AAPICO HITECH PLC [AH] Presentation for 3Q 2019 financial - - PowerPoint PPT Presentation

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AAPICO HITECH PLC [AH] Presentation for 3Q 2019 financial - - PowerPoint PPT Presentation

AAPICO HITECH PLC [AH] Presentation for 3Q 2019 financial statements Disclaimer The information contained in this material has been prepared by AAPICO Hitech PLC (AH or AAPICO) solely for information purpose and does not constitute


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AAPICO HITECH PLC [AH]

Presentation for 3Q 2019 financial statements

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SLIDE 2

Disclaimer

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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

  • bligations 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,

  • fficers 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

  • nly 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

  • f 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. ir@aapico.com | +66-(0)-2613-1504

AAPICO HITECH PUBLIC COMPANY LIMITED

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Agenda

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1. Company Information 2. Automotive Industry Updates 3. Financial Performance 4. Strategy & Direction

AAPICO HITECH PUBLIC COMPANY LIMITED

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SLIDE 4

AAPICO Hitech PLC

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SLIDE 5

Company Overview

AAPICO HITECH PUBLIC COMPANY LIMITED

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AAPICO HITECH PUBLIC COMPANY LIMITED

  • A leading OEM automotive parts manufacturer in

Thailand with global operations.

  • Core businesses: OEM Auto Parts, Jigs and Dies, Car

Dealerships and IoT Connectivity & Mobility.

  • Registered capital of Baht 322.65 million and paid-

up capital of Baht 322.58 million, comprising of 322,583,844 ordinary shares at par value of Baht 1 each.

  • Major shareholders are Yeap Swee Chuan and

Family holding 39.32% of total capital.

Index : SET / THSI Industry/Sector : Auto Current price : Baht 14.50* Market Cap : Baht 4,677 million* P/E (YTD) : 4.90* P/BV : 0.59* Dividend yield : 6.50% TRIS / CG Rating : BBB+ /

* Data as of November 14, 2019 ** Dividend yield is calculated based on current share price

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SLIDE 6

AAPICO’s Vision

AAPICO HITECH PUBLIC COMPANY LIMITED

6

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
  • pportunities
  • Love Family, Company

and Country

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

Responsibility

Happy Employees Happy Shareholders Happy Public Happy Customers AAPICO Key Fundamental Values

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Core Pillars of AAPICO Business

AAPICO HITECH PUBLIC COMPANY LIMITED

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Auto Part Manufacture Car Dealerships IoT Connectivity & Mobility

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Business Segments

AAPICO HITECH PUBLIC COMPANY LIMITED

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Manufacture of Auto Parts

(Thailand & China)

Car Dealerships

(Thailand & Malaysia)

IoT Connectivity

(Thailand) ~69% of Sale ~30% of Sale <1% of Sale

Thailand Malaysia

Stamping & Assemblies Forging & Machining Plastic Jigs and Dies

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Countries of Operations

AAPICO HITECH PUBLIC COMPANY LIMITED

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Thailand 77% Malaysia 20% China 3%

9M 2019

Sales by Country

CHINA

Kunshan Production: Connecting rods and Copper Forging

MALAYSIA

Car dealers: Honda car Proton

THAILAND

Ayutthaya, Chonburi, Rayong, Samutprakarn

Hitech Industrial Estate

Production: Stamping parts and Stamping Dies & Jigs

Amata City Industrial Estate Chonburi

Production: Stamping & Chassis Frames and Forging & Machining Parts

Bangpli Industrial Estate

Production: Plastic Parts

Amata City Industrial Estate Rayong

Production: Stamping Parts Plastic Washers & Fuel Tanks

Mitsubishi Dealers

Navanakorn & Ramindra

Ford Dealers

Samutprakarn & Ladprao

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SLIDE 10

Major OEM Customers

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Isuzu 30%

Vinfast 18% AAT** 10%

Nissan 5% AAM 4% FORD 3% DANA 3% TOYOTA 2%

Others- Parts 25%

9M 2019 Top OEM Customer Profile

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

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Our Partners

AAPICO HITECH PUBLIC COMPANY LIMITED

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Joint Venture

Strategic Partner Technical Partner

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Automotive Industry Updates

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918 918 656 624

1,604 1,573 9M18 9M19

Thailand Car Production Volume

AAPICO HITECH PUBLIC COMPANY LIMITED

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295 313 332 328 294 296 212 224 221 223 202 200

517 548 564 561 504 507

  • 100

200 300 400 500 600 700

2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 Pick-Up/PPV Passenger Others Domestic Sales Export Sales

Total Car Production by Quarter

Jan-Sep Car Production

‘000 Units

  • 2.0%

yoy

Source: The Federation of Thai Industry (Automotive Industry)

