AAPICO HITECH PLC [AH] Presentation for Q1 2019 financial statements - - PowerPoint PPT Presentation

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AAPICO HITECH PLC [AH] Presentation for Q1 2019 financial statements - - PowerPoint PPT Presentation

AAPICO HITECH PLC [AH] Presentation for Q1 2019 financial statements Opportunity Day 29 May 2019 Disclaimer The information contained in this material has been prepared by AAPICO Hitech PLC (AH or AAPICO) solely for information


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SLIDE 1

AAPICO HITECH PLC [AH]

Presentation for Q1 2019 financial statements Opportunity Day

29 May 2019

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SLIDE 2

Disclaimer

2

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

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SLIDE 3

Agenda

3

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

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SLIDE 4

AAPICO Hitech PLC

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SLIDE 5

AAPICO HITECH PLC [AH]

5

AAPICO HITECH PUBLIC COMPANY LIMITED

  • A leading OEM automotive parts manufacturer in

Thailand with global operations through strategic partnerships in India, Portugal, USA, and China.

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

Car Dealerships and IoT Connectivity & Mobility.

  • Main locations: Thailand, Malaysia and China.
  • Registered 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 19.10* Market Cap : Baht 6,161 million* P/E (YTD) : 4.65* P/BV : 0.79* Dividend yield** : 6.81%* TRIS / CG Rating : BBB+ /

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

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SLIDE 6

AAPICO’s Vision

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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SLIDE 7

Core Pillars of AAPICO Business

7

Auto Part Manufacture Car Dealerships IoT Connectivity & Mobility

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SLIDE 8

Business Segments

8

Manufacture of Auto Parts

(Thailand & China)

Car Dealerships

(Thailand & Malaysia)

IoT Connectivity

(Thailand) ~64% of total revenue ~36% of total revenue <1% of total revenue

Thailand Malaysia

Stamping & Assemblies Forging & Machining Plastic Jigs and Dies

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SLIDE 9

Countries of Operations

9

Thailand 73% Malaysia 23% China 4%

2018

Sales by Country

CHINA

Kunshan Production: Connecting rods and Copper Forging

MALAYSIA

Kajang & Petaling Jaya Car dealers: Honda car

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

10

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SLIDE 11

Our Partners

11

Joint Venture

Strategic Partner Technical Partner

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SLIDE 12

Awards and Achievements

12

AAPICO Group has been widely recognized for its excellence in product quality, efficiency in its production processes, and continuous improvements over the years. The Company has repeatedly received awards from its customers and partners in recognition for excellent quality and delivery and contribution to growth.

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SLIDE 13

Automotive Industry Updates

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SLIDE 14

Thailand Car Production Volume

14

276 264 302 288 310 295 313 332 200 192 214 213 220 212 224 221

486 465 527 511 540 517 548 564

  • 100

200 300 400 500 600 700

1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 Pick-Up/PPV Passenger Others Domestic Sales Export Sales

310 328 220 223

540 561 Q1 2018 Q1 2019

Total Car Production by Quarter

Jan-Mar Car Production

‘000 Units

+4.0% yoy

Source: The Federation of Thai Industry (Automotive Industry)

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SLIDE 15

118 133 90 103

29 28

237 264 Q1 2018 Q1 2019

Thailand Domestic Car Sales Volume

15

Domestic Car Sales by Quarter

Jan-Mar Domestic Sales

107 94 102 121 118 119 123 151 80 81 83 102 90 100 101 109

23 24 25 28 29 33 34 35

210 199 211 251 237 252 257 295

  • 100

200 300 400

1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1-Ton Pick-Up/PPV Passenger cars Other vehicles

‘000 Units

+11.2% yoy

Source: The Federation of Thai Industry (Automotive Industry)

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SLIDE 16

Thailand Export Volume

16

Export Volume by Quarter

Jan-Mar Export Volume

295 300 Q1 2018 Q1 2019 284 252 314 290 295 267 297 282

  • 100

200 300 400

1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 Export Volume

‘000 Units

+1.6% yoy

Source: The Federation of Thai Industry (Automotive Industry)

