AAPICO HITECH PLC [AH] - SET · Q1 2016 Q4 2016 Q1 2017 YOY QOQ Total Industry Volume 181,560 212,263 210,491 +15.9% -0.8% Domestics sales grew 15.9% yoy, driven by new models and

AAPICO HITECH PLC [AH]

Agenda

2

1. Company Profile

2. Industry Overview

3. Financial Performance

4. Strategy and Direction

Company Profile

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 38 companies (29 subsidiaries and 9

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.

• Treasury share is 6,007,700 shares as of May.

Industry/Sector : Auto

Current price : Baht 20.10

52 weeks range : Baht 11.60 – 20.60

Market Cap : Baht 6,484 million

P/E (YTD) : 10.25*

P/BV : 1.01*

Dividend yield : 3.29%**

* Data as of May 25, 2017

** Dividend yield is calculated based on current share price

AH Shareholding Structure

5

Yeap

Family

39.8%

Sojitz

Corp.

15.8%

AH

1.9%

Free-

float

42.5%

AH’s main shareholders are Yeap Swee Chuan

and family holding 39.85% of total outstanding

shares and Sojitz Corporation holding

15.76% of total outstanding shares.

Thai

79.3%

Thai

institu-

tions

1.2%NVDR

14.9%

Foreign

institu-

tions

4.4%

Foreign

0.3%* Data as of March 16, 2017

AAPICO’s Vision

6

Where do we want to go?

How do we want people to remember us?

MANUFACTURING

RESEARCH & DEVELOPMENT

CAR RETAILING

LEAN, GREEN, HAPPY, DIGITAL

WORLD-CLASS CORPORATION

Happy Customers Happy Employees Happy PublicHappy Shareholders

• 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

Business Segment

7

• Stamping Parts

• Assemblies

Forging

Machining

Plastic

Navigation

Data Analytics

Telematics

Car Dealerships

• Jigs

• Dies

AAPICO

GROUP

Country of Operations

8

THAILAND Ayutthaya, Chonburi, Rayong, Samutprakarn

Production: Stamping and Assemblies, Forging & Machining,

Plastic, Jigs & Dies, Dealerships, and Car Navigation

MalaysiaKajang & Petaling Jaya

Car dealers: Honda car

2015

73%

2015

23%

2015

4%

2016

73%

2016

24%

2016

3%

1Q17

73%

1Q17

24%

1Q17

3%

Thailand Malaysia China

Sales by Country

CHINA Kunshan

Production:

Connecting rods and Copper

Forging

Locations in Thailand

9

Bangkok

Ayutthaya

Rayong

ChonburiSamutprakan

Hitech Industrial Estate

Products : Stamping Dies, Jigs, Stamping

parts, and Car navigation

Amata Nakorn Industrial Estate

Products : Chassis Frames, Forged

and machined parts.

Bangplee Industrial Estate

Products : Plastic parts

Amata City Industrial Estate

Products : Stamping parts and

Plastic partsMitsubishi Dealers:

Ramindra Navanakorn

Ford Dealers:

Ladprao Samutprakarn

Our OEM Customers

10

Isuzu; 43%

AAT

17%

Nissan; 9%

GKN; 3%AAM; 3%Toyota; 3%

Others-

Parts; 22% Isuzu

42%

AAT*

11%

Nissan

7%

GKN; 4%

FORD; 4%

AAM; 3%

Toyota

3%

Others-

Parts

26%

Top OEM Customer Profile

*Auto Alliance (Thailand) Co., Ltd – a JV between Ford and Mazda.

Our Partners

11

Technical PartnersJoint VenturesStrategic Shareholder

Thailand AutomotiveIndustry Update

13

0.38 0.34 0.32 0.30 0.31

0.26 0.27 0.27 0.31

0.22

0.30 0.30 0.31 0.27 0.25 0.27 0.28

0.33

0.270.26

0.22 0.21

0.17 0.18 0.190.21

0.18

0.19 0.18 0.19 0.21 0.22 0.19 0.20

0.0

0.2

0.4

0.6

0.8

1.0

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

1-Ton Pick-up/PPV Passenger car OthersUnit: Million

Q1 2016 Q4 2016 Q1 2017 YOY QOQ

Production Volume 506,874 467,681 485,555 -4.2% +3.8%

Thailand Production Volume

Source: The Federation of Thai Industry (Automotive Industry)

Total production volume in Q1’17 dropped 4.2% yoy, mainly in export sales.

