Automotive

Industry Update
Wednesday March 25, 2015
Automotive
AUTO
Rec.: NEUTRAL
Continue recovering
Car production volume in February could grow 2%yoy, marking the second
month of growth in a row. Launches of new car models and excise tax
restructuring are local driving factors in 2015. Top picks are SAT and AH.
 Feb car production volume grows 2%yoy
Car production volume in February 2015 grew 2%yoy and 7.2%mom to
178,351, showing year-on-year (yoy) growth for the second month in a row
after shrinking continuously for 18 months since 2H13. Domestic sales
increased 7%mom to 63,948 while total exports increased 17%mom to
108,173, thanks to the export volume to Oceania (22% of total exports) and
North America and Europe (15% of total exports) that grew strongly
following the economic rebound. Overall, 2M15 production volume was
344,751, rising 2.6%yoy.
 FY2015 production volume to advance 12%yoy
There are numerous domestic positive factors for the automotive industry in
FY2015, e.g. the economic recovery, a motor show, launches of at least 10
new car models, and the excise tax restructuring effective in 2016 that will
influence consumers to accelerate their car purchase. In addition, the policy
rate cut of 0.25% is also positive sentiment for the sector since it means
higher installment payment ability of customers. Total car exports tend to
continue growing, thanks to the markets in Oceania, America, and Europe.
Overall, we estimate FY2015 car production volume at 2.1 million or the
growth of 11.7%yoy, 900,000 for domestic sale and 1.2 million for export.
 Top picks are SAT, AH
FY2015 normalized profit of the sector is projected at B4.2bn, increasing
20%yoy. We recommend NEUTRAL and select SAT(FV@B22) and
AH([email protected]) as top picks of the sector for their 15% and 16% upsides,
respectively. SAT would benefit most from launches of new models of pickup
and pickup passenger vehicle (PPV) of its major customers like Toyota and
Mitsubishi (59% of its total sales), while AH has the lowest valuation, with
P/BV ratio of only 0.77x and P/E ratio of 9.5x.
Key Data
FY: Closing Dec 31
Sales
Gross Profit
Net Profit
Normalized Profit
Gross Margin
PER (X)
PBV (X)
ROAA
ROAE
Source: ASP Research
FY12A
50,549
7,733
5,405
5,202
15.3%
9.54
1.92
12.2%
21.5%
FY13A
48,568
7,528
5,047
4,682
15.5%
10.22
1.97
10.7%
19.0%
FY14F
43,918
5,718
3,563
3,469
13.0%
14.48
1.62
7.5%
12.3%
English research reports are a rough translation of our Thai-language
research products. It is produced primarily with time efficiency in mind,
so that English-reading clients can see what the main recommendations
are from our Thai-language research team. Given that this is a rough-andready translation, Asia Plus Securities pcl cannot be held responsible for
translation inaccuracies.
FY15F
47,586
6,692
4,178
4,178
14.1%
12.35
1.50
8.5%
12.6%
FY16F
50,188
7,134
4,517
4,517
14.2%
11.42
1.38
8.9%
12.6%
Nuanpun Noiruchchukorn
License No.: 019994
[email protected]
Attavut Pukprayoon
Analyst Assistant
The Thai language research reports and information contained therein are compiled from
public data sources and our analysts' interviews with executives of listed companies.
They are presented for informational purposes only and not to be deemed as solicitations
to buy or sell any securities. Best attempts have been made to verify information from
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do not necessarily reflect the views of Asia Plus Securities.