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AAPICO HITECH PLC [AH]
Q3 2017 Performance & Business Update
Opportunity Day
The Stock Exchange of Thailand
December 4, 2017
Today’s Agenda
2
1. Company Information
2. Thailand Automotive Industry Update
3. Financial Performance
4. Strategy & Direction
Company Information
AAPICO HITECH PLC [AH]
4
AAPICO HITECH PUBLIC COMPANY LIMITED
• Established in 1996 and listed on SET in 2002.
• Main businesses: OEM Auto Parts, Jigs and Dies,
Car Dealerships and Car Navigation.
• Main locations: Thailand, Malaysia and China.
• Comprising of 37 companies (27 subsidiaries and
10 associates).
• Registered and paid-up capital of Baht 322.58
million, comprised of 322,583,844 ordinary shares
at par value of Baht 1 each.
Industry/Sector : Auto
Current price : Baht 36.25*
52 weeks range : Baht 13.30 – 38.25
Market Cap : Baht 11,694 million
P/E (YTD) : 12.41*
P/BV : 1.74*
Dividend yield : 1.83%**
TRIS / CG Rating : BBB+ /
* Data as of November 30, 2017
** Dividend yield is calculated based on current share price
AH Shareholding Structure
5
Data from Share Register Book as of
August 31, 2017
Sojitz Corp.
15.76% AH; 1.86%
NVDR; 9.25%
Institution - Foreign
2.34%
Institution - Thai
7.25%
Individual -
Thai
25.20%
Individual -
Foreign
0.09%
Yeap Family
38.24%
AH Shareholding Structure
AH’s main shareholders are Yeap Swee Chuan and
family holding 38.24% of total capital and Sojitz
Corporation holding 15.76% of total capital.
4,710 4,452
3,387
5,161
11,694
2013 2014 2015 2016 2017*
Market Capitalization
+148%
*Based on share price as of November 30, 2017
AH Share Price since Jan 1, 2017
6
16.00 16.50
20.10
25.50
37.75
12.00
17.00
22.00
27.00
32.00
37.00
42.00
12/16 1/17 2/17 3/17 4/17 5/17 6/17 7/17 8/17 9/17 10/17 11/17
FY2016 Results
Announcement
Q1 2017 Results
Announcement
JV Sakthi
Announcement
+127%
AH Share price (in Baht)
Q2 2017 Results
Announcement
Q3 2017 Results
Announcement
AH Board of Directors
7
Mr. Yeap Swee Chuan
Present & CEO
Executive Director
Mr. Kenneth Ng
Independent Director
Audit Committee
Ex ING Head of Research
Mrs. Teo Lee Ngo
Executive Director
Mr. Pipat R. Punya
Independent Director
Chairman of Audit Committee
Lawyer
Mr. John Parker
Independent Director
Chairman of Risk Committee
Ex Chairman of Ford Asia Pacific
Mr. Wichian Mektrakarn
Independent Director
Audit Committee
Ex CEO of AIS
Mrs. Vachira Na Ranong
Independent Director
Risk Committee
Chairman of TIA
Mr. Kai Taraporevala
Independent Director
Audit Committee
Ex President of TATA Capital
AAPICO’s Vision
8
Where do we want to go?
How do we want people to remember us?