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SLIDE 17

Thailand Total Industry Volume

17

#

Maker January – March

2018 2019 %

1 Toyota

64,094 86,131 +34.4%

2 Isuzu

44,316 44,922 +1.4%

3 Honda

28,435 30,004 +5.5%

4 Mitsubishi

20,696 23,991 +15.9%

5 Nissan

16,965 18,958 +11.7%

6 Mazda

16,586 16,579 0.0%

7 Ford

17,235 14,330

  • 16.9%

14 Hyundai

1,245 1,409 +13.2%

Others

27,521 27,225

  • 1.1%

Total

237,093 263,549 +11.2%

Source: Toyota

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SLIDE 18

Malaysia Total Industry Volume

18

#

Maker January – March

2018 2019 %

1 Perodua

55,568 60,659 +9.2%

2

Honda

24,182 22,190

  • 8.2%

3 Proton

12,843 18,281 +42.3%

4 Toyota

12,683 13,722 +8.2%

5 Nissan

5,310 5,166

  • 2.7%

6 Mazda

3,439 3,311

  • 3.7%

7 Mercedes

3,395 3,018

  • 11.1%

14 BMW

2,520 2,565 +1.8%

Others

15,200 14,152

  • 6.9%

Total

135,140 143,064 +5.9%

Source: MAA

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SLIDE 19

Financial Performance

Q1 2019

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Financial Highlights

20

  • Revenue declined due to lower car sales in TH&MY,

partly offset by growth in auto parts sales and higher interest income.

  • Gross profit increased due to improved efficiency

and cost reduction and profit from tooling sales.

  • EBIT increased, driven by improved performance of

core businesses.

  • Interest and Tax expenses increased due to higher

debts and the completion of BOI tax incentive.

  • Core profit from operations increased. However,

Net profit was impacted by share loss from SGAH.

Q1 2019 Key Financials

In Million Baht

Q1 2018 Q1 2019 Revenues

Growth%

4,496

+13.9%

4,479

  • 0.4%

Gross Profit

GP Margin (%)

308

7.2%

375

8.9%

EBIT 302 368 Interest & Tax (59) (126) Core profit

Profit Margin (%)

238

5.3%

242

5.4%

Associate 159 (26) Net Profit

NP Margin (%)

397

8.8%

216

4.8%

D/E (x) 0.60 0.80

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SLIDE 21

4,496 4,479

Q1 2018 Q1 2019

Jan-Mar Revenue

AH Group Revenue slightly declined

21 3,946 3,903 4,284 4,509 4,496 4,283 4,416 4,576

3,000 3,500 4,000 4,500 5,000 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18

Total Revenues by quarter

Sales Other income Interest income

  • ne-time gains
  • Q1 2019 Revenue was 0.4% lower than Q1 2018, mainly due to

lower car sales in Thailand and Malaysia. These decreases were partly offset by growth in auto parts and higher interest income.

THB million

  • 0.4%

yoy

Thailand 79% Malaysia 18% China 3%

Q1 2019

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SLIDE 22

Auto Parts: Sales & EBIT increased

22

2,470 2,286 2,511 2,432 2,685 2,473 2,582 2,901

8.3% 4.9% 3.5% 5.6% 7.8% 9.6% 7.3% 10.9%

  • 1,000

2,000 3,000 4,000 5,000 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18

Sales and EBIT by quarter

Thailand China EBIT% 2,685 2,995 7.8% 9.2%

Q1 2018 Q1 2019

Jan-Mar Sales & EBIT

THB million

+11.5% yoy

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SLIDE 23

Car Dealers: Sales declined yoy

23

1,355 1,340 1,539 1,834 1,578 1,528 1,587 1,388

1.1% 1.3% 1.2% 1.3% 1.3% 1.5% 1.5% 1.5%

  • 1,000

2,000 3,000 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18

Sales and EBIT by quarter

Thailand Malaysia EBIT% 1,578 1,233 1.3% 1.5%

Q1 2018 Q1 2019

Jan-Mar Sales & EBIT

THB million

  • 21.9%

yoy

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SLIDE 24

Core Earnings continuously increased

24 321 451 339 396 461 512 468 560

  • 200

400 600 800 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Unit: THB Million

EBIT Depreciation 461 517

Q1 2018 Q1 2019

EBIT Depreciation 3.9% 7.5% 4.3% 5.5% 6.7% 8.0% 6.9% 10.0% 8.1% 11.6% 7.9% 8.8% 10.3% 11.9% 10.6% 12.2% 0% 5% 10% 15%