  • 7.5%

yoy

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Thailand Export Volume

AAPICO HITECH PUBLIC COMPANY LIMITED

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Export Volume by Quarter

Jan-Sep Export Volume

859 821 9M18 9M19

  • 4.4%

yoy 267 297 282 300 260 261

  • 100

200 300 400

2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 Export Volume

‘000 Units

Source: The Federation of Thai Industry (Automotive Industry)

  • 12.0%

yoy

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361 370 291 306 95 87

747 762 9M18 9M19

Thailand Domestic Car Sales Volume

AAPICO HITECH PUBLIC COMPANY LIMITED

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Domestic Car Sales by Quarter

Jan-Sep Domestic Sales

119 123 151 133 126 111 100 101 109 103 104 99 33 34 35 28 31 28

252 257 295 264 260 238

  • 100

200 300 400

2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 1-Ton Pick-Up/PPV Passenger cars Other vehicles

‘000 Units

+2.0% yoy

Source: The Federation of Thai Industry (Automotive Industry)

  • 7.5%

yoy

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Thailand Total Industry Volume Jan-Sep

16

Source: Toyota

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SLIDE 17

Malaysia Total Industry Volume Jan-Sep

17

Source: MAA

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Financial Performance

3Q 2019

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Financial Highlights

AAPICO HITECH PUBLIC COMPANY LIMITED

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  • Revenue increased due to higher sales from the automotive

parts segment and gain on changes in interests in investments in associate and joint venture. Interest income on the other hand has decreased due to the fact that the company has stopped recognizing interest income on the loan to SGAH, since Q2 2019 for conservative reasons.

  • Gross profit increased due to improved efficiency and cost

reduction and profit from tooling sales.

  • SG&A increased due to professional fee and unrealized loss
  • n F/X .
  • Profit sharing from associates and JV decreased due to lower

profit sharing from HMTH and higher loss sharing from SGAH.

  • Interest and Tax expenses increased due to the completion of

BOI tax incentive scheme of some subsidiaries of the group and increase of loan level.

  • Net Profit decreased mainly due to higher loss sharing from

SGAH.

3Q 2019 Key Financials

Q3 Q3 2018 2019 Total Revenue 4,416 4,603

Sales and service income 4,179 4,318 Gains on changes in interests in investments in associate and joint venture

  • 151

Other Income 151 134 Interest Income 86

  • Gross Profit

283 383

Gross Profit (%) 6.8% 8.9%

SG&A 216 255

EBIT 305 413

Share of Profit 62 (92)

Interest Expenses (44) (72) Income Tax Expenses (0.1) (44)

Net Profit 302 204

NP Margin (%) 6.8% 4.4%

D/E (x) 0.62 0.77 P&L

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4,283 4,416 4,576 4,479 4,759 4,603 3,000 3,500 4,000 4,500 5,000 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19

Sale Interest Income

  • ne-time gains

Other Income

AH Group : Revenue

AAPICO HITECH PUBLIC COMPANY LIMITED

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THB million

13,161 13,840 9M 2018 9M 2019

Jan – Sep Revenue Revenue by quarter

Auto Parts 66% Car Dealerships 29% IOT Connectivity 0% Other

5%

9M 2019

  • 3Q 2019 Revenue grew 4.2% YOY, primarily driven by higher

sales from the automotive parts segment in Thailand and tooling sales from overseas customers and gains on changes in interests in investments in associate and joint venture.

  • On the other hand, interest income has decreased by stopped

recognizing interest income on the loan to SGAH for conservative reasons.

+5.2% yoy

+4.2%

yoy

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AH Group : Gross Profit

AAPICO HITECH PUBLIC COMPANY LIMITED

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THB million 260

284 423 375 356 383 6.5% 6.8% 9.9% 8.9% 7.7% 8.9% 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19

  • 50

100 150 200 250 300 350 400 450 852 1,114 6.8% 8.5% 9M 2018 9M 2019

Jan – Sep Revenue Gross Profit by quarter

  • 3Q 2019 Gross Profit increased 34.9% YOY in terms of amount and Gross Profit Margin grew to

8.9%, attributable to higher sale from automotive parts, improved efficiency and increases of gross profit from tooling sales.

+30.7% yoy

+34.9%

yoy

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  • 3Q 2019 sales grew by 15.8% YOY, driven by growth in automotive parts

segments in Thailand and tooling sales from overseas customers.

  • EBIT margin increased mainly attributable to higher sale from automotive

parts, improved efficiency and increases of gross profit from tooling sales.

