AAPICO Hitech Public Company Limited

Yeap Su Chuan, Chief Executive Officer of Aapico Hitech Public Company Limited, or AH, told the Hoons Vision news team that the group's factories were unaffected by the flooding situation and continue to run their production lines as normal. He noted that flooding in several areas may create additional demand for replacement parts from damaged vehicles, which represents an opportunity for the auto parts business. Although Thai vehicle production capacity has yet to return to the level of 2 to 4 million units per year, the company sees the growth of electric vehicles, or EVs, together with the government's push to increase the proportion of local production, or localization, as factors opening new opportunities for domestic parts makers. On overseas markets, exports remain at normal levels, with AH having a base of major customers spread across the United States, China and Malaysia, and producing and delivering parts for the Proton brand, which helps support its overseas revenue base. As for the operating outlook for 2026, Yeap expects revenue to improve slightly from the previous year. Although the overall economy and global situation remain uncertain, the company has a strong order backlog and therefore remains confident in its medium- to long-term growth.

The government is in discussions with the automotive industry to finalise the excise tax rate for electric vehicles, with a decision expected within September. A rate of around 30% may be levied on fully imported EVs, aimed at encouraging manufacturers to set up production bases in Thailand and expand the domestic supply chain. These details are part of a plan that the National Electric Vehicle Policy Committee, or EV Board, agreed on in principle last week, which proposes a three-tier excise tax on EVs: fully imported cars face the highest rate, cars produced in Thailand face the lowest rate, and cars assembled domestically but still relying on some imported parts face the middle rate. Dao Securities views this as positive for the Thai automotive industry and the automotive sector over the medium to long term, given the opportunity to expand the share of auto parts sales to EV makers that set up production bases in Thailand. Currently, the revenue share from EV parts remains low, with AH at around 5%, while SAT still has a very small share. For the automotive sector, the brokerage maintains an Underweight investment weighting, while for SAT it recommends a "hold" rating with a target price of 16.50 baht.

Mr. Yeap Su Chuan, Executive Chairman of Aapico Hitech Public Company Limited, or AH, said the government's increase in import taxes on electric vehicles is aimed at encouraging operators to set up production bases in Thailand, which will benefit domestic auto parts manufacturers. AH is ready to produce parts for EV cars immediately, because many key components such as body structures, wheels and seats remain similar to those of conventional combustion-engine cars. However, receiving orders from new car models takes at least 12 months before parts delivery can begin. For the outlook in the second half of 2026, the business in Thailand has received new product orders worth a total of about 100 million baht, similar to the business in Portugal, which has begun producing parts under new orders. Meanwhile, the car dealership business in Malaysia remains a key growth driver, supported by strong Proton sales from new EV models. Yuanta Securities (Thailand) Company Limited said the Electric Vehicle Policy Committee approved in principle a restructuring of the excise tax on electric vehicles, divided into three tiers based on the level of investment, production and use of local content in Thailand: the lowest tax rate for domestic manufacturers using a high proportion of Thai parts, a middle rate for importers who enter to test the market and have plans to produce in Thailand, and the highest rate for importers selling without plans to invest in the country. It views this as a positive factor for Thai auto parts makers including AH, SAT and STANLY over the medium to long term, and expects AH's operating results in the second half of 2026 to recover continuously both half-on-half and year-on-year, driven by its cost-control strategy for selling and administrative expenses, and expects orders from new car models to come in the third quarter of 2026. It therefore raised its 2026 full-year profit forecast by 13% to 841 million baht, up 14% year-on-year, and its 2027 forecast by 15% to 908 million baht, up 8% year-on-year. It also upgraded its recommendation to "Buy" and raised its 2027 base valuation from 16.80 baht to 19.20 baht.

