AEONTS: Facing Sell on the Fact

As soon as Aeon Thana Sinsap (Thailand) Public Company Limited (AEONTS) reported 3Q20 consolidated financial statements, traders urgently began selling large quantities of stock, leading to a Sell on the Fact phenomenon. The share price of AEONTS on Wednesday, Jan. 13 dropped more than 6% and on Friday, Jan. 15 the price further declined by 3.77% despite showing a net profit of 1,009 million baht YoY.

 

The earnings increased from 990 million baht in 2020, while the first nine-months of 2020 net profit was 2,506 million baht, down from 2,919 million baht a year ago. 

 

However, there is a concern among investors as the figure of operating result mostly reported a decline in revenue, for example, the credit card revenue was only 1,529 million baht, a decrease of 19% YoY and 6% QoQ. Meanwhile, for the first nine-months, the credit card revenue was 4,888 million baht, down 14% from 5,651 million baht a year ago. 

 

Loans revenue was 2,616 million baht, a decrease of 14% YoY and 10% QoQ. For the first nine-months of 2020, the revenue dropped 4% YoY to 8,596 million baht, dropping from 8,988 million baht.

 

Only hire purchases that grow well. The revenue from this sector was 249 million baht, increasing 30% YoY and 4% QoQ. While, the nine-month period’s revenue was 738 million baht, increased 44% from 513 million baht a year ago.  

 

Plunging AEONTS to be in “less loans…more hire purchase” situation.!!

 

Even though, among all consolidated financial results, the good overall performance of those was hire purchase, the distribution was only 4%, while credit card revenue has generated more than 66% to the company’s loan portfolio.   

  

Moreover, AEONTS’s earnings have been pressured by the Bank of Thailand cutting the ceiling rates of interest rates on credit card from 18% to 16% per annum and personal loan from 28% to 25% per annum, in order to help debtors who are affected by Covid-19. 

 

As a result, traders expressed their worries on AEONTS‘s 3Q20 consolidated financial statements despite posting a profit,…prompting its stock to face large quantities of selling.