AAPICO HITECH PLC [AH] Agenda 1. Company Profile 2. Industry - - PowerPoint PPT Presentation

AAPICO HITECH PLC [AH]

Agenda

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1. Company Profile 2. Industry Overview 3. Financial Performance 4. Strategy and Direction

Company Profile

AAPICO HITECH PLC [AH]

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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.

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

Industry/Sector : Auto Current price : Baht 24.60* 52 weeks range : Baht 12.00 – 27.25 Market Cap : Baht 7,936 million P/E (YTD) : 9.58* P/BV : 1.19* Dividend yield : 2.69%**

* Data as of August 25, 2017 ** Dividend yield is calculated based on current share price

AH Shareholding Structure

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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

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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 Public Happy Shareholders

• S : Safety
• Q : Quality
• C : Cost
• D : Delivery
• E : Engineering
• M : Management (Focus

Digital)

• Teamwork
• Look at problems as
• pportunities
• Love Family, Company and

Country

• Loyalty and Honesty
• Mutual Respect
• Profitability
• Reasonable Dividend
• Corporate Social

Responsibility

Business Segment

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• Stamping Parts
• Assemblies

Forging Machining Plastic Navigation Data Analytics Telematics Car Dealerships

• Jigs
• Dies

AAPICO GROUP

Country of Operations

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THAILAND

Ayutthaya, Chonburi, Rayong, Samutprakarn

Production: Stamping and Assemblies, Forging & Machining, Plastic, Jigs & Dies, Dealerships, and Car Navigation

Malaysia

Kajang & Petaling Jaya

Car dealers: Honda car

2015 73% 2015 23% 2015 4% 2016 73% 2016 24% 2016 3%

6M17 72% 6M17 24% 6M17 4%

Thailand Malaysia China

Sales by Country

CHINA

Kunshan

Production: Connecting rods and Copper Forging

Locations in Thailand

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Bangkok Ayutthaya Rayong Chonburi Samutprakan 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 parts Mitsubishi Dealers: Ramindra Navanakorn Ford Dealers: Ladprao Samutprakarn

Our OEM Customers

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Isuzu; 43% AAT 17% Nissan; 8% GKN; 4%

FORD; 1% AAM; 4% Toyota; 3%

Others-Parts; 20%

Isuzu 41% [CATEGORY NAME]* [PERCENTA GE] Nissan 6%

GKN; 4% FORD; 4%

AAM; 4% Toyota 3% Others-Parts 22%

Top OEM Customer Profile

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

Our Partners

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Technical Partners

Joint Ventures

Strategic Partner

Sakthi Auto Holdings Limited (SGAH)

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Structure of the deal On June 8, 2017, AAPICO invested US$100 million in Sakthi Auto Holdings Limited (SGAH) of which:

• US$50 million is recorded as equity investment.
• US$50 million is loan to SGAH.

Sakthi Global Auto Holdings Limited (SGAH) (UK) ABT Auto Investments Limited AAPICO Hitech PLC AAPICO Investment Pte. Ltd. (Singapore)

74.9% 24.1% 100% 1.0%

Sakthi Auto Product Range

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Sakthi Auto : Manufacturing

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Detroit, USA Current: CNC Machining 2016: Aluminum Foundry 2016 Revenue: US$80 Million Durango, México 2017: Aluminum Foundry 2017: CNC Machining TBD: Iron Foundry Latin America TBD: CNC Machining Coimbatore/Erode, India Current: Iron Foundry Current: CNC Machining 2016 Revenue: US$156 Million Rushan, China Current: Iron Foundry Current: Aluminum Foundry Current: CNC Machining 2016 Revenue: US$46 Million Porto, Portugal Current: Iron Foundry 2017: Aluminum Foundry 2017: CNC Machining

Thailand Automotive Industry Update

16 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 0.26 0.33 0.27 0.26 0.22 0.21 0.17 0.18 0.19 0.21 0.18 0.19 0.18 0.19 0.21 0.22 0.19 0.20 0.19

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 2Q17

1-Ton Pick-up/PPV Passenger car Others

Unit: Million

Q2 2016 Q1 2017 Q2 2017 YOY QOQ Production Volume 486,506 485,555 465,411

• 4.3%
• 4.1%

Thailand Production Volume

Source: The Federation of Thai Industry (Automotive Industry)

Total production volume in Q2’17 dropped 4.3% yoy, mainly export sales.

