AAPICO’s Vision

“Our vision is to become a lean green and
happy world-class organization with 4 fundamental
values of Happy Customers, Happy Employees,
Happy Shareholders, and Happy Public.”

THE YEAR 2016 was a tragic year for Thailand with the passing of His Majesty the late King Bhumibol Adulyadej on October 13, 2016. The nation mourned in grief for their beloved king, who has been seen as the Father figure of the Nation, due to his dedication for the country and his great works that helped the people of Thailand to improve their quality of lives in sustainable ways. Together with all Thai people, we share our deep condolence to this great loss and will carry on his teachings in remembrance to our great King.

Last year continued to be another challenging year for AAPICO Group. The country was impacted by a long and severe drought, despite the recovery of private consumption and public spending. Tourism and the service sectors continue to be the key drivers for growth. The Company benefited from our strong customer portfolio and with its continuous cost reduction measures. These 2 factors has helped boost the Company’s net profit to Baht 570 million as compared to Baht 338 million in 2015, which is a significant growth of 69 percent year on year.

The overview of domestic consumption was gloomy with Thailand’s domestic vehicle sales dropping further to 768,788 units as compared to 799,632 units in 2015, a decline of 3.9 percent year on year. Export sales were also affected by weak economy in key importing countries. Export shipments in 2016 ended at 1.19 million units, a 1.4 percent reduction compared to the previous year. However, vehicle production grew slightly from 1.91 million units to 1.94 million units, an increase of 1.6 percent. Looking ahead, domestic sales is seen to be the key driver to deliver a forecasted growth of 2.9% to 2 million cars in 2017. The expiration of the five year lock up period for vehicle bought under the first car scheme and government stimulus packages is expected to be key engines for domestic growth in 2017.

The Bank of Thailand forecast the Thai economy to expand by about 3.2 percent in 2017, driven mainly by private consumption from improved farm income, public spending and continued fiscal stimulus, and exports of services. However, there may also be some increased downside risks and greater uncertainties from domestic and external factors. As such, a stable environment with a working government would help balance the risks and stimulate growth for Thai economy in 2017.

AAPICO Group’s revenue for 2016 was Baht 15.1 billion with a net profit of Baht 570 million. This revenue increase is lower than the overall industry growth as revenue increase was negated by lower steel prices and also from weaker Malaysian Ringgit, which has depreciated against Thai baht as compared to a year earlier.

The Group’s best performer continued to be the frame production where the volume is huge. The Group was lucky that our main customer’s volume increased or maintained at the same level as the previous year. Plastic and forging business continued to improve and almost break-even. Generally, most companies reported improved performance as compared to last year.

Despite the poor performance of the local Malaysian car market, the two Honda dealers in Malaysia continued to report healthy performance and profit, with increased sales from 3,739 units to 3,774 units as compared to the previous year. This positive trend is expected to continue in 2017.

On the other hand, our China operations, reported another loss in 2016. The 20,000 square meters factory in China continued to be not fully utilized as only 30 percent is used for production of forged and machining parts. However, the outlook for our China business remains positive and is poised to grow due to the country’s enormous market size and potential of further growth. With the support from the Chinese government to the automotive industry, this will continue to be one of key drivers for the Chinese economy.

Our company debt level continue to reduce, with debt to equity ratio standing at 40 percent as of December 31, 2016. This reduced debt level will allow us to increase our gearing ratio with lower risks when there is a need for capital expansion or acquisitions if there are good opportunities. We expect to maintain our strong financial situation and will closely monitor the sentiment of global economy as uncertainties remain considerable, and hence the need for us to keep our cost of funds at a reasonable low level.

With the notable performance in 2016, the Board of Directors proposed the final dividend payment of Baht 0.66 per share, subject to shareholders’ approval in April 2017. With this, the total dividend yield is in the range of 5 percent.

The year 2016 has been a year of challenges for Thailand and the AAPICO Group. We had very good co-operation and support from our partners, associates, customers, other stakeholders and, also, our Board of Directors and employees. I really appreciate all your kind support and would like to take this opportunity to express my sincere thanks and look forward to your continued support in 2017.


Mr. Yeap Swee Chuan
President and CEO