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 AAPICO Hitech Group did not perform well in 2015. The growth that was expected did not materialize. Major infrastructure projects were delayed and the only bright spot was the tourist industry, whilst the other sectors remained languid. The net profit of the Company was Baht 338 million as compared to Baht 386 million in 2014, a decrease of 12.4 percent year on year.

Thailand’s local vehicle sales dropped to 799,632 units from 881,832 units in 2014, a decline of 9.3 percent year on year. Vehicle production however grew slightly from 1.88 million units to 1.91 million units or 1.8 percent. Healthy growth of export largely compensated for the continued tepid domestic market. The forecast for Thailand’s automotive industry in 2016 is expected at around 2.0 million units. The year on year increase is expected to be driven by export growth, which is forecasted to the tune of 1.25 million units in 2016, whilst local demand may remain weak. The new regime of excise tax based on CO2 emission instead of engine size, which cause new car price to increase may be another challenge and dampen overall sales numbers in 2016.

Based on the Bank of Thailand forecast, the Thai economy in 2016 is expected to grow by about 3 percent. This confidence comes from the fact that many major infrastructure projects that have been delayed are in the process of taking off. These projects will stimulate the economy. A stable environment with a working government are an added bonus for 2016.

AAPICO Group’s revenue for 2015 was Baht 15.0 billion, with profits at Baht 338 million. Group revenue fell from Baht 15.2 billion to Baht 15.0 billion compared to a year earlier, due to a negative impact of weaker Malaysian Ringgit which has depreciated against Thai baht by 11% compared to last year. On currency comparable, healthy growth was seen in the Malaysian car dealerships business.

The Group’s best performer was frame production where the volume is huge. Fortunately for us, Isuzu’s volume reduction was lower than the industry as a whole. This was, also, the case for Ford where demand has increased in certain models and we supply many parts. Plastics and forging, also, performed better, although still suffering losses. In any case, most companies are expected to improve in 2016.

In Malaysia where we sell Honda passenger vehicles, two dealerships reported healthy performance and profits. Sales increased from 3,447 units to 3,739 units compared to the previous year. This positive trend is expected to continue in 2016.

We have a new 20,000 square meters factory in China, which is still not fully utilized for producing forged and machining parts. Current businesses occupy about 30 percent of the useful space. In 2015, our China operations had a loss. Our China business is poised to grow due to the country’s enormous market size of 25 million units of assembled cars, with the potential of further growth. The Group’s China operations is expected to perform better this year as plant space is not a constraint and we only need to install machinery in order to increase capacity when new orders are received.

Company debt continues to reduce, as bank loans are being prepaid. As at December 31, 2015, the debt to equity is 55 percent. Our debt reduction will allow us to gear up with lower risks if there is a need for capital expansion or acquisitions if there are good opportunities within our without. It is fortunate that the global economy in general is not too volatile and interest on borrowing still hovers in the 5 percent range. This makes the cost of funds reasonable.

2015 was a more stable year for Thailand and hopefully this trend will continue in 2016. We had very good co-operation and support from our associates, customers, other stakeholders and, also, our Board of Directors. 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 2016.


Mr. Yeap Swee Chuan
President and CEO