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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 0.25 0.0 0.1 0.2 0.3 0.4 0.5 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17

Export Units

Source: The Federation of Thai Industry (Automotive Industry) Unit: Million

Export Volume

Q2 2016 Q1 2017 Q2 2017 YOY QOQ Export Volume 287,063 284,301 252,105

• 12.2%
• 11.3%

Export volume declined in all markets.

Domestic Sales Volume

18 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 0.09 0.20 0.15 0.15 0.13 0.09 0.09 0.09 0.10 0.08 0.07 0.07 0.08 0.06 0.07 0.07 0.08 0.08 0.08

0.0 0.1 0.2 0.3 0.4 0.5 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17

1-Ton Pick-up/PPV Passenger car Others

Source: The Federation of Thai Industry (Automotive Industry) Unit: Million

Q2 2016 Q1 2017 Q2 2017 YOY QOQ Total Industry Volume 187,070 210,491 199,490 +6.6%

• 5.2%

Domestics sales grew 6.6% yoy, driven by recovering economy, new models and motor show.

Demand pulled forward prior to new excise tax implementation

Financial Performance

For the 2nd quarter of 2017

Financial Highlights

• Revenues grew by 6.0%, driven by one-time gains, SGAH

interest, and higher sales in Malaysia and China.

• Gross profit margin slightly down, due to impact of lower

margins in car dealers.

• SG&A included one-time SGAH expenses.
• Interest and Tax expenses continually decreased due to loan

repayment.

• Share of profit increased yoy, largely attributable to Hyundai

and ASICO.

• Net profit improved to B323 million or at 9.3% of sales, hence

improving ROE and ROA respectively.

Q2 2017 Results

In Million Baht

Q2

2015

Q2

2016

Q2

2017 Revenues

Growth%

3,574

• 7.6%

3,681

+3.0%

3,903

+6.0%

Gross Profit

GM%

121

3.5%

237

6.6%

228

6.3%

SG&A 179 186 211 Associate 25 31 68

• Int. & Tax

50 42 36 Net Profit

NP%

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1.1%

133

3.6%

323

8.3%

ROE (%) 4.6% 8.1% 12.9% ROA (%) 2.2% 4.1% 6.3% D/E (x) 0.61 0.51 0.81

AAPICO Group : Total Revenues

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3,574 3,672 3,990 3,910 3,681 3,619 3,929 3,946 3,903

• 500

1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17

Total Revenues by quarter

Unit: in Million Baht

Auto parts Car dealers

6M2016, 66% 6M2016, 34%

6M2017, 65% 6M2017, 35%

Total Revenues

(Jan-Jun)

Auto parts Car dealers

• Q2’17 vs Q2’16: Revenue grew 6.0% yoy, driven by B147 million gain on

disposal of QI, SGAH interest, and higher sales in Malaysia and China.

• Q2’17 vs Q1’17: Revenue declined slightly by 0.6%. Lower cyclical sales

in Thailand were partly offset by gains from disposal and SGAH.

• Jan-Jun 2017 vs. Jan-Jun 2016: Revenue grew by 3.4%

yoy, driven by gains from disposal and SGAH interest, as well as good car sales in Malaysia and higher auto sales in China.

Auto Parts : Sales & EBIT

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2,487 2,165 2,417 2,302 2,382 2,231 2,623 2,265 2,158 2,299 2,474 2,288

• 1,000

2,000 3,000 4,000 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17

Sales by quarter

Unit: in Million Baht

4,888 4,762 253 324

6M16 6M17

Q1 Sales & EBIT

Unit: in Million Baht

• 2.6%
• Jan-Jun 2017 vs. Jan-Jun 2016:
• Sales were 2.6% lower than last year, mainly due to lower sales in Thailand, in line with

industry trend. This was partly offset by higher sales in China, which grew 23% yoy.

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

improved from 5.2% to 6.8% of sales.

6M16 95% 6M16 5%

6M17 TH 94% 6M17 CN 6%

2,518 2,695 57 36

6M16 6M17

Q1 Sales & EBIT

Unit: in Million Baht

Car Dealers : Sales & EBIT

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1,416 1,296 1,239 1,149 1,178 1,636 1,195 1,323 1,356 1,512 1,355 1,340

• 200

400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17

Sales by quarter

Unit: in Million Baht

• Jan-Jun 2017 vs. Jan-Jun 2016:
• Sales grew 7.0% yoy, driven by strong car sales in Malaysia, partly offset by a decline in

Thailand.

