Bualung Securities classifies AAPICO a BUY


Bualung Securities reports after AAPICO Opportunity Day 29.11.2012:

Profit in line with estimate

AH reported a 3Q12 net profit of Bt168m, up 24% YoY but down 40% QoQ. The result was in line with our estimate but below 22% the Bloomberg consensus. 9M12 earnings jumped 98% YoY to Bt543m (boosted by insurance payouts and stronger other income than assumed), which represents 94% of our earlier FY12 projection.

Results highlights

Sales rose by 42% YoY and 9% QoQ to Bt4.3bn. The 3Q12 top-line expansion was due to capacity expansion at AH's main plant in Hitech Industrial Estate in order to supply rising demand from car makers for component parts to manufacture vehicles for both domestic and export sale. Gross margin fattened further to 6.6percent from 6.3% the previous quarter. But AH's net margin fell to 4.0percent from 7.1% in 2Q12 and 4.5% in 3Q11 because of higher OPEX, mostly related to the new capacity.

Outlook

We anticipate that the firm will deliver weaker QoQ core earnings for 3Q12 (excluding insurance payouts), as its new capacity entails higher OPEX during the commissioning stages.

What's changed?

We have revised up our FY12 earnings projection by 17% to Bt677m to factor in gains from insurance payouts of about Bt100m during 9M12. We maintain our FY13 and FY14 forecasts unchanged at Bt600m and Bt690m, respectively.

Recommendation

Our YE13 target price stands at Bt27.5, pegged to a PER of 12x. AH currently trades at an undemanding FY13 PER at 8.4x, which is significantly below its long-term mean of Bt12.3x. Given 46% upside to our YE13 target price and scope for further earnings forecast upgrades on new orders from Toyota and Isuzu in 2H13, we maintain our BUY rating.

You can follow the webcast here (in Thai language) and download their presentation here (in English language).

Comments

Post a Comment

Popular posts from this blog

Golden year for auto industry

Image
THE NATION reports: This year can certainly be considered the golden year for Thailand's automobile industry. Just grab a look at these figures: apart from achieving a new sales record of an expected 1.4 million vehicles, 2012 also marks the first year that the industry has broken the 2-million-vehicle production mark. Auto exports from Thailand this year is estimated at Bt1 trillion, making the auto industry the biggest earning industry, with 1-tonne pickup trucks and eco-cars as the mainstream products, as well as auto parts and components. Watching this growth trend, many are already eyeing the 3-million-vehicle production mark for the auto industry. The Industry Ministry along with the Federation of Thai Industries (FTI), the Auto Industry and the Auto Parts Industry Club of the FTI, Thai Automotive Industry Association (TAIA), Thai Auto Parts Manufacturers Association (TAPMA), Board of Investment (BoI) and the Thai Automotive Institution (TAI) recently celebrated the 2-million...
Read more

Thailand: Auto sales increase 17.8% in April

Good news for the weekend! New vehicle sales in Thailand rose to a record 67,283 units in April 2011, up 17.8% compared with the levels reported in the corresponding month a year earlier. With this increase, vehicle sales in the first four months of this year increased 36.6% year-on-year to a record 305,902 units. Bangkok Post, citing figures compiled by Toyota Motor Thailand, said the passenger car segment accounted for 30,953 units out of total sales last month, an improvement of 17.8% from a year ago. Sales were driven by the continued demand for small and fuel-efficient cars.
Read more

Asahi Tec chooses Laos ahead of Thailand

Image
Via Bangkok Post:  VIENTIANE : Higher labour costs and a labour shortage in Thailand have prompted Japanese auto parts maker Asahi Tec Corporation (ATC) to build its new overseas factory in Laos. The 1.6-billion-baht plant in Savannakhet province will manufacture aluminium die casting parts. "The labour shortage and high cost of expansion are the main problems for the expansion plan in Thailand, so Savannakhet is our new investment destination," said ATC director and chairman Shoichiro Irimajiri. ATC's four factories in Thailand, which produce aluminium and iron casting parts, have already reached full capacity. A new company, BMM Asahi Tec, has been formed through an equal joint venture with leading Lao company BMM Group, which is involved in property development and duty-free retailing. The factory will be located in the Savan-Seno Special Economic Zone, which is expected to be a thriving hub of trade and services in the Greater Mekong Subregion. BMM Asahi Tec plans to ...
Read more