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 2017 was a remarkable year for the AAPICO Group. Firstly, the Company had entered into a strategic partnership with Sakthi Automotive Group in order to grow our businesses together and also utilize both company’s strength to achieve long-term sustainable growth. This step marked another milestone for AAPICO to become a leading automotive part supplier on a global scale. Secondly, the Group recorded strong earnings for the year 2017. The continuous improvement in production efficiency and cost reduction measures were the key drivers for the group’s profitability improvement. These factors, together with the recovery of the domestic car industry and the additional interest income from the SGAH investment boosted the Company’s net profit to Baht 1,158 million, as compared to Baht 543 million in 2016. This is a significant increase of 113 percent, year on year growth.

Overall, the year 2017 was a positive year for the key markets in which the Company was active in. The Thai automotive industry saw its total vehicle production increased, albeit slightly, by 2.3% to 1.988 million units. The growth was driven by a healthy increase in the domestic demand for vehicle sales, which grew by 13.4%, reversing the negative trend in 2016. This was more than offset the decrease in the vehicle export volume of 4.1%. In the Malaysian market, Honda maintained its lead in the non-national car segment by breaching the 100,000 mark for the first time ever, registering a sales volume of 109,511 units for the year 2017. This is an improvement of 19% from the previous year. The automotive market in China continued its position at being the largest automobile market in the world for the 9th consecutive year, with a total production and sales volume of 29 million units and 28.9 million units respectively. In addition the automotive market in China continued to lead the world in terms of production and sales of new energy vehicles, which are mainly pure electric vehicles or with plug in hybrid engines.

For the year 2018, the Thailand total automotive production is forecasted to breach 2 million units. With this, the domestic car sales will continue to be the engine for growth of the automotive industry. The outlook for the domestic market and local sentiment remains positive as the country’s economy is expected to continue to recover. The Bank of Thailand forecast the Thai economy to expand by about 3.9 percent in 2018. This upward revision is expected from the continued improvement in merchandise exports and tourism sectors, expansion of private consumption and investment, and the increased government’s spending disbursement. On the downside, there are possibilities that the growth might be lower than projected due to uncertainties pertaining to US foreign trade policy, geopolitical risks, and risks of lower-than-expected domestic spending.

AAPICO Group’s revenue for 2017 was at Baht 16.6 billion as compared to Baht 15.1 billion in 2016. This revenue increase was higher than the overall industry growth, and was driven by increased volume from our major manufacturing customers in Thailand and China, and the good car sales which is driven by increased demand in the local market. In addition, the revenue in 2017 included the interest income from the US dollar loan given to Sakthi Automotive Group amounting to Baht 191 million and the gain of Baht 160 million from sales of equity investments in the car navigation business in Singapore.

The Group’s best performance business continued to be the frame production where the volume is huge. The Company also benefitted from increased customer’s manufacturing volume as compared to last year. The forging and plastic businesses continued to improve and recorded some small profits. Generally, most companies reported improved performance as compared to last year, basically from the continuous efficiency improvement, strict cost control and cost reduction measures taken. This earning increase however was partly negated by lower sales from the tooling jigs and stamping dies business.

Our two Honda dealerships in Malaysia continued to report healthy performance and profit, with increased sales of 4,529 units from 3,774 units as compared to the previous year. This positive trend is also expected to continue in 2018.

Our China operations also reported improved results in 2017. The utilization of our 20,000 square meters factory in China have been around 30% for the production of forged and machining parts. The outlook for our China business remains positive and is poised to grow due to the country’s enormous market size and the potential of further growth. With the continued support from the Chinese government to the automotive industry, this industry is expected to continue to be one of key drivers for the Chinese economy.

The Company’s financial position remains solid. Although the recent acquisition have increased our debt to equity ratio to 0.69 times as of December 31, 2017, the company still have room to increase our gearing ratio with lower risks as and when there is a need for capital expansion or acquisitions, in the event of available good opportunities. We expect to maintain our strong financial position and will continue to closely monitor the sentiment of the global economy and also to keep our cost of funds at a reasonable low level.

With the notable performance in 2017, the Board of Directors proposed the total dividend payment of Baht 1.20 per share for the fiscal year 2017, subject to shareholders’ approval in April 2018. With this, the total dividend yield is in the range of 4-5 percent.

The year 2017 has been an outstanding year for the AAPICO Group. We had very good co-operation and support from our partners, associates, customers, other stakeholders and, also, from 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 2018.


Mr. Yeap Swee Chuan
President and CEO