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Unit: as % of revenue

EBIT% EBITDA% 6.7% 8.2% 10.3% 11.5%

Q1 2018 Q1 2019

EBIT% EBITDA% +12.1% yoy

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SLIDE 25

Net Profit impacted by SGAH loss

25 224 315 243 376 397 305 302 295

(200) (100)

  • 100

200 300 400 500 600 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Unit: THB Million

Profit to equity holders from operations Associate income 397 216

Q1 2018 Q1 2019

Operations Associate 5.7% 8.1% 5.7% 8.3% 8.8% 7.1% 6.8% 6.4%

0% 5% 10% Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Unit: as % of revenue

Net Profit % 8.8% 4.8%

Q1 2018 Q1 2019

Net Profit %

  • 45.6%

yoy

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SLIDE 26

Financial performance still at good level

26 10.1% 13.0% 14.8% 17.8% 19.5% 18.9% 19.8% 17.7% 14.4%

0% 10% 20% 30%

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19

Return on Equity (ROE)

ROE (In the Quarter) ROE (Seasonally adjusted)

5.5% 6.3% 7.3% 9.1% 10.3% 9.0% 9.2% 8.2% 6.8%

0% 5% 10% 15%

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19

Return on Asset (ROA)

ROA (In the Quarter) ROA (Seasonally adjusted)

6.4 8.1 8.4 9.2 9.1 8.5 8.8 7.7 6.5

0.0 4.0 8.0 12.0

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19

Interest Coverage Ratio (ICR)

ICR (In the Quarter) ICR (Seasonally adjusted)

2.2 3.2 2.9 2.5 2.1 2.9 2.7 2.8 2.7

0.0 2.0 4.0 6.0

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19

Debt to EBITDA

Debt/EBITDA (In the Quarter) Debt/EBITDA (Seasonally adjusted)

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SLIDE 27

Net gearing in line with target

27

  • Net interest-bearing debt to equity ratio as of March 2019 was 0.80x,

compared to 0.60x as of Q1 2018, and was within the Company’s target

  • f less than 1.00x.
  • Total liabilities net cash (Net debt) to equity ratio as end of March 2019

was 1.21x, which was still within the financial covenant target of less than 2.00x.

ST Loan 10% CPLTD 22% LT Loan 43% LT Bond 25%

Interest-bearing Debt

Interest-bearing debts as

  • f March 2019 was THB 6.7

Billion, mainly used for investment and new project.

0.85 0.67 0.55 0.40 0.69 0.60 0.56 0.62 0.80 0.80 1.26 1.07 0.87 0.74 0.99 0.92 0.91 1.01 1.18 1.21

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 2013 2014 2015 2016 2017 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Unit: in THB Billion

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

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SLIDE 28

Strategy & Direction

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SLIDE 29

Thailand Automotive Outlook in 2019

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 2.15

  • 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 to maintain production volume at 2.15 million cars, of which 1.05 million cars to be sold locally and 1.1 million cars for export.

  • 0.8%
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SLIDE 30

Stable sales volume with steady growth

30

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

Sample of automotive parts sales orders for current and new models

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SLIDE 31

Continued orders going forward

31

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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SLIDE 32

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

32 China 29% Japan 10% India 6%

Thailand 2%

Rest of Asia 8%

Europe 22% America 22% Africa 1%

2017

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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SLIDE 33

Business Strategy – To be Global

33

CHINA INDIA EUROPE USA JAPAN THAILAND MALAYSIA

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SLIDE 34

Key Milestones

34

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).

  • Established JV with

VINFAST to set up assembly plant in Haiphong, Vietnam for the first 2 models of VINFAST vehicles.

  • Acquired additional

24.89% equity in SGAH.

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.

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SLIDE 35

Global Manufacturing Footprints

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

Japan Taiwan Germany

New York, USA

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SLIDE 36

Key focus points

36

1.

Strong operational performance improvement in core businesses. Revenue and profit is on the upside.

2.

Cash flow from operations continually increased.

3.

Strong financial position with good governance and credit rating.

4.

Good dividend payment. Paid dividend at THB 1.30 per share in 2018.

5.

SGAH loss was reduced. Operational efficiency gradually improved.

6.

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

7.

New substantial order and expansion into Vietnam on progress.

8.

Global expansion of AAPICO is on the roll.

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SLIDE 37