Total Industry Volume

14

0.18 0.15

0.12 0.14

0.11 0.10 0.10 0.11

0.09 0.08

0.10

0.13 0.10 0.09 0.09

0.11 0.11

0.20

0.150.15 0.13

0.09 0.09 0.090.10

0.080.07

0.07

0.08

0.06 0.07 0.070.08 0.08

0.0

0.1

0.2

0.3

0.4

0.5


1-Ton Pick-up/PPV Passenger car Others


Unit: Million

Q1 2016 Q4 2016 Q1 2017 YOY QOQ

Total Industry Volume 181,560 212,263 210,491 +15.9% -0.8%

Domestics sales grew 15.9% yoy, driven by new models and motor show.

Demand pulled forward prior to

new excise tax implementation

15

0.29 0.25

0.31 0.28 0.29

0.27 0.28 0.29

0.33

0.25

0.33 0.30 0.31

0.29 0.31

0.29 0.28

0.0

0.1

0.2

0.3

0.4

0.5


Export Units


Unit: Million

Export Volume

Q1 2016 Q4 2016 Q1 2017 YOY QOQ

Export Volume 307,760 287,789 284,301 -7.6% -1.2%

Export volume dropped in most markets, except North America and Australia.

Financial PerformanceFor Jan-Mar 2017

Financial Highlights

• Revenues grew by 0.9%. Higher MY car sales were

partly offset by lower sales in Thailand.

• Gross profit margin improved to 7.7% of sales, driven

by improved efficiency and cost reduction.

• Interest and Tax expenses continually decreased due to

loan repayment.

• Share of profit increased yoy, largely attributable to

Hyundai and ASICO.

• Net profit continually increased to B228 million or at

5.8% of sales, hence improving ROE and ROA

respectively.

Q1 2017 ResultsIn Million BahtQ1

2015

Q1

2016

Q1

2017

Revenues

Growth%

3,758

+1.8%

3,910

+4.0%

3,946

+0.9%

Gross Profit

GM%

190

5.2%

268

7.0%

296

7.7%

SG&A 193 193 197

Associate 54 31 109

Int. & Tax 52 42 36

Net Profit

NP%

100

2.7%

156

4.0%

228

5.8%

ROE (%) 5.8% 6.6% 10.2%

ROA (%) 2.7% 3.3% 5.5%

D/E (x) 0.63 0.49 0.36

AAPICO Group : Total Revenues

18

3,758 3,574 3,6723,990 3,910

3,681 3,6193,929 3,946

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

Total Revenues by quarterUnit: in Million Baht

Auto parts Car dealers

2016Q1,

69%

2016Q1,

31%

2017Q1,

65%

2017Q1,

35%

Total Revenues (FY)

Auto parts Car dealers

Q1’17 vs Q1’16: Revenue grew 0.9% yoy. Higher car sales

in Malaysia were partly offset by lower sales in Thailand.

Q1’17 vs Q4’16: Revenue grew slightly by 0.4%, driven by

higher auto part sales, partly offset by lower car sales.

Q1’17 vs Q1’16: Revenue contribution from car dealership

increased from 31% to 35%, largely driven by higher car

sales in Malaysia. Auto parts sales contribution declined

yoy from 69% to 65% in Q1’17.

Auto Parts : Sales & EBIT

19

2,086

2,487 2,165

2,417 2,302 2,382 2,231

2,623 2,265 2,158 2,299

2,474

-

1,000

2,000

3,000

4,000

2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

Sales by quarterUnit: in Million Baht

2,623 2,474

139 198

3M16 3M17

Q1 Sales & EBITUnit: in Million Baht

-5.7%

Q1’17 vs. Q1’16:

Sales were 5.7% lower than last year, due to lower sales in Thailand, in line with

industry. China sales reported 3.2% growth yoy.

EBIT improved yoy, driven by improved efficiency and cost reduction. EBIT

margin improved from 5.3% to 8.0% of sales.

