ICULS if you bought the shares before the ex-iculs date. If you dont pay to subsribe you wont get any ICULS, as they do this exercise to raise new fund.

Calculation is very simple. According to the proposal , they will issue ICULS to raise RM 432 M in cash. Currently number of outstanding shares is 144M , 144 x 3 = RM 432M. So if you hold 1000 shares of AEONCR out of 144M in the market, you are eligible to pay RM 3000 to buy their 3000 units of ICULS (1 unit = Rm 1) . And from ICULS to convert to AEONCR , you don't need to pay any cash according to the proposal, it's based on the conversion price. If the conversion price is RM 11.1 , then the number of AEONCR shares you will get is 3000 / 11.1 = 270.27 .

pputeh - the ICULS price will be the same no matter how high the share goes. It's Rm 3 x the number of shares you hold. But for the conversion price , if it goes higher will convert less shares

a negative free cash flow company won't give a retained earning growth from 233M in year 2012 to 866 M today. I think for financial stock is better to use FCF to equity holder ( FCFE) rather than FCFF. Bcos so long AEONCR management can pay its debt on time then I have no issue for them to use debt to fund growth. And they are issuing rights to raise fund, their debt level will drop significantly , which also giving them more capital to fund future growth.

The IFRS 9 or the Malaysian equivalent of MFRS 9, which takes effect on January 2018, is based on expected loss model unlike the existing standard, which is based on the incurred loss model.
Read more at http://www.thestar.com.my/business/business-news/2016/10/10/banks-may-not-have-to-raise-fresh-equity-capital/#OqFdfrK6wzehctLh.99

Market capitalisation do increase or decrease based on corporate action in short term. Imaging now if M&A proposal in any listed company , will it affect the market cap? Or issue massive right issue with big discount to dilute shareholder value will it also decrese the market cap? I believe it will .

Hi Ricky. I also think that the market capitalisation for Aeoncr will increase for the next 5 years based on its earning and dividend growth . But this ICULS thing, if existing sharesholder don't subscribe then they will tend to lose out due to the dilution effect for those who susbsribed and got convert to new shares of Aeoncr with discount. If you wanted to support the growth by all mean susbsribe the right,as for me I choose to hold position on Aeoncr , so it's better for me to sell the amount they wanted to borrow from me in the market and use the proceed to susbsribe the right later to maintain my shareholding .

i think this ICULS proposal will get 100% support from AEON Japan firstly bcos i think their came out with this idea, secondly they hold 61.85% shares and it is like asking money from their parent to expand. Total raise fund RM432M ,minimum they will get RM267.19M from AEON Japan even without any investors to subscribe. Given japan yen interest rate is at negative rate now , it only make sense for AEON Japan to invest more oversea and 3.5% is very attractive to them( assuming ringgit will not weaken further against jpy). but to us local investors are not very attractive , as some banks offer FD rates higher than 3.5% p.a. I think the more discount they set for the conversion price also meaning that they desperately need the fund from the public. then market might react to crash the price as investors can also go out to buy later. personally i don't wish they set the conversion price higher than 15% discount. it will only make aeoncr price cheaper.

Ricky I think you may miss out one feature about the ICULS , you can convert it to mother shares once you got the ICULS , no need to wait till 3 years for the maturity . And the conversion method is not by cash. Meaning you don't need to top up to convert to Aeoncr. It's just the money you pay to susbsribe the ICULS. For example , if you have 10000 Aeoncr now , you will need to pay Rm 30000 for ICULS . And how much shares you can convert for Aeoncr , it really depends on the market price they ex-date the ICULS and it said 15% discount from the market. So now I think they will be more seller then buyer in the market as ppl can rather wait to susbscribe the ICULS than buying Aeoncr now.

I agreed with for institutional and Aeon Japan is a plus as they can pay no broker fee to subscribe more AEONCR shares by converting the ICULS.

It is all depends on the conversion price which they will decide later. According to the proposal is 15% discount from TEAP price. Indicative it was set to 8.91, so 432Million / 8.91 = 48Millions of new Aeoncr shares .

