Risk-reward looking favourable; upgrading to BUY

For FY20E, we lowered our earnings estimate by 8.2%, partly to incorporate potentially lower sales in a subdued 2Q20 while the FY21-22E earnings are adjusted by +0.6/0.7%. Assuming no major second Covid-19 outbreak in the country, we foresee a sharp EPS recovery of 77% in 2021, off a low base. With the stock trading at 13x PER, negatives seem priced in, in our view. Upgrade Aeon to BUY, albeit with a lower 12-month TP of RM1.00, based on 15.5x 20

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