AEON Co. Bhd is sitting at 5-year lows. Here’s what’s going on

(Sorry, I used AI)

Not financial advice. Do your own research.

📍 Share Price: RM1.06
📊 Market Cap: RM1.48bn
💰 FY25 Net Profit: RM133.8m
🔁 Dividend Yield: 4.3%

The stock closed at RM1.06 this week — near its lowest level in five years. For a company that’s been in Malaysia since the 1980s, this is worth a second look.

Why has it fallen?

The pressures are real. Shopee, TikTok Shop, and 99 Speed Mart have all been taking wallet share from the mid-market general retail space AEON sits in. A recent quarter showed pretax profit down 28% year-on-year, and the stock has badly underperformed over the past 12 months.

The market’s read: AEON is caught in the middle — not cheap enough to compete with value grocers, not premium enough for the Ben’s crowd. Revenue has been essentially flat for three years. The sell-off is not entirely irrational.

But if you think AEON still has a place in Malaysia for the next decade, here’s what’s worth knowing.

AEON doesn’t just sell groceries. It also runs malls. The Property Management Services (PMS) segment collects recurring tenant income from retailers, F&B operators, and anchor tenants across its shopping centre network. This business doesn’t care much whether you’re buying your shampoo from Shopee — it cares whether tenants renew leases. And in the most recent quarterly results, PMS margin expansion was called out as a positive driver, even as retail softened.

The market is pricing both segments as one struggling business. When you value them separately — PMS closer to a REIT multiple, retail on a more conservative basis — most analysts land between RM1.42 and RM1.70/share. TA, RHB, and HLG are all on BUY. The stock is at RM1.06.

The earnings picture isn’t broken

FY Net Profits
FY21: RM85m
FY22: RM111m
FY23: RM115m
FY24: RM128m
FY25: RM134m ✅

Grew every year. At roughly 10x trailing earnings, you’re paying a low multiple for a business with 178 outlets nationally and a balance sheet that isn’t stretched.

You collect 4.3% while you wait

FY Dividend/share
FY21: 1.5 sen
FY22: 3.0 sen
FY23: 4.0 sen
FY24: 4.0 sen
FY25: 4.5 sen
FY26: 4.5 sen ✅

Tripled since FY2021. Payout ratio is ~50% — well covered by earnings, not being stretched to maintain it.

A couple of bonus angles

AEON Mall KL Midtown opens Q4 2026. Flagship city-centre location, adds to AEON’s PMS contributors.

The Ajinomoto precedent. Last week, Ajinomoto Malaysia’s Japanese parent announced a privatisation at RM20/share — a 31.6% premium to last price — citing low liquidity and the cost of staying listed on Bursa. AEON Co. (M) is similarly a subsidiary of Japan’s AEON Co. Ltd., which holds the controlling stake. A privatisation isn’t on the table that anyone knows of, but Japanese parents buying out Malaysian subsidiaries at a premium is now a very live playbook on Bursa. Worth keeping in mind.

Tripled since FY2021. Payout ratio is ~50% — well covered by earnings, not being stretched to maintain it.

One thing worth flagging: EPF has been selling

It’s fair to put this on the table. EPF has been a net seller of AEON over the past year or so, trimming its stake from around 13% down to approximately 6% — roughly half of what it held previously. As recently as May this year, EPF filed another disposal.

No one knows exactly why. EPF doesn’t publish reasons for individual portfolio moves, and it could be anything from routine rebalancing to a deliberate shift in view on the stock.

Institutional selling at this scale isn’t something to brush aside. It’s worth keeping in mind, especially if you’re sizing a position. What we can say is that EPF selling hasn’t changed the underlying fundamentals — profits are still growing, dividends are still being paid, and the PMS segment is still expanding margins. But it’s a signal that deserves respect, not dismissal.

TLDR

The retail headwinds are real, and the stock could stay unloved for a while. But at 5-year lows, with growing profits, a 4.3% yield, and a mall business the market seems to have forgotten about — the setup looks interesting for anyone with patience.