Aeon Thana Sinsap (Thailand) Plc (AEONTS), the Thai consumer loans unit of Japan's biggest credit-card company, gained to a record in Bangkok trading on speculation a rise in the minimum wage and government moves to increase domestic spending will boost earnings.
The shares jumped 5.4% to 92.75 baht at the noon trading break in Bangkok, heading for the highest close since the stock listed in 2001. The shares surged 12% on Tuesday after Aeon Thana reported third-quarter profit of 487.1 million baht (US$15.9 million), compared with a loss of 520.1 million baht a year earlier. The benchmark SET Index (SET) rose 0.3%.
Profit in the nine months ended Nov 20 was 1.14 billion baht, from a loss of 40.4 million baht a year earlier, the company said on Tuesday. Aeon Thana, controlled by Japan’s Aeon Credit Service Co, joins companies including Krungthai Card Pcl (KTC) and Siam Commercial Bank Pcl (SCB) in reporting higher net income from individual loans as wage rises and government tax incentives spur domestic spending on vehicles and other consumer products.
"Aeon Thana will further benefit from higher wages in 2013 as increased income will spur consumer demand for loans," Usanee Liurut, an analyst at Asia Plus Securities (ASP) in Bangkok, said in a report on Wednesday. "The decrease in bad loans will also be positive for the company’s earnings outlook."
Prime Minister Yingluck Shinawatra plans to raise the daily minimum wage by as much as 35% to 300 baht ($9.80) in 70 of the country's 77 provinces in 2013 to meet an election pledge.
Aeon Thana's nine-month revenue climbed 14% to 8.93 billion baht, while expenses for bad debts and doubtful accounts dropped 32% to 2.44 billion baht, according to a statement. As of Nov 20, Aeon had 2.04 million active customers, 61% of them outside Bangkok, the company said.
Yasuhiko Kondo, the company's managing director, was not available for comment after a call to his office.