Hi spaceneedle . Thanks for clarifying . If the conversion price set at Rm 8.91, then I can get around 336.7 units of Aeoncr for 3000 ICULS. If the shares price at the time of ex-date is above 8.91 then it will be worth to susbscribe, if the shares price below 8.91 then I can always back cheaper at the market right?

For disscussion purpose , current the major shareholder Aeon financial japan hold 61.85% of aeoncr. If all other investors dont Subscribe ICULS, then the dilution effect will benefit AEON financial japan more.and will their shareholding will increase in percentage term? From 61.85% to maybe 70%?

Sorry the conversion price will be Rm 5.67 - Rm 6.67 ( after adjusted for bonus issue, assuming conversion price 8.5-10 before bonus issued) . So for my 3000 units of ICULS , if it fixed at 6.67 then I can get 450 units of AEONCR.

Thank you for the reply. For the conversion price between 8.5 - 10 will be reduced to half after bonus issue right( if approved) so the conversion price will be between Rm4.25 - 5 . Assuming it's fixed at Rm 5 . For my 3000 units of ICULS can be converted to 600 units of Aeoncr shares after bonus issued right? I don't need to come up cash to do the conversion I supposed since I already paid Rm 3000 for the ICULS.

Just want to clarify the proposals, assuming i have 1000 shares of Aeoncr , after the bonus issue( assuming approved by shareholder) , my shares become 1500 and i can choose to pay Rm 3000 to subscribe 3000 units of ICULS ( if i choose not to buy the ICULS, other ppl convert the ICULS my share will be diluted) . And i can choose convert 3000 to Aeoncr shares anytime before the maturity or wait for 3 years to collect 3.5% p.a and it will be convert to aeoncr shares on the conversion rate will decide later. I dont need to pay extra for the conversion to Aeoncr shares . Am i understand the proposal correctly?

I think the right issue for raising Rm 432M is reasonable, mostly will convert to shares once I got it as the dividend yield now is higher than 3.5%( higher than coupon price)

actually issuing bonus issue doesn't change the fundamental of a company's value, and it incur cost from shareholder to the investment bank. most importantly is growing of the company's market capitalization , but nevertheless , it might create impression to certain people that the share price cost RM 3 is cheaper than RM 15. personally , i rather them to declare more dividend than bonus issue.

enjoyinglife Any supporting news for potential growth on this counter?


for the last 5 years, its EPS grew 20+% every year. You need the right business model, excellent management and team to be able to deliver this kind of return. For the next 5 years, i think the growth will be double digit too as they just penetrated into SME loans and its receivables is growing at a very healthy rate. Looking forward to see their financial result this quarter.

Last time this counter's PE ratio hit 16 before, current PE is only 10. It may reach Rm 26 or more If market revalue its earning per share's growth potential.

https://researchnews.affinhwang.com/Research/DailyReports/20160926/Affin%20Hwang%2020160926%20AEONCredit%20CU%20(2).pdf

Did you all already get your bonus issues? I am using Maybank share nominee account, till now I haven't received.

https://researchnews.affinhwang.com/Research/DailyReports/20160422/Affin%20Hwang%2020160422%20ACSM%20RN.pdf

Consistence performance counter. Fulling all criteria to be a growth stock. Hope it will be revalued to PE 20 soon.

Wrongly calculated. It's actually positive CF . Bcos this is not a manufacturing company where the operating CF is positive by selling its products from production. This stock is like any banks shares where they need to support their loan growth.

how to unlock the profit >?.. i think market discount this share for corporate governance problem... if directors can treat minority investors nicer by paying more dividend ... i think this share will fly...

Holding GE shares alone is greater than it''s market cap

is market making some kind of mistake?

mega sales today?

ya. i think revenue will not affected directly as higher inflation meaning people tend to need more demand in loans. but in term of loan quality i think it will affect.. NPL may deteriorate as when inflation is high, ppl will have higher tendency to default the loan. If aeon credit too picky on the borrower quality, it will then slow the revenue growth.

with the recent budget announcement ,gst and petro's price increased. the lower income group are the ppl who will suffer the most. And the revenue of Aeon credit mostly come from the group. i think that's y explain the free fall now.

but Aabar bought at $7.00 per share in 2011. they should be happy as price now is $8.9. lol