AAPICO HITECH PLC [AH] Mr. Yeap Swee Chuan SET Opportunity Day - - PowerPoint PPT Presentation

AAPICO HITECH PLC [AH]

• Mr. Yeap Swee Chuan

SET Opportunity Day

March 9, 2016

Agenda

2

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

Company Profile

AAPICO HITECH PLC [AH]

4

AAPICO PICO HITECH ECH PUBLIC IC COMPANY ANY LIMITED MITED

• Established in 1996 and listed on SET in 2002.
• Main businesses: OEM Auto Parts, Jigs and Dies, Car

Dealerships and Car Navigation.

• Locations: Thailand, Malaysia and China.
• Comprising of 38 companies (28 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 10.50 52 weeks range : Baht 9.15 – 15.80 Market Cap : Baht 3,387 million P/E (YTD) : 12.50* P/BV : 0.58x* Dividend yield : 2.91%*

* Data as of February 29, 2016

AH Shareholding Structure

5

Yeap Family 39.8% Sojitz Corp. 15.8% Free- float 44.4%

AH’s main shareholders are Yeap Swee Chuan and family holding 39.83% of total outstanding shares and Sojitz Corporation holding 15.76% of total outstanding shares.

Thai 81.5% Thai institu- tions 15.4% Foreign institu- tions 3.0% Foreign 0.2%

* Data as of January 11, 2016

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 AND HAPPY WORLD-CLASS CORPORATION

Happy y Custome mers Happy Emplo loyees es Happy y Publi lic Happy Shareh rehold

• lders
• S : Safety
• Q : Quality
• C : Cost
• D : Delivery
• E : Engineering
• M : Management
• Teamwork
• Look at problems as
• pportunities
• Love Family, Company and

Country

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

Responsibility

Company Milestones

7

1985 85

Started as Ford Assembler and Distributor. 1995 Produced fuel tanks for Ford and Mazda pick ups in Ayutthaya.

1997

Established 1st JV with Sanoh Japan and a factory in Hitech Industrial Estate, Ayutthaya.

200 002

Listed on SET.

200 003

Acquired 100% of Dana Corp., USA shares and renamed AAPICO Amata in Chonburi.

200 004

Expanded to China and acquired 100%

• f Kunshan Chaitai-Xincheng Precision

Forging.

200 005

Strategic partnership. Sojitz Corporation, Japan acquired 15% of Aapico shares.

200 006

Acquired 60% of Able ITS shares. Set up AAPICO Hitech Parts in Ayutthaya.

2007

Acquired KPN and renamed AAPICO Forging in Chonburi and Bangplee.

200 008

Established JV (40% equity) with Minth Corporation, China.

200 009

Established AAPICO Structural Products in Chonburi.

2010

Established JV (49% equity) with Takagi Seiko, Japan.

2011

Completed Honda 3S showroom in Malaysia.

2012

Completed Kunshan new factory.

2013

Establish 4 JVs with Lemtech (60%), Edscha (49%), Sumino (49%), and Sodecia (50%)

2014

Acquired 25% equity in Quantum Inventions, Singapore. Set up Training Center in Nakornnayok.

2015

Reorganize non-core business activities.

TURBO

Business Segment

8

• Stamping Parts
• Assemblies

Forging Machining Plastic Navigation Data Analytics Telematics Car Dealerships

• Jigs
• Dies

AAPICO GROUP

Country of Operations

9

THAI HAILA LAND ND

Ayutthaya, Chonburi, Rayong, Samutprakarn

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

Malaysia

Kajang & Petaling Jaya

Car dealer lers: Honda car

2013 77% 2013 17% 2013 6% 2014 69% 2014 26% 2014 5%

2015 73% 2015 23% 2015 4%

Thailand Malaysia China

Sales by Country

CHINA A

Kunshan

Productio ction: Connecting rods and Copper Forging

Locations in Thailand

10

Bangkok Ayutthaya Rayong Chonburi Samutprakan Hitec ech Indu dustr trial ial Estat ate Prod

• duct

ucts : Stamping Dies, Jigs, Stamping parts, and Car navigation Amat ata a Nako korn rn Indu dustria rial l Estate Prod

• duct

ucts : Chassis Frames, Forged and machined parts. Bangp gplee lee Indus ustr tria ial l Estate Prod