MANUFACTURING
RESEARCH & DEVELOPMENT
CAR RETAILING
TO BECOME A
LEAN, GREEN, HAPPY, DIGITAL
WORLD-CLASS CORPORATION
• S : Safety
• Q : Quality
• C : Cost
• D : Delivery
• E : Engineering
• M : Management
(Focus Digital)
• Teamwork
• Look at problems as
opportunities
• Love Family, Company
and Country
• Loyalty and Honesty
• Mutual Respect
• Profitability
• Reasonable Dividend
• Corporate Social
Responsibility
Happy Employees Happy Shareholders Happy PublicHappy Customers
AAPICO Key Fundamental Values
Business Segments
9
Manufacture of Auto Parts(Thailand & China)
Car Dealerships
(Thailand & Malaysia)
Technology(Thailand)
~63% of total revenue ~37% of total revenue<1% of total
revenue
Thailand
Malaysia
Stamping &
Assemblies
Forging &
Machining
Plastic
Jigs and Dies
Countries of Operations
10
Thailand
72%
Malaysia
24%
China
4%
Jan-Sep
2017
Sales by Country
CHINAKunshan
Production: Connecting rods
and Copper Forging
MALAYSIAKajang & Petaling Jaya
Car dealers: Honda car
THAILAND Ayutthaya, Chonburi, Rayong, Samutprakarn
Hitech Industrial EstateProduction: Stamping parts
and Stamping Dies & Jigs
Amata Nakorn Industrial EstateProduction: Stamping & Chassis Frames
and Forging & Machining Parts
Bangpli Industrial EstateProduction: Plastic Parts
Amata City Industrial EstateProduction: Stamping Parts
Plastic Washers & Fuel Tanks
Mitsubishi DealersNavanakorn & Ramindra
Ford DealersSamutprakarn & Ladprao
OEM Customers
11
Isuzu
40%
AAT*
16%
Nissan
7%FORD
4%
GKN
4%
AAM
4%
TOYOTA
3%
Others-
Parts
22%
Jan-Sep
2017
Top OEM Customer Profile
*Auto Alliance (Thailand) Co., Ltd – a JV between Ford and Mazda.
Our Partners
12
Technical PartnersJoint VenturesStrategic Partner
Sakthi Product Range
13
Sakthi Automotive products are specialized
in safety and critical components.
Thailand AutomotiveIndustry Update
Thailand Car Production Volume
15
312 271 254 266 276 264
302
188 207 219 191 200 192
214
507 487 483 468 486 465
527
-
100
200
300
400
500
600
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
Pick-Up/PPV Passenger Others Domestic Sales Export Sales
837 842
618 612
1,477 1,478
9M16 9M17
Total Car Production by Quarter Jan-Sep Car Production
+9.0%
yoy
+0.7%
yoy
Q3 2017 Total car production volume grew by 9.0% year-on-year, driven by
increased export volume and domestic sales.
‘000 Units
Source: The Federation of Thai Industry (Automotive Industry)
283 303
204 245
70
73 557
621
9M16 9M17
Domestic Car Sales Volume
16
Domestic Car Sales by Quarter Jan-Sep Domestic Sales
+11.5%
yoy
99 93 90 111 107 94 102
58 71 75
76 80 81
83
24 23 23
25 23 24
25 182 187 188
212 210 199
211
-
100
200
300
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
1-Ton Pick-Up/PPV Passenger cars Other vehicles
+12.2%
yoy‘000 Units
Q3 2017 Domestic sales grew by 12.2% year-on-year, driven by
recovering economy, increased spending, new models and motor show.
Source: The Federation of Thai Industry (Automotive Industry)
Export Volume
17
Export Volume by Quarter Jan-Sep Export Volume
901 850
9M16 9M17
308 287
306 288 284
252
314
-
100
200
300
400
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
Export Volume
-5.6%
yoy
Q3 2017 Export volume grew year-on-year by 2.5%, driven by
increased volume in almost all markets.
Source: The Federation of Thai Industry (Automotive Industry)
+2.5%
yoy‘000 Units
Financial PerformanceJanuary – September 2017
Financial Highlights
19
Solid revenue growth, driven by auto industry
growth in TH and CN, good car sales in MY, and THB
86 million interest income from SGAH.
Gross profit margin below last year, mainly due to
rebate to customer for new project and lower
margins in the car dealerships.
SG&A expenses included unrealized FX loss.
Finance costs increased due to loan to finance SGAH
investment.
Higher share of profit from associates, mainly from
Hyundai and Able Sanoh.
Net profit margin improved yoy to 5.8% of sales,
hence improving ROE and ROA.