AH reported total revenue up 1.7% year on year, even as revenue from its automotive parts business fell 4.7% on the slowdown in Thai vehicle production and competition in China. That was offset by its dealership business, which grew 16.8%, along with growth at its Portugal and Malaysia production bases. As a result, gross profit rose 17.4% and gross profit margin improved from 7.4% to 8.5%. Net profit rose to 195 million baht from 108 million baht a year earlier, a gain of 81% year on year, driven by better margins, a higher share of profit from joint ventures, and lower financial costs. For the first half of 2026, net profit stood at 510 million baht, up 23% year on year, even though revenue fell 2.2%, reflecting that this earnings recovery is driven more by margin than by revenue growth. The company expects 2026 revenue to be close to the prior year, while the third quarter of 2026 may slow slightly quarter on quarter because of roughly three weeks of holidays at its Portugal plant, before support kicks in from new parts that begin mass production in the second half of 2026. For 2027, growth drivers become clearer, led by a new axle expected to generate about 200 million baht in revenue, along with new orders and new products in Malaysia. Its joint venture in the United States is building a plant and is expected to start production late in 2028, with revenue becoming clear in 2029. The balance sheet can still support investment, with more than 2.5 billion baht in cash and net interest-bearing debt to equity of just 0.3 times. The Federation of Thai Industries has cut its target for Thai vehicle production in 2026 to 1.45 million units, while in the first half of 2026 production fell 1% year on year and exports fell 8.3%, though domestic sales rose 14.6% on strong growth in battery electric and hybrid vehicles. AH's overseas revenue has risen from just 21% in 2012 to about 50% in the first half of 2026. On valuation, the stock trades at a price-to-earnings ratio of 6.1 times, close to its five-year average at minus 0.5 standard deviations, while the price still lags the market by about 7.2% year to date, with an expected dividend yield of about 5.5% to 6% a year. Technically, the price has rebounded from support at the 100-day exponential moving average of 14.70 and is holding firmly above 15.00, forming a short-term double bottom, with a chance to hold above neckline resistance at 15.70 to 15.90. The next resistance is 16.80, with support at 15.00 and 14.70.

Asia Plus Securities' research unit says new US tariff measures under Section 301, one of the risks to Thai exports in the second half of the year, will slow exports because Thailand faces a 12.5% levy, higher than some ASEAN peers like the Philippines and Malaysia, potentially reducing competitiveness. Thailand also runs a growing surplus with the US, and markets must watch for surplus-production tariffs the US has yet to announce, which will pressure the Thai economy's export sector. Product groups hit by the 12.5% tariff include pet food, processed food, and beverages, covering stocks such as AAI, ITC, PLUS, TU, and COCOCO, as well as electronics, including HANA, DELTA, KCE, and CCET. Major Thai goods exempted from the 12.5% tariff are oil, gas, and fertiliser, which the US imports heavily, easing pressure on refinery and oil stocks like PTT, PTTEP, TOP, IRPC, and BCP, and goods already under Section 232, such as automobiles, steel, aluminium, and copper, which eases pressure on processed steel and steel pipe stocks like PAP, TMT, and SAM, and auto parts stocks like AH and SAT. The Commerce Ministry reported that Thai exports in June 2026 grew 20.8% year-on-year, above the market forecast of 15.2%, while imports rose 50.3%, above the 35.8% forecast, resulting in a trade deficit of 6.565 billion US dollars. Standout products included pet food, up 22.3%, expanding for a tenth straight month; rubber, up 12.5%, returning to growth for the first time in 14 months; and processed chicken, up 6.1%, expanding for a seventh consecutive month.

Four major technology and automotive companies from China are preparing to expand their investments in Thailand, totaling 70 billion baht within this year, focusing on the electric vehicle industry and AI and data center technology, according to a report by Asia Plus Securities. In the EV sector, Xiaomi Corporation is considering expanding its EV production base and establishing a research and development center in Thailand, while Changan Automobile is moving forward with expanding production capacity from 100,000 to 200,000 units per year by 2030, along with setting up a regional headquarters and an EV R&D center. In the AI and data center group, Innolight Technology is preparing to build a third factory in Saraburi province to expand production of optical modules, and Eoptolink Technology is preparing to expand production capacity at its factories in Chonburi and Rayong. Stocks expected to benefit include industrial estate groups such as Amata, WHA, Rojana, and Pin, automotive groups such as AAPICO Hitech, Somboon Advance Technology, and Stanley Electric, component groups such as Hana Microelectronics, Delta Electronics, KCE Electronics, and Stars Microelectronics, and energy groups such as Gulf Energy Development.