KUALA LUMPUR: MIDF Research expects Aeon Co (M) Bhd's (Aeon Malaysia) prospects to improve from financial year 2022 (FY22) onwards.
The research house said this was in-line with the reopening of businesses and social activities, coupled with Aeon Malaysia's online merge offline (OMO) strategy and initiatives to accelerate the digital shift via myaeon2go.
MIDF Research has maintained its earnings estimates on Aeon Malaysia, in view of improved consumer sentiment and the company's position as a beneficiary of the economic recovery.
"We think that the company has an advantage as a retailer and asset owner at the same time while being backed by AEON Co Ltd," it said in a note.
Meanwhile, MIDF Research said Aeon Malaysia's net profit of RM28.1 million for the first quarter (Q1) ended March 2022 had come in within expectation.
The net profit in the period made up 25.0 per cent of the firm's and 25.5 per cent of consensus' full-year estimates.
"The better earnings were driven by better margins derived through improved purchasing strategy and enhanced negotiations coupled with disciplined cost management.
"No dividend was declared for the quarter," it said.
MIDF Research has maintained its "Buy" call on Aeon Malaysia with a revised target price of RM1.79 from RM1.74 previously.
"This was due to the company's effective business strategies and cost restructuring structure, MIDF Research added.