• duct

ucts : Plastic parts Amat ata a City y Indus ustr trial ial Estat ate Product

• ducts : Stamping parts and

Plastic parts Mitsubishi Dealers: Ramindra Navanakorn Ford Dealers: Ladprao Samutprakarn

Our OEM Customers

11

Isuzu 45% AAT 14% Nissan 8% SGMW; 4% Toyota; 3% Others-Parts 26%

Isuzu 42% AAT* 16% Nissan 8% Toyota; 4% AAM 3% Others-Parts 27%

Top OEM Customer Profile

*Auto Alliance (Thailand) Co., Ltd – a JV between Ford and Mazda. ** SAIC-GM-Wulling Automobile – a JV between SAIC, GM and Liuzhou Wuling, based in China

Our Partners

12

Technical Partners

Joint Ventures

Strategic Shareholder

Achievements in 2015

13

Achievements in 2015

14

Q1 Award for Aapico Plastics PLC AAT

Achievements in 2015

15

TPS “ The Winner” Advance Group

Aapico Hitech PLC

TMAP-EM QA Improvement “1st Runner Up”

Aapico Hitech PLC

TMAP-EM

Achievements in 2015

16

Aapico China

awarded

“Outstanding Contribution Supplier” CFME Honda CEO Award 2015 To TSR & NESM

Malaysia

Thailand Automotive Industry Update

Thailand Vehicle Production

18 Source: The Federation of Thai Industry (Automotive Industry)

0.3 0.4 0.5 0.6 0.8 0.9 0.9 1.0 0.7 1.1 0.9 1.5 1.3 1.1 1.1 0.2 0.2 0.3 0.3 0.3 0.3 0.3 0.4 0.3 0.6 0.5 1.0 1.1 0.7 0.8 0.0 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

1-Ton Pick-up/PPV Passenger car Others

+1.8%

2015 Thailand Total Vehicle Production grew by 1.8% year-on-year, from 1,880,007 units in 2014 to 1,913,002 units, with 2.4% growth in passenger car production and 0.1% growth in pick-up car production.

Unit: Million Global Financial Crisis Tsunami & Flood First car campaign

Domestic and Export Volume

19

0.3 0.4 0.5 0.6 0.7 0.7 0.6 0.6 0.5 0.8 0.8 1.4 1.3 0.9 0.8 0.2 0.2 0.2 0.3 0.4 0.5 0.7 0.8 0.5 0.9 0.7 1.0 1.1 1.1 1.2

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Total Industry Volume Export Volume

Offsetting the 9.3% decline of Domestic Sales, from 881,832 units in 2014 to 799,632 units, Export volume grew by 6.8% year on-year, from 1,128,102 units in 2014 to 1,204,895 units in 2015.

+6.8 .8%

• 9.3

.3%

Source: The Federation of Thai Industry (Automotive Industry) Unit: Million Global Financial Crisis Tsunami & Flood First car campaign

Q4 Thailand Vehicle Production

20

0.3 0.3 0.4 0.4 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.2 0.3 0.3 0.1 0.2 0.3 0.3 0.3 0.3 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.0 0.2 0.4 0.6 0.8

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15

1-Ton Pick-up/PPV Passenger car Others

Source: The Federation of Thai Industry (Automotive Industry)

In Q4’15, Thailand Total Vehicle Production was at 481,243 units, a 3.1% decrease compared to Q3’15 but was 2.1% higher than Q4’14.

+2.1% yoy

• 3.1%

qoq

Unit: Million

Q4 Total Industry Volume

21

0.16 0.15 0.18 0.19 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 0.16 0.19 0.22 0.20 0.15 0.15 0.13 0.09 0.09 0.09 0.10 0.08 0.07 0.07 0.08 0.0 0.1 0.2 0.3 0.4 0.5

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15

1-Ton Pick-up/PPV Passenger car Others

Source: The Federation of Thai Industry (Automotive Industry)

In Q4’15, Total Industry Volume (TIV) was at 245,800 units, which was 33.1% higher than Q3’15 and 5.3% higher than Q4’14.

+5.3% yoy +33% qoq

Unit: Million

Q4 Export Volume

22

0.22 0.24 0.28 0.28 0.29 0.25 0.31 0.28 0.29 0.27 0.28 0.29 0.33 0.25 0.33 0.30 0.0 0.1 0.2 0.3 0.4

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15

Export Units

Source: The Federation of Thai Industry (Automotive Industry)

In Q4’15, Export Volume was at 299,529 units, a 9.0% decrease compared to Q3’15 but was 3.6% higher than Q4’14.

