What is the outlook of the company?
  • The company’s sales normally trends in the same direction as Thailand’s automotive industry which includes 50% export and 50% domestic sales. According to The Federation of Thai Industries (FTI) estimation, total car production volume in 2020 is estimated at 1.3-1.4mn cars, assuming that there is no 2nd wave of COVID-19. This is a decrease of 30-35% from 2mn cars in the previous year as a result of the COVID-19 pandemic.
  • The company believes that the worst situation, the second quarter of this year, is now over. We are now seeing a stronger than expected recovery trend with strong third quarter sales and strong forecast orders for the fourth quarter as well. The rebound for Q3 and Q 4 is moving in a V shape growth based on forecast. In Europe, there seem to be shortage of cars and our casting demand is very strong during this period
  • The company acquired 100% shares of AAPICO Maia S.A. (Portugal) in Q4 2019 and 2020 will be the first year of full-year performance consolidation into AAPICO Group result. Sale contribution from Portugal represents approximately [20%] of AAPICO Group’s total revenue which means the group revenue will now have increased effect from European market automotive industry situation to its consolidated performance.
  • Similar to Thailand, our operations in Portugal has seen a strong recovery in the third quarter and we took the opportunity while all operations were halted during the second quarter to reconfigure our production in Portugal as well as to improve our internal efficiency. Portugal is expected to contribute positively to overall AAPICO’s profit in the second half of 2020.
Are there any concern on the rise of steel price?
As steel is a primary raw material which accounts for approximately 70-80 % of total product costs. The Company has therefore taken actions to mitigate this risk of fluctuation in steel price by adopting a centralized purchasing policy. Under this policy, Steel price is decided by the OEMS. When the steel price increase, the sale of part price is increased and when the steel price decrease, the part price is decreased. The Company therefore is able to essentially pass on exposure to steel price to car automakers.
Which business unit has the highest profit margin ?
According to 2019 Financial Results, the OEM Automotive Parts Manufacturing Business contributed the highest EBIT margin in AAPICO Group; at 8.3%.
What is AH sales breakdown by countries?

In 2019, Sales contribution by countries are as follows:

Thailand 73%
Malaysia 19%
Portugal 5%1
China 3%

1 The company has started to consolidate Portugal Financial Statement from Q4 2019 onwards due to the acquisition of 100% shares of Portugal in October 2019. Therefore, the total contribution from Portugal was only 5% in 2019.
Kindly be noted that, prior to the acquisition, Portugal performance was reflected via share of profit (loss) from SGAH. In 2020, Portugal’s revenue would contribute about 20 percent of total revenue