Q3 2017 ResultsIn Million BahtQ3
2016
Q32017
Revenues
Growth%
3,619
-1.4%
4,284
+18.4%
Gross Profit
GP Margin (%)
182
5.2%
202
5.0%
SG&A 189 252
Associate 75 118
Interest & Tax 41 53
Net Profit
NP Margin (%)
132
3.7%
248
5.8%
ROE (%) 8.4% 14.7%
ROA (%) 4.4% 7.3%
D/E (x) 0.46 0.78
AAPICO Group : Total Revenues
20
3,910 3,681 3,6193,929 3,946 3,903
4,284
-
1,000
2,000
3,000
4,000
5,000
6,000
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
Total Revenues by quarter
Auto parts Car dealers Non-op income
11,20812,133
9M2016 9M2017
Jan-Sep Revenues
Q3 2017: Revenue grew 18.4% yoy, driven by higher auto part sales in
TH and CN, in line with industry trend, and good car sales in MY. Q3
revenue included THB 86 million interest from loan to SGAH.
Jan-Sep 2017: Revenue grew 8.2% yoy, mainly driven by THB 147 gain
from sale of investments and THB 107 million of interest from loan to
SGAH.
THB million
8.2%
yoy
18.4%
yoy
Auto
parts
62%
Car
dealers
36%
Non-op income
2%
9M17
Auto Parts : Sales & EBIT
21
5.5% 5.0% 3.7% 2.7%8.3%
4.9% 3.5%
-
1,000
2,000
3,000
4,000
5,000
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
Sales and EBIT by quarter
Thailand China EBIT%
7,027 7,267
4.8% 5.5%
9M2016 9M2017
Jan-Sep Sales & EBIT
Q3 2017: Revenue grew 16.6% yoy, driven by growth in both China and
Thailand, in line with industry trend. EBIT was impacted by rebate to
customer for new project.
Jan-Sep 2017: Revenue grew 3.4% yoy, driven by higher sales in both
Thailand and China. EBIT margin improved from 4.8% in Jan-Sep 2016
to 5.5% of sales.
THB million
3.4%
yoy
16.6%
yoy
TH
94%
CN
6%
9M17
Car Dealers : Sales & EBIT
22
2.3% 2.2% 1.8% 1.9% 1.3% 1.3% 1.2%
-
1,000
2,000
3,000
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
Sales and EBIT by quarter
Thailand Malaysia EBIT%
3,8744,234
2.1% 1.3%
9M2016 9M2017
Jan-Sep Sales & EBIT
Q3 2017: Revenue grew 13.5% yoy, driven by good car sales in both
Malaysia and Thailand, attributable to new model introduction. EBIT
was impacted by increased competition.
Jan-Sep 2017: Revenue growth was driven mainly by good car sales in
Malaysia. EBIT margin dropped from 2.1% in Jan-Sep 2016 to 1.3% of
sales.
THB million
9.3%
yoy
13.5%
yoy
TH
33%
MY
67%
9M17
EBITDA: Good improvement vs. LY
23
347 321286 272
321
451
339
-
200
400
600
800
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
Unit: in Million Baht
EBIT Depreciation
954
1,112
9M16 9M17
EBIT Depreciation
3.9%2.7% 2.4%
3.9%
7.5%
4.3%
8.7% 7.9%6.9%
8.1%
11.6%
7.9%
0%
5%
10%
15%
2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
Unit: as % of revenueEBIT% EBITDA%
3.6%5.2%
8.5%9.2%
9M16 9M17
EBIT% EBITDA%
16.5%
yoy
Net Profit: Significant improvement
24
156133 132 149
228
323
248
-
100
200
300
400
500
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
Unit: in Million Baht
Profit from operations Associate income
421
799
9M16 9M17
Operations Associate
4.0% 3.6% 3.7% 3.8%
5.8%
8.3%
5.8%
0%
5%
10%
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
Unit: as % of revenueNet Profit %
3.8%
6.6%
9M16 9M17
Net Profit %
90%
yoy
Profitability continually increased
25
6.6% 8.1% 8.4% 9.3% 10.2%12.9%
14.7%
0%
10%
20%
30%
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
Unit: in percentage
ROE (In the Quarter) ROE (Seasonally adjusted)
R
O
E
R
O
A3.3%
4.1% 4.4%5.0% 5.5%
6.3%7.3%
0%
2%
4%
6%
8%
10%
12%
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
Unit: in percentage
ROA (In the Quarter) ROA (Seasonally adjusted)
Ability to service debt improved
26
3.6 4.5 4.8 5.66.4
8.1 8.4
0.0
4.0
8.0
12.0
16.0
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
Unit: times Interest Coverage Ratio (In the Quarter)
Interest Coverage Ratio (Seasonally adjusted)
I
C
R
Deb
t /
EB
ITD
A
2.8 2.6 2.5 2.4 2.23.2 2.9
0.0
2.0
4.0
6.0
8.0
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17
Unit: times Debt to EBITDA (In the Quarter)
Debt to EBITDA (Seasonally adjusted)
Net gearing in line with target
27
Net interest-bearing debt to equity ratio as of Sep 2017 was
0.78x, in line with the Company’s target of less than 1.00x.