+3.6% yoy

• 9.0%

qoq

Unit: Million

Financial Performance

For the year 2015

Financial Highlights

• Revenues

s were 1.3% lower than 2014, mainly due to weaker currency and lower scrap income.

• Gross

s profit margin n improved yoy, from 4.2% to 4.9% of sales, thanks to tooling income and efficiency improvement.

• SG&A costs increased, due to loss on currency and

increased level of fixed costs.

• Assoc
• ciat

ate income

• me increased, driven by better results

from ASICO and QI, partly offset lower profit from Hyundai and TTSC.

• Net profit margin

n of the company decreased from 2.5% to 2.3%, largely due to lower revenues.

FY2015 Results

In Million Baht

2013 2014 2015

Revenues

Growth%

16,998

+1.1%

15,196

• 10.6%

14,993

• 1.3%

Gross Profit

GM%

1,075

6.9%

608

4.2%

714

4.9%

SG&A 859 744 787 Associate 246 129 148

• Int. & Tax

347 231 197 Net Profit

NP%

634

3.7%

386

2.5%

338

2.3%

ROE (%) 12.2% 6.9% 5.8% ROA (%) 4.8% 3.1% 2.9% D/E (x) 0.85 0.67 0.55

AAPICO Group : Total Revenues

25

3,691 3,869 4,039 3,597 3,758 3,574 3,672 3,990

• 500

1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15

Total Revenues by quarter

Unit: in Million Baht

Auto parts Car dealers

2014, 63% 2014, 37%

2015, 65% 2015, 35%

Total Revenues (FY)

Auto parts Car dealers

• Q4’15 vs. Q4’14: Revenue grew 11%, driven by growth in

car dealerships and auto parts sales in Thailand.

• Q4’15 vs. Q3’15: Revenue grew 9%, mainly driven by

higher car sales in both TH and MY.

• FY15

5 vs. FY14: Revenue was 1.3% lower than last year, mainly due to weaker currency exchange and lower scrap income.

• Adjusted for currency impact, sales grew y-o-y, driven by

higher car sales in TH and MY and TH auto parts sales.

Auto Parts : Sales & EBIT

26

2,336 2,086 2,487 2,165 2,417 2,302 2,382 2,231

• 4,000

8,000 12,000

1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15

Sales by quarter

Unit: in Million Baht

9,074 9,332 376 283

2014 2015

FY Sales & EBIT

Unit: in Million Baht

+2.8%

• FY15 vs. FY14
• Sales grew 2.8%, driven by higher sales in Thailand, while China sales declined

due to slow down in the economy.

• Despite higher sales, EBIT decreased, mainly due to increased level of fixed

costs and lower scrap income. EBIT margin dropped from 4.1% in 2014 to 3.0%

• f sales in 2015.

2014 92% 2014 8%

2015 TH 94% 2015 CN 6%

5,498 5,202 112 104

2014 2015

FY Sales & EBIT

Unit: in Million Baht

Car Dealers : Sales & EBIT

27

1,238 1,548 1,416 1,296 1,239 1,149 1,178 1,636

• 2,000

4,000 6,000

1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15

Sales by quarter

Unit: in Million Baht

• 5.4%
• FY15 vs. FY14
• Sales decreased by 5.4% y-o-y, mainly due to weaker currency. Adjusted for

currency impact, both Thailand and Malaysia posted higher car sales.

• EBIT decreased y-o-y as a result of lower sales. EBIT margin in 2015 was about

the same as 2014 at 2.0% of sales.

2014 32% 2014 68%

2015 TH 35% 2015 MY 65%

EBITDA

28

341 305 307 260 285 248 313 287 (100) 100 300 500 700 900 1,100 1,300 1,500

1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15

Unit: in Million Baht EBIT Depreciation

1,213 1,132 2014 2015

EBIT Depreciation

4.4% 3.3% 3.2% 1.8% 2.6% 1.8% 3.4% 2.5%

9.2% 7.9% 7.6% 7.2% 7.6% 6.9% 8.5% 7.2% 0% 5% 10%

1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15

Unit: as % of revenue EBIT% EBITDA%

3.2% 2.6%

8.0% 7.6%

2014 2015

EBIT% EBITDA%

Net Profit

29

154 107 92 33 100 40 112 85

• 100

200 300 400 500

1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15

Unit: in Million Baht Profit from operations Associate income

386 338 2014 2015

Operations Associate 4.2% 2.8% 2.3% 0.9% 2.7% 1.1% 3.1% 2.1% 0% 2% 4% 6%

1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15

Unit: as % of revenue Net Profit % 2.5% 2.3%

2014 2015

Net Profit %

Profitability Ratios [ROE & ROA]