AAPICO HITECH PUBLIC COMPANY LIMITED

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2,473 2,582 2,901 2,995 3,128 2,991

9.6% 7.3% 10.9% 9.2% 5.1% 8.5%

  • 1,000

2,000 3,000 4,000 5,000 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19

Thailand China EBIT%

THB million 7,740 9,114

8.2% 7.6%

9M 2018 9M 2019

Jan – Sep Sales & EBIT Sales and EBIT by quarter

Isuzu 30% Vinfast 18%

AAT 10% Nissan 5% AAM; 4% FORD; 3% DANA; 3% TOYOTA 2% Others- Parts 25%

9M 2019

+17.8% yoy

Auto Parts

+15.8%

yoy

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Car Dealers

AAPICO HITECH PUBLIC COMPANY LIMITED

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1,528 1,587 1,388 1,233 1,484 1,321 1.5% 1.5% 1.5% 1.5% 0.3% 0.8%

  • 1,000

2,000 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 Thailand Malaysia EBIT% 4,693 4,038 1.4% 0.8% 9M 2018 9M 2019

Ford 11% Mitsubishi 24% Honda 61% Proton 4%

9M 2019

THB million

Jan – Sep Sales & EBIT Sales and EBIT by quarter

  • 14.0%

yoy

  • 3Q 2019 Sales declined by 16.8% year on year, due to a

decrease in Honda’s sale volume in Malaysia. EBIT margin dropped YoY from 1.5% to 0.8% of sales.

  • 16.8%

yoy

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AH Group : EBIT & EBITDA Margin

AAPICO HITECH PUBLIC COMPANY LIMITED

24 451 339 396 461 512 468 560 517 301 564

  • 200

400 600 800 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 EBIT Depreciation 1,441 1,383 9M 2018 9M 2019 7.5% 4.3% 5.5% 6.7% 8.0% 6.9% 10.0% 8.2% 3.4% 9.0% 11.6% 7.9% 8.8% 10.3% 11.9% 10.6% 12.2% 11.5% 6.3% 12.3% 0% 5% 10% 15% 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19

Unit: as % of revenue

EBIT% EBITDA% 7.2% 6.8% 10.9% 10.0%

9M 2018 9M 2019 EBIT% EBITDA% THB million

  • 4.0%

yoy *Excluded Share of profit (loss) from investments in associates and JV

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AH Group : Net Profit

25 305 302 295 216 140 204

(200) (100)

  • 100

200 300 400 500 600 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 THB Million

Profit to equity holders from operations Associate income 1,004 561

9M 2018 9M 2019

Operations Associate 7.1% 6.8% 6.4% 4.8% 2.9% 4.4%

0% 5% 10% 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 Unit: as % of revenue

Net Profit % 7.6% 4.1%

9M 2018 9M 2019

Net Profit %

  • 44.1%

yoy

AAPICO HITECH PUBLIC COMPANY LIMITED

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AH Group : Financial Indicator

26 18.9% 19.8% 17.7% 14.4% 12.4% 11.0%

0% 10% 20% 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19

Return on Equity (ROE)

ROE (In the Quarter) ROE (Seasonally adjusted)

9.0% 9.2% 8.2% 6.8% 5.7% 5.0%

0% 5% 10% 15% 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19

Return on Asset (ROA)

ROA (In the Quarter) ROA (Seasonally adjusted)

8.5 8.8 7.7 6.5 5.4 4.6

0.0 4.0 8.0 12.0 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19

Interest Coverage Ratio (ICR)

ICR (In the Quarter) ICR (Seasonally adjusted)

2.9 2.7 2.8 2.7 3.0 2.9

0.0 2.0 4.0 6.0 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19

Debt to EBITDA

Debt/EBITDA (In the Quarter) Debt/EBITDA (Seasonally adjusted) AAPICO HITECH PUBLIC COMPANY LIMITED

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AH Group : Net gearing

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  • Net interest-bearing debt to equity ratio as of September 2019 was

0.77x, compared to 0.62x as of September 2018, and was within the Company’s target of less than 1.00x.

  • Total liabilities net cash (Net debt) to equity ratio as end of September

2019 was 1.15x, which was still within the financial covenant target of less than 2.00x.

ST Loan 5% CPLTD 19% LT Loan 37% LT Bond 39%

Interest-bearing Debt

Interest-bearing debts as

  • f September 2019 was

THB 6.4 Billion, mainly used for investment and new project.

0.40 0.69 0.60 0.56 0.62 0.80 0.80 0.83 0.77 0.74 0.99 0.92 0.91 1.01 1.18 1.21 1.22 1.15

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 0.0 2.0 4.0 6.0 8.0 10.0 2016 2017 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 Unit: in THB Billion

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

AAPICO HITECH PUBLIC COMPANY LIMITED

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SLIDE 28

Strategy & Direction

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SLIDE 29

Thailand Automotive Outlook in 2019

AAPICO HITECH PUBLIC COMPANY LIMITED

29 0.46 0.58 0.75 0.93 1.13 1.19 1.29 1.39 1.00 1.65 1.46 2.45 2.46 1.88 1.91 1.94 1.99 2.17 2.00

  • 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 2018 2019 …. Production Forecast Domestic Export

Unit: Million

Global Financial Crisis Flood First car campaign

Source: The Federation of Thai Industry (Automotive Industry)

Thailand automotive industry expects production volume to be at 2 million cars, of which 1 million cars to be sold locally and 1 million cars for export.