Total liabilities net cash (Net debt) to equity ratio as end of Sep
2017 was 1.10x, which was also below the financial covenant
target of less than 2.00x.
ST
68%
CPLTD
21%
LT Loans
5% Bond
6%
Interest-bearing Debt
Interest-bearing debts as
of Sep 2017 was THB 5.3
billion, of which mainly
related to funding for
SGAH investment.
1.07
0.850.67
0.550.40 0.36
0.81 0.78
1.74
1.26
1.07
0.870.74 0.71
1.12 1.10
0.0
0.5
1.0
1.5
2.0
0.0
2.0
4.0
6.0
8.0
2012 2013 2014 2015 2016 1Q17 2Q17 3Q17
Unit: in Billion Baht Debts Equity D/E (L-C)/E
Strategy & Direction
Attributes of AAPICO
29
110
9
8
765
4
3
2
The 1st Thai listed company having a global footprint to expand through strategic partnership with
Sakthi, a strong Indian company with footprints in India, Portugal, USA, China and Mexico.
A professionally managed company
with good corporate governance and
integrity.
An independent and competent
board to guide and provide
good strategy.
A strong family company in
strong partnership with other
strong family companies in India
and China.
Ability to combine with its global
partners and make larger strategic
acquisitions.
Many strong global JV partners and
successful operations in Thailand.
The only listed company in the
auto sector to issue bond with a
BBB+ rating.
A top Tier 1 automotive
supplier in Thailand with
proven record of good
Quality, Cost, and Delivery.
Ability to win more business
when a new model is being
introduced by the OEMs.
A strong financial
planning company.
Key Milestones
30
Taking steps toward globalization 2017
2013-2016
2008-2012
2005-2007
2002-2004
• Listed on SET.
• Acquired a chassis
frame factory from
Dana Corporation.
• Expanded to China.
• Established strategic
global partnership
with Sojitz Corp.
• Established JV with
Mitsuike Corp.
• Acquired forging
business from KPN.
• Established JV with
Minth Corporation.
• Established JV with
Takagi Seiko.
• Completed
construction of 3S
showroom in
Malaysia.
• New factory in
Kunshan (China)
started operation.
• Established JV with;
Lemtech (Taiwan)
Edscha (Germany)
Sumino (Japan)
Sodecia (Portugal)
• Explored opportunity
in the start-up
business.
• Established AAPICO
Training Center.
• Issued bond with a
BBB+ credit rating.
• Achieved 4-star CG
rating.
• Established
strategic global
partnership with
Sakthi Group and
invested US$100
million for 25.1%
stake in Sakthi
Global Auto
Holding Limited
(SGAH).
Global Business Strategy
31
CHINAINDIA
EUROPE
USA JAPAN
THAILAND
MALAYSIA
Current Global Footprints
32
Detroit, USA
Durango, México Coimbatore/Erode, India
Rushan,
China
Porto,
Portugal
Thailand
Malaysia
Singapore
Kunshan,
China
London, UK
AAPICO Facilities
Sakthi Facilities
Other JV partners
Japan
Taiwan
Germany
New York,
USA
Shareholder portfolio and
generate return to shareholders
Improve profitability through
margin management
Finance Strategy
33
Portfolio diversification Cash flow management
Managing strong financial positions
4.9%5.9% 6.3%
2.3%3.8%
6.6%
2015 2016 9M17
Profitability TrendGP% NP%
0.97 1.70
2.47
0.30 0.66 0.60
30.9%38.9% 35.2%
2015 2016 9M17
Dividend PaymentEPS DPS % Payout
3.28 2.52 5.31
0.80 1.10
1.10
2015 2016 9M17
Debt ProfileBank Bond
Profita-bility
Liquidity
Equity
Maximize
shareholder
value
927 1,2
14
1,0
22
273
167
118
2015 2016 9M17
Cash flowCash from operations Capex
Core Pillars of AAPICO Business
34
Auto Part
Manufacture
Car
Dealerships
IOT
Connectivity
& Mobility
Business
Thailand Car Industry Outlook
35
0.5 0
.6
0.8
0.9
1.1 1.2 1
.3 1.4
1.0
1.6
1.5
2.5
2.5
1.9 1.9 1.9
1.5
1
-
0.5
1.0
1.5
2.0
2.5
3.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 ….
