Date: 16 September 2024
Broker Name: UOB Kay Hian

Aeon Thana Sinsap (Thailand) (AEONTS), a prominent consumer finance company in Thailand, is expected to deliver a solid performance in its 2QFY24 results, driven primarily by gains from sales. The company is forecasted to benefit from the sale of written-off accounts, which will provide a boost to its bottom line. This strategic move is set to enhance AEONTS’ profitability, despite a competitive lending environment.

Key Highlights:

2QFY24 Results Preview:
AEONTS is projected to report robust financial results for the second quarter of fiscal year 2024, supported by gains from sales of written-off accounts. These gains are expected to significantly contribute to the company’s profitability, helping it navigate through a challenging lending market. The gains from these sales will offset the modest growth in its core lending business.

Lending Environment:
The consumer finance sector in Thailand has faced increased competition, with more players entering the market. However, AEONTS continues to maintain a strong position in the sector, leveraging its established brand and extensive customer base. The company’s strategic focus on prudent risk management and cost control measures has also contributed to its resilience.

Profitability Boost:
The gains on sales of written-off accounts will support AEONTS’ profitability in 2QFY24. This is a key component of the company’s strategy to improve its bottom line amidst slower loan growth. AEONTS has been proactive in managing its portfolio, ensuring that non-performing loans (NPLs) are contained, while maximizing returns from sales of non-performing assets.

Financial Outlook:
AEONTS’ financial outlook remains stable, with the company expected to continue benefiting from its diversified portfolio of financial products, including personal loans and credit cards. While loan growth may remain moderate, AEONTS is well-positioned to generate steady returns, supported by gains on sales and disciplined cost management.

In summary, Aeon Thana Sinsap (Thailand) is poised for a profitable second quarter, with gains from sales of written-off accounts providing a crucial boost to its financial performance. The company’s focus on managing risks and optimizing its asset portfolio ensures continued resilience in a competitive consumer finance landscape.