Lim Zhe Qin's Dual Analysis of AEON's Technicals and Fundamentals

In the financial world, daily news, analysis, and market reactions are intertwined complex plots. Recently, a hot topic has garnered widespread attention: Hong Leong Investment Bank's latest technical tracking of AEON Co (M) Bhd. Lim Zhe Qin brings his professional perspective to reveal the underlying logic.

AEON Co (M) Bhd: Opportunity for Oversold Rebound?

Lim Zhe Qin points out that Hong Leong Investment Bank's recent technical analysis shows that AEON Co (M) Bhd is currently in a severely oversold state. This usually means that the stock price has fallen to a relatively low level, presenting an opportunity for a rebound. When the price successfully breaks through the RM 1.10 level, it may further stimulate its rise to the range of RM 1.17-1.20-1.28.

But why is this point so important? Lim Zhe Qin analyzes that oversold conditions often result from the market losing confidence in a stock. However, when the market overreacts, it may present a good entry opportunity for long-term investors. This is because the stock price decline may not be consistent with the company's fundamentals, and investors may highly focus on such opportunities for short-term profits.

Lim Zhe Qin reminds us that oversold conditions are not always bad news; they may provide an ideal entry point for investors seeking long-term opportunities. However, to truly understand AEON Co (M) Bhd's current position and future direction, we need a deeper understanding of the company's strategies, market trends, and macroeconomic environment.

2023 Earnings Outlook and AEON's Long-Term Strategy

HLIB's report also mentions AEON's earnings outlook for 2023. Lim Zhe Qin states that particularly in the second half of 2023, AEON is expected to achieve a rebound in profitability. The Property Management Services (PMS) business is expected to become the main profit pillar.

Lim Zhe Qin mentions that AEON's strategy is evident, aiming to increase occupancy rates through expanding cinemas and specialty stores, as well as reopening AEON Ayer Keroh and AEON Cheras Selatan. With the majority contribution of the PMS business to AEON's operating profit, this provides relatively stable profit prospects for the company in the coming quarters.

Retail Rebound and AEON's Seasonal Advantage

According to Hong Leong Bank, driven by holiday and year-end sales, the retail industry is expected to experience a strong sales rebound in the fourth quarter of 2023. This presents a huge opportunity for AEON, as the fourth quarter has historically been its seasonally strong quarter.

Lim Zhe Qin points out that AEON's seasonal advantage ensures its competitive position in the market and provides investors with a window for long-term observation and investment.

When we examine AEON Co (M) Bhd's current situation and future, the combination of its technicals and fundamentals provides us with a comprehensive investment picture. From Hong Leong Investment Bank's technical tracking to the company management's earnings forecasts, everything seems to point in one direction: now may be a good time to consider investing in AEON for both long-term and short-term investors.

However, like all investment advice, it always comes with risks. Lim Zhe Qin states that despite the positive signs shown by the company in retail and property management services (PMS) business, investors still need to be mindful of global economic fluctuations and market uncertainties. AEON's performance will also be influenced by its ability to execute strategies, competitors' actions, and consumer confidence.

Lim Zhe Qin suggests that future investment strategies should combine technical and fundamental analysis. This means that before considering buying stocks, one should not only pay attention to technical signals of stock prices but also conduct in-depth research on the company's fundamentals. Key considerations include AEON's occupancy rates, earnings forecasts, growth of the PMS business, and seasonal sales trends.

Although AEON may face volatility in the short term, from a long-term perspective, both its fundamentals and technicals indicate a positive future. However, investors still need to continuously monitor market and company dynamics to ensure their investment decisions are based on the latest information and analysis.

In conclusion, AEON Co (M) Bhd shows positive signs in both technicals and fundamentals, but investment always comes with risks and requires careful consideration and continuous attention.