Production Forecast Domestic ExportUnit: Million
-0.3%
• The forecast of total car production has been revised to 1.95 million units, of which production for
domestic is forecasted at 830,000 units (43%) and for export at 1,100,000 units (57%).
Global
Financial
Crisis
Flood
First car
campaign
Source: The Federation of Thai Industry (Automotive Industry)
Sample orders for current & new models
36
0
100
200
300
400
500
Y02 Y03 Y04 Y05 Y06 Y07 Y08 Y09 Y10 Y11 Y12 Y13 Y14 Y15 Y16 Y17 Y18 Y19 Y20 Y21 Y22 Y23 Y24 Y25 Y26 Y27 Y28
Global
Financial
Crisis
FloodFirst car
campaign
Unit: ‘000
Previous model Current model New model
Basically AAPICO has stable sales volume with steady future growth.
Thailand and Global Car Industry
37
USA
16 Million
CHINA
30 Million
EUROPE
17 Million
OTHERS
20 Million
Thailand
2 Million
Disclaimer
38
The information contained in this material has been prepared by AAPICO Hitech PLC (“AH” or “AAPICO”) solely for information purpose and does
not constitute an offer or invitation to sell or the solicitation of an offer or invitation to purchase or subscribe for shares in AAPICO.
Some statements made in this material are forward-looking statements. These statements typically contain words such as “expects” and
“anticipates” and words of similar import. Any statement in these materials that are not a statement of historical fact is a forward-looking
statement that involves various risks and uncertainties. These include statements with respect to our corporate plans, strategies, and beliefs. These
statements are based on our management assumptions and beliefs in light of the information currently available to us. These assumptions involve
risks and uncertainties which may cause the actual results, performance, or achievements to be materially different from any future results,
performance, or achievements expressed or implied by such forward-looking statements.
None of the future projections, expectations, estimates or prospects in this presentation should be taken as forecasts or promises nor should they
be taken as implying any indication, assurance or guarantee that the assumptions on which such future projections, expectations, estimates or
prospects have been prepared are correct and exhaustive or, in the case of the assumptions, fully stated in the presentation. We assume no
obligations to update the forward-looking statements contained herein to reflect actual results, changes in assumptions or changes in factors
affecting these statements.
Accordingly, no representation or warranty, express or implied, is made or given by or on behalf of AAPICO or any of its shareholders, directors,
officers or employees or any other person as to the accuracy, completeness or fairness of the information or opinions contained in this
presentation. None of AAPICO nor any of its shareholders, directors, officers or employees accepts any liability (in negligence or otherwise)
whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith. Individual
situations and local practices and standards may vary, so viewers and others utilizing information contained within a presentation are free to adopt
differing standards and approaches as they see fit. Products and names mentioned in materials or presentations are the property of their
respective owners and the mention of them does not constitute an endorsement by AAPICO. The information contained in this presentation is
only current as of the date its date. In giving this presentation, neither AAPICO nor its respective advisers and/or agents undertake any obligation
to provide the recipient with access to any additional information or to update this presentation or any additional information or to correct any
inaccuracies in any such information which may become apparent. You must make your own assessment of the relevance, accuracy, and adequacy
of the information contained in this presentation and must make such independent investigation as you may consider necessary or appropriate
for such purpose. The presentation should not be construed as legal, tax, investment or other advise.
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