• Despite higher sales, EBIT decreased yoy, mainly due to lower gross margin and lower sales

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

6M16 39% 6M16 61%

6M17 TH 34% 6M17 MY 66%

+7.0%

EBITDA: Good improvement vs. LY

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307 260 285 248 313 287 347 321 286 272 321 451

• 100

200 300 400 500 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Unit: in Million Baht EBIT Depreciation

668 772 6M16 6M17

EBIT Depreciation

3.2% 1.8% 2.6% 1.8% 3.4% 2.5% 4.3% 3.9% 2.7% 2.4% 3.9% 7.5%

7.6% 7.2% 7.6% 6.9% 8.5% 7.2% 8.9% 8.7% 7.9% 6.9% 8.1% 11.6% 0% 5% 10% 15% 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Unit: as % of revenue EBIT% EBITDA%

4.1% 5.7%

8.8% 9.8%

6M16 6M17

EBIT% EBITDA%

Net Profit: Significant improvement

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92 33 100 40 112 85 156 133 132 149 228 323

• 50

100 150 200 250 300 350 400 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Unit: in Million Baht Profit from operations Associate income

289 551 6M16 6M17

Operations Associate 2.3% 0.9% 2.7% 1.1% 3.1% 2.1% 4.0% 3.6% 3.7% 3.8% 5.8% 8.3% 0% 5% 10% 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Unit: as % of revenue Net Profit % 3.8% 7.0%

6M16 6M17

Net Profit %

Profitability continually increased

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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% 12.9% 0% 5% 10% 15% 20% 25% 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Unit: in percentage ROE (In the Quarter) ROE (Seasonally adjusted)

R O E R O A

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% 6.3% 0% 2% 4% 6% 8% 10% 12% 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Unit: in percentage ROA (In the Quarter) ROA (Seasonally adjusted)

Ability to service debt improved

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4.7 3.6 3.2 2.9 2.9 3.0 2.8 2.5 2.7 3.1 3.6 4.5 4.8 5.6 6.4 8.1 0.0 2.0 4.0 6.0 8.0 10.0 12.0 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Unit: times Interest Coverage Ratio (In the Quarter) Interest Coverage Ratio (Seasonally adjusted)

I C R Debt / EBITDA

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 3.2 0.0 2.0 4.0 6.0 8.0 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Unit: times Debt to EBITDA (In the Quarter) Debt to EBITDA (Seasonally adjusted)

Net gearing in line with target

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• Net interest-bearing debt to equity ratio as of Jun 2017 increased to 0.81x, due to

increased funding for SGAH, but still in line with the Company’s target of less than 1.00x.

• Total liabilities net cash (Net debt) to equity ratio increased to 1.12x as end of Jun 2017,

but was still below the financial covenant target of less than 2.00x.

ST 66% CPLTD 22% LT Loans 6% Bond 6%

Interest-bearing Debt

Interest-bearing debts increased by Baht 3.1 billion to Baht 5.4 billion as of Jun 2017, mainly related to funding for SGAH investment.

1.07 0.85 0.67 0.55 0.49 0.51 0.46 0.40 0.36 0.81

1.74 1.26 1.07 0.87 0.88 0.86 0.79 0.74 0.71 1.12

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 2Q17

Unit: in Billion Baht

Debts Equity D/E (L-C)/E

AH Share Price since Jan 1, 2017

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16.10 18.80

21.80

25.75 12.00 14.00 16.00 18.00 20.00 22.00 24.00 26.00 28.00 30.00 1/4/2017 2/4/2017 3/4/2017 4/4/2017 5/4/2017 6/4/2017 7/4/2017 8/4/2017

FY2016 Results Announcement Q1 2017 Results Announcement AAPICO-Sakthi JV Announcement

+52.5%

AH Share price (in Baht)

Q2 2017 Results Announcement

Strategy & Direction

Finance Strategy

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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

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CHINA INDIA EUROPE USA JAPAN

THAILAND MALAYSIA

Core Pillars of AAPICO Business

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Auto Part Manufacture Car Dealerships IOT Connectivity & Mobility Business

Disclaimer

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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 ir@aapico.com Tel: 66 (0) 2613-1504