1Q16

95%

1Q16

5% 1Q17

TH

95%

1Q17

CN

5%

1,195 1,355

28 18

3M16 3M17

Q1 Sales & EBITUnit: in Million Baht

Car Dealers : Sales & EBIT

20

1,548 1,416

1,296 1,239 1,149 1,178

1,636

1,195 1,323 1,356

1,512 1,355

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

Sales by quarterUnit: in Million Baht

Q1’17 vs Q1’16:

Sales grew 13.4%, driven by strong car sales in Malaysia, partly offset by a

decline in Thailand.

Despite higher sales, EBIT decreased yoy, mainly due to sales decline in

Thailand. EBIT margin declined from 2.3% to 1.3% of sales.

1Q16

43%1Q16

57%

1Q17

TH

33%1Q17

MY

67%

+13.4%

EBITDA: Good improvement vs. LY

21

305 307

260285

248

313287

347321

286 272

321

-

100

200

300

400

500

2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

Unit: in Million Baht

EBIT Depreciation

347321

3M16 3M17

EBIT Depreciation

3.3% 3.2%

1.8%2.6%

1.8%

3.4%2.5%

4.3% 3.9%2.7% 2.4%

3.9%

7.9% 7.6% 7.2% 7.6%6.9%

8.5%7.2%

8.9% 8.7%7.9%

6.9%8.1%

0%

5%

10%

2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

Unit: as % of revenueEBIT% EBITDA%

4.3% 3.9%

8.9%8.1%

3M16 3M17

EBIT% EBITDA%

Net Profit: Significant improvement

22

10792

33

100

40

112

85

156

133 132149

228

-

50

100

150

200

250

2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

Unit: in Million Baht

Profit from operations Associate income

156

228

3M16 3M17

Operations Associate

2.8%2.3%

0.9%

2.7%

1.1%

3.1%2.1%

4.0% 3.6% 3.7% 3.8%

5.8%

0%

2%

4%

6%

8%

2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

Unit: as % of revenueNet Profit %

4.0%

5.8%

3M16 3M17

Net Profit %

Profitability continually increased

23

20.7% 20.0%

12.2%9.4%

7.7% 6.6% 6.9% 5.8% 4.6% 4.9% 5.8% 6.6%8.1% 8.4% 9.3% 10.2%

0%

5%

10%

15%

20%

25%

2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

Unit: in percentage

ROE (In the Quarter) ROE (Seasonally adjusted)

R

O

E

R

O

A

7.4% 7.3%

4.8%3.8%

3.2% 2.9% 3.1% 2.7%2.2% 2.4% 2.9% 3.3%

4.1% 4.4%5.0%

5.5%

0%

2%

4%

6%

8%

10%


Unit: in percentage

ROA (In the Quarter) ROA (Seasonally adjusted)

Ability to service debt also improved

24

4.8 4.73.6 3.2 2.9 2.9 3.0 2.8 2.5 2.7 3.1 3.6

4.5 4.85.6

6.4

0.0

2.0

4.0

6.0

8.0

10.0


Unit: times Interest Coverage Ratio (In the Quarter)

Interest Coverage Ratio (Seasonally adjusted)

I

C

R

De

bt

/ E

BIT

DA

2.8 3.0 3.3 3.5 3.8 3.6 3.5 3.4 3.6 3.2 3.1 2.8 2.6 2.5 2.4 2.2

0.0

2.0

4.0

6.0

8.0


Unit: times Debt to EBITDA (In the Quarter)

Debt to EBITDA (Seasonally adjusted)

Net gearing in line with target

25

Net interest-bearing debt to equity ratio as of Mar 2017 was at 0.36x, in

line with the Company’s target of less than 1.00x.

Total liabilities net cash (Net debt) to equity ratio decreased to 0.71x as

end of Mar 2017, in compliance with financial covenant target of less than

2.00x.

ST

14%

CPLTD

22%

LT Loans

17%

Bond

47%

Interest-bearing Debt

Interest-bearing debts

decreased to Baht 2.3 billion

as of Mar 2017.

Debenture accounts for 47% of

debt portfolio.

