SET-listed auto parts maker Aapico Hitech Plc (AH) is studying the feasibility of entering the Japanese market after acquiring a 25.1% stake in Indian holding company Sakthi Global Auto Holdings Limited (SGAH) last May.
President and chief executive Yeap Swee Chuan said Aapico is keen on the Japanese automotive industry and has strategic partners there that have localised their manufacturing plants in Thailand. But the company does not have any operations in Japan.
Aapico is partners with Japanese firms Sojitz Corporation, Sanoh Industrial, Mitsuike Corporation and Takagi Seiko Corporation.
"We are looking at every possibility to enter the Japanese market, not only with our current partners," he said. "It is hard to say when we can conclude or disclose the deals, but it may be over the next few years."
Mr Yeap said Aapico is still committed to its ambitious plan of becoming a global automotive company.
Aapico will spend US$100 million (3.13 billion baht) for the SGAH acquisition.
SGAH makes aluminium auto parts for Aapico. The company is registered in the UK and holds stakes in automotive operations in China, India, Portugal and the US.
For the investment, the first $50 million was injected into SGAH last year and the rest will go to the holding company as a convertible loan during 2018-19.
SGAH will pay $10 million in annual interest during 2017-19 to Aapico. In addition, the India-based auto parts maker needs to invest $50 million in Aapico's chassis and forging operations over the next three years.
Mr Yeap said the partnership with SGAH has brought Aapico to new markets such as India, China, Europe, the US and Mexico.
Sakthi is expanding its operations in Mexico, providing a new opportunity for Aapico in Latin America, he said.
After the Aapico-Sakthi deal was completed, Aapico's revenue in 2017 grew by 9.9% to 16.6 billion baht. The company's net profit rose by 107% to a new all-time high of 1.18 billion baht.
Aapico's share price increased by 277% from 9.15 baht on Jan 5, 2016 to 34.5 on Dec 29.
The company's 2017 financial performance was driven mainly by a recovery in the automotive industry in Thailand and car sales in Malaysia.
Mr Yeap expects Aapico's revenue to grow by 3-5% this year, thanks to a positive outlook for Thailand's car production, projected at 2-2.1 million units, compared with 1.99 million last year.
"Aapico is still earning from SGAH and can beef up its total revenue, exceeding expectations," he said.
Founded in 1996, Aapico runs 26 subsidiary and 10 associate firms in Thailand, Malaysia and China. Auto parts manufacturing is Aapico's core competency, accounting for 61% of its operations, while car distribution for Mitsubushi, Ford and Honda cover the rest.
Aapico is targeting revenue of 30 billion baht by 2020, with its net profit margin reaching 10%. Aapico's net profit margin was 7.1% last year, up from 3.8% in 2016.
AH shares closed yesterday on the Stock Exchange of Thailand at 34.25 baht, a decrease of 25 satang, in trade worth 11.4 million baht.