Aapico eyes expansion abroad

Aapico eyes expansion abroad

Company confident of sealing deals this year

SET-listed auto parts maker Aapico Hitech Plc (AH) expects to seal overseas expansion deals this year, having completed feasibility studies over the past several years.

President and chief executive Yeap Swee Chuan said Aapico has been working closely with overseas partners and is highly likely to close at least one deal this year.

According to Aapico's strategic plan, India is where it hopes to expand into, as the country is one of the world's leading automotive manufacturing bases.

Aapico operates in Thailand, Malaysia and China.

The company also hopes to establish footprints in the US and Europe.

"We are seeking automotive partners worldwide. Running the business from Thailand alone is too limited for sustainable growth," he said.

According to Mr Yeap, Aapico is financially ready for overseas expansions, with a low debt-to-equity ratio (D/E) of 0.74.

Mr Yeap expects Aapico's revenue to grow by 5% this year to 16 billion baht, given that the Thai vehicle industry is moving towards a recovery.

He projects the country's vehicle production will reach 2 million vehicles this year compared with 1.94 million units last year.

Domestic car sales are expected to increase by 5% this year to 800,000 cars.

Car output exceeded 2 million units in 2012 and 2013, due to the high sales volume induced by the tax rebate programme.

Aapico reported 2016 revenue of 15.4 billion baht, up by 1.45%, while net profit rose sharply by 73.5% to 543 million baht.

Mr Yeap said Aapico's gross profit margin in 2016 improved to 5.9% from 4.9% in 2015 from lower operation costs and higher profit margins.

Net profit margins rose by 1.5% to 3.8% in 2016. He expects the company to maintain similar gross profit levels at 6% this year.

Founded in 1996, Aapico has 29 subsidiaries and nine associates in three countries.

Auto parts manufacturing is Aapico's core business, accounting for 64% of total revenue, while the rest is from car distribution for Mitsubishi, Ford and Honda.

Some 75% of the company's total revenue stems from Thailand.

Aapico's milestone is to become one of Asia's leading automotive companies by 2020 with a revenue of 30 billion baht, with net profit margin of 10%.

AH shares closed yesterday on the SET at 18 baht, up 60 satang, in trade worth 20.8 million baht.

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