30

23.6% 20.7% 20.0% 12.2% 9.4% 7.7% 6.6% 6.9% 5.8% 4.6% 4.9% 5.8% 0% 5% 10% 15% 20% 25% 30%

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15

Unit: in percentage ROE (In the Quarter) ROE (Seasonally adjusted)

R O E R O A

8.2% 7.4% 7.3% 4.8% 3.8% 3.2% 2.9% 3.1% 2.7% 2.2% 2.4% 2.9% 0% 2% 4% 6% 8% 10%

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15

Unit: in percentage ROA (In the Quarter) ROA (Seasonally adjusted)

Debt Service Ability Ratios

31

5.0 4.8 4.7 3.6 3.2 2.9 2.9 3.0 2.8 2.5 2.7 3.1 0.0 3.0 6.0

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15

Unit: times Interest Coverage Ratio (In the Quarter) Interest Coverage Ratio (Seasonally adjusted)

I C R Debt / EBITDA

2.7 2.8 3.0 3.3 3.5 3.8 3.6 3.5 3.4 3.6 3.2 3.1 0.0 3.0 6.0

1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15

Unit: times Debt to EBITDA (In the Quarter) Debt to EBITDA (Seasonally adjusted)

Capital Structure

32

• Net interest-bearing debt to equity ratio continually decreased to 0.55x,

in line with lower debt level.

• Total liabilities net cash (Net debt) to equity ratio also decreased to

0.92x as end of 2015, in compliance with the financial covenant target of less than 2.00x.

ST 20% CPLTD 28% LT Loans 28% Bond 24%

Interest-bearing Debt

Interest-bearing debts as of Dec 2015 was THB 3.3 billion. During the year, debt level has reduced by THB 514 million, due to loan repayment.

1.07 0.85 0.67 0.63 0.61 0.56 0.55

1.74 1.26 1.13 1.09 1.06 1.00 0.92

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 1Q15 2Q15 3Q15 4Q15

Unit: in Billion Baht

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

Capital Expenditures

33

197 34 157 73 67 93 46 68

50 100 150 200

1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15

Unit: in Million Baht

160 1,145 1,237 734 460 273

500 1,000 1,500 2,000

2010 2011 2012 2013 2014 2015

Capital Expenditures

Unit: in Million Baht

Capital expenditures in 2015 has decreased year-on-year, from THB 460 million in 2014 to THB 273 million. In Q4’15, capital expenditures were THB 68 million compared to THB 73 million in Q4’14.

Strategy & Direction

Thailand Automotive 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 2.0 2.5 2.8 3.0 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Production Forecast Total Industry Volume (TIV) Export Volume ~5%

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

The forecast of Thailand vehicle production volume in 2016 is expected to reach around 2.0 million units, of which local/export ratio is expected around 40:60.

Global Financial Crisis Tsunami & Flood First car campaign

Finance Strategy

36

Profita- bility Liquidity Equity

Maximize shareholder value

Shareholder portfolio and generate return to shareholders Portfolio diversification Cash flow management Improve profitability through margin management

Business Strategy

To be a leading automobile parts manufacturer in Asia, a Thailand footprint for world-class global manufacturer.

ASIA EUROPE

AMERICA

JAPAN

CHINA INDIA

THAILAND MALAYSIA PHILLIPPINES INDONESIA

Disclaimer

38

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

Share Repurchase Program

40

Amount : Baht 150 million Number of shares : Not exceeding 14.5 million shares or equivalent to 4.5% of paid-up capital of the company Procedure : Purchase on the SET Period : March 15, 2016 to September 14, 2016 Repurchase price : The repurchase price shall not exceed the average closing price in the period of 5 consecutive business days prior to each repurchase date plus 15% of such average closing price Source of Fund : The company expects cash inflows from operations and dividend payment from subsidiary and associate companies, which provides sufficient liquidity to repay its debts due within the next 6 months and to repurchase its shares. Reasons and Impact : Financial ratios e.g. ROE, EPS will improve as a result of decreased number of shares. Shareholders shall receive higher dividend as repurchased shares are not eligible to receive dividend.