  • 7.8%
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Sample of automotive parts sales orders for current and new models

AAPICO HITECH PUBLIC COMPANY LIMITED

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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 Flood First car campaign

Unit: in thousand Previous model Current model New model

Stable sales volume with steady growth

28 August 2019

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Continued orders going forward

AAPICO HITECH PUBLIC COMPANY LIMITED

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Confirmed orders – 5 years for cars and 10-12 years for pick-up truck

ISUZU

D-Max Mu-X

Nissan

Navara Terra

TOYOTA

Hilux Revo Fortuner

FORD

Ranger Rapter Everest

Mitsubishi

Triton Pajero Sport

Honda

City Brio HRV BRV

Toyota

HRV Camry Altis Vios Yaris

Mazda

Mazda 2 CX3 BT-50 PRO

Nissan

Teana Almera Syphy Note March

FORD

Fiesta Focus Eco Sport

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Indonesia #16 Thailand #11 France #10 Spain #9 Brazil #8 S.Korea #7 Mexico #6 Germany #5 India #4 Japan #3 USA #2 China #1 Unit : Millions 2018 2017

Global Business Opportunities

AAPICO HITECH PUBLIC COMPANY LIMITED

32 China 29% Japan 10% India 6%

Thailand 2%

Rest of Asia 8%

Europe 22% America 22% Africa 1%

2018

Source: OICA

Top 10 Motor Vehicle Production Country in 2018

2018 Global Production Volume was 96 million units Major OEM Brands in Thailand Thailand Volume 2 Million

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Business Strategy

AAPICO HITECH PUBLIC COMPANY LIMITED

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CHINA INDIA EUROPE USA JAPAN THAILAND MALAYSIA

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Key Milestones

AAPICO HITECH PUBLIC COMPANY LIMITED

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Taking steps toward globalization

2017-2018

  • Established

strategic global partnership with Sakthi Group and invested US$100 million for 25.1% stake in Sakthi Global Auto Holding Limited (SGAH).

  • Increased equity

holding in SGAH from 25.10% to 49.99% with total investment of US$65 million

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
  • pportunity in the

start-up business.

  • Established AAPICO

Training Center.

  • Issued bond with a

BBB+ credit rating.

  • Achieved 4-star CG

rating.

2019

  • Established

Proton Dealership in Malaysia (49%)

  • Appropriated

50.01% shares of

  • SGAH. The

Company now holds 100% of SGAH shares

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Global Footprints

AAPICO HITECH PUBLIC COMPANY LIMITED

35 Detroit, USA Durango, México Coimbatore/Erode, India Rushan, China Porto, Portugal Thailand Malaysia Singapore Kunshan, China London, UK AAPICO Facilities Other JV partners

Japan Taiwan Germany

New York, USA

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SLIDE 36

AAPICO HITECH PUBLIC COMPANY LIMITED

36

Significant matters in Q3 2019

SGAH Group AAPICO ceased recognizing interest income on loan given to SGAH Hyundai Motor (Thailand) The Company sold 10% shareholding in Hyundai Motor (Thailand). As a result, the shareholding decreased from 30% to 20% Aapico Vinfast Auto Parts Company Limited (AVAP) The Company sold 51% shareholding in AVAP to Vinfast Trading and Production Limited Liability Company

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AAPICO HITECH PUBLIC COMPANY LIMITED

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SGAH Group

  • Appropriated 50.01% shares in SGAH:

In October 2019, the Company completed the process of appropriating the remaining 50.01% shareholding held by ABT Auto Investment Limited in SGAH, resulting in an increase in Company’s shareholding in SGAH from 49.99% to 100%.

  • Acquired Sakthi Portugal S.A. (Portugal) shares:

In November 2019, the Company acquired 100% shares of Sakthi Portugal S.A. (Portugal) and two subsidiaries, namely Sakthi Portugal SP21, S.A. (Portugal) and Sakthi Portugal GmbH (Germany). Subsidiary

  • Purchase of assets of the car dealership business of Able Motors Co., Ltd. The

transaction value does not exceed Baht 370 million.

Events after Q3 2019

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SLIDE 38

Key focus points

AAPICO HITECH PUBLIC COMPANY LIMITED

38

1.

Revenue and Gross Profit increase while profit is pressured by loss sharing from SGAH.

2.

Good financial position with good governance and credit rating.

3.

Operational efficiency gradually improved.

4.

Paid dividend at THB 0.36 per share for 1H 2019

5.

Substantial orders for new projects starting end 2019 / early 2020.

6.

Global expansion of AAPICO is on the roll.

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