1.07

0.85

0.670.55 0.49 0.51 0.46 0.40 0.36

1.74

1.26

1.07

0.87 0.88 0.860.79 0.74 0.71

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

0.0

2.0

4.0

6.0

8.0

2012 2013 2014 2015 1Q16 2Q16 3Q16 4Q16 1Q17

Unit: in Billion Baht Debts Equity D/E (L-C)/E

Strategy & Direction

Finance Strategy

27

Profita-

bility

Liquidity

Equity

Maximize

shareholder

value

Shareholder portfolio and

generate return to

shareholders

Portfolio diversification Cash flow management

Improve profitability

through margin

management

Global Plan Business Strategy

28

CHINAINDIA

EUROPE

USA JAPAN

THAILAND

MALAYSIA

Core Pillars of AAPICO Business

29

Auto Part

ManufactureCar Dealerships

IOT

Connectivity

& Mobility

Business

AH – SAKTHI JV AGREEMENT

Basic Structure of Deal

Strictly Private & Confidential31

AAPICO invests US$100 million in Sakthi Global Auto Holdings Limited (UK) (“SGAH”) for a 25.1

percent equity based on a EBITDA multiple valuation over the 2 years earnings in Y2018 and Y2019.

• US$50 million to be injected into capital and;

• US$50 million to be injected as a convertible loan.

SGAH needs to pay interest of US$10 million/year for 3 years to AAPICO.

Within 3 years, SGAH needs to invest US$50 million into AAPICO’s Chassis and Forging operations.

This is a project deal to bring synergy to two companies in terms of technology, customers, products,

and global markets.

There is minimum risk to this investment as we have personal guarantee of Sakthi’s two major

shareholders and a pledge of 51 percent US company shares.

SGAH Holding Structure


SACL

India

SAGUSA

USA

WBS

China

100%

49%

74.9% 24.1%

SSL

India

76%24%

SGAH

UK

1.0%

SAAPL

India

SP

Portugal

SP21

Portugal

100%

100%

AH

Thailand

ABT Investment Ltd

UK

Aapico Investment

Singapore

52%

Company Names and Abbreviations

SSL - Sakthi Sugars Limited

SGAH - Sakthi Global Automotive Holdings

SACL - Sakthi Auto Component Limited

SAGUSA - Sakthi Automotive Group USA

SAAPL - Sakthi Auto Ancillary Private Limited

WBS - Weihei Bethel Sakthi

SP - Sakthi Portugal S.A.

SP 21 - SP 21 S.A. * Simplified holding structure for main operating companies.

Rationale for Investment


1. Good strategic fit of two strong Asian Automotive Group – A unique opportunity that can be a start of a long-term

mutually beneficial relationship for AAPICO and Sakthi.

2. Sustainable and Global – This JV investment by AAPICO will ensure the long term sustainability of the company,

allowing it to play in the 100 million annual volume global car industry, rather than just a regional player.

3. Product enlargement – AAPICO will move beyond current product portfolios (stamping parts, plastic parts and

assemblies) into other critical safety components, such as steering knuckles and brake components.

4. Technical know-how – AAPICO can accelerate its R&D growth by moving to the US where highly skilled professionals are

readily available.

5. Synergy – Both AAPICO and Sakthi have specific strengths in the same and different OEMs. The combined strengths

would build greater confidence in most OEMs.

6. Cost effectiveness – Scale of operations would bring cost benefits by sharing of material purchase and manpower

reduction, thereby improving profits.

7. Returns – It would give better returns in terms of ROIC and ROE to AAPICO and SGAH.

Disclaimer

34

Some statements made in this material are forward-looking statements with the relevant assumptions, which are subjected to

various risks and uncertainties. These include statements with respect to our corporate plans, strategies, and beliefs and other

statements that are not historical facts. These statements can be identified by the use of forward-looking terminology such as

“may”, “will”, “expect”, “anticipate”, “intend”, “estimate”, “continue”, “plan” or other similar words.

The statements are based on our management’s 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. Please note that the company and executives/staffs do not control and cannot guarantee the relevance,

timeliness, or accuracy of these statements.

AAPICO HITECH PLC

[email protected]

Tel: 66 (0) 2613-1504

Documents

AAPICO HITECH PLC [AH] - SET · Q1 2016 Q4 2016 Q1 2017 YOY QOQ Total Industry Volume 181,560 212,263 210,491 +15.9% -0.8% Domestics sales grew 15.9% yoy, driven by new models and