Although AEON Credit Service (M) Bhd's nine-month period ended Nov 30, 2024 (9M25), broadly met RHB Investment Bank Bhd's (RHB Research) expectations, the research house still lowered its target price projection to RM8 from RM8.40.

However, RHB Research has maintained its BUY recommendation for AEON Credit as the research house is expecting a rebound by them in the four quarters ended December 30, 2024 (4Q25).

According to the research house, while credit costs could also moderate in line with historical trends, the rebound will be driven by robust financing demand.

RHB Research said AEON Credit's 3Q25 net profit of RM62.1 million brought the 9M25 figure to RM239.6 million, forming 66% and 60% of the house and consensus full-year estimates.

"For 9M25, total operating income growth continued its strong momentum, up 14% year-on-year (YoY) from strong net interest income (15%) and non-interest income (6%), though this was offset by a 20% increase in operating expenditure.

"The main drag on profit, however, came from impairment allowances, where credit cost reached 5% in 3Q25 compared to 4.4% in 2Q25 and 4.7% in 3Q24," RHB Research said in a note.

Despite that, the research house said AEON Credit's gross financing receivables stood at RM13.7 billion in November 2024, up 15% YoY and 4% quarter-on-quarter.

"On a year-to-date basis, the growth of 16% is ahead of the management's 10% target for the year," the research house said, adding that it has lowered AEON Credit's FY25F-FY27F earnings by 4%, 3% and 3%, respectively, as it factors in higher credit cost assumptions.

Overall, RHB Research said AEON Credit remains its top pick among the non-bank lenders for its strong growth outlook powered by diversified offerings, which now includes an up-and-running digital bank.