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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
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17
1-Ton Pick-up/PPV Passenger car Others
Source: The Federation of Thai Industry (Automotive Industry)
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
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17
Export Units
Source: The Federation of Thai Industry (Automotive Industry)
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%
2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17
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
2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17
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
2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17
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
Strictly Private & Confidential32
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
Strictly Private & Confidential33
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
Tel: 66 (0) 2613-1504