AAV expects 2016 net profit to be over Bt1bn driven by 16.9mn passengers and an 82% cabin factor. It expects to get five A320 planes this year, with a goal of 70 airplanes in 2020. It expects to open new routes in CLMV, beginning with Luang Prabang. (Thun Hoon, 09/02/16)
Comment: There is no real competition for AAV, I like to now saw Emirates control’s the mid-high end customers, AAV controls budget.
ABC plans to launch ABC Residence Sukhumvit 39, valued at Bt2.5bn. The selling prices will start at Bt170,000/sqm. It expects to do presales in March. (Khao Hoon, 09/02/16)
Comment: Will this condo be launched w/ solar power and IT Solutions?
APCO targets 2016 sales growth of 10% to achieve revenue of Bt450mn by focusing on providing BIM products to local customers. It is looking for a partner in Singapore to build MLM in Singapore, Malaysia, and Indonesia. (Khao Hoon, 09/02/16)
Comment: I hate MLM companies, there said I it
CCN expects 2016 net profit to mark a record high backed by the setup of 4G networks. It expects this to contribute 50% of total revenue in 2016 from last year’s 5%. It expects 2016 revenue to grow 20% aided by Bt70mn backlog. It expects to get a Bt200mn mega project which is expected to be concluded by 1Q16. (Thun Hoon, 09/02/16)
GPSC plans to operate 65MW hydroelectricity in Laos with startup in 2017; construction has reached 35% completion. (Thun Hoon, 09/02/16)
ASIMAR expects to bid for a Bt1bn ship building contract. It plans to increase capacity by set up a third floating dock. It expects 3Q15 earnings to be good aided by transfers. (Thun Hoon, 05/10/15)
BMCL expects growth in 3Q15 earnings backed by increasing passengers. It expects 300,000 passengers/day. It expects to show a net profit in 2016 after the MRT Purple Line begins contributing revenue in 4Q15. (Thun Hoon, 05/10/15)
Comment: The moment that BMCL can expand its lines from its existing ~20km to just even 30km then it’ll finally become a profitable company.
COLOR expects 2015 revenue to mark a record high thanks to high demand and lower oil price. It expects 5% growth in 2015 revenue. It plans to increase exports to comprise 20% from 18- 19% now. (Thun Hoon, 05/10/15)
CPALL expects 2H15 earnings to be better aided by a marketing campaign, recovery in purchasing power, and seasonality. (Khao Hoon, 05/10/15)
Comment: Again the story here is purely if and/or when they’ll sell their stake in MAKRO to the market.
AIT announced 2H14 dividend of Bt1.1/share (XD on April 21), after record-high net profit of Bt658.56 mn (+16.26%) in 2014 and revenue of Bt6.65bn. It has backlog of Bt1.487bn, part of which will be realized this year. (Khao Hoon, 23/02/15)
BGT plans to expand into ASEAN markets via agents or setting up joint ventures with locals, which it expects to finalize in 2Q15. It targets revenue growth of 10% with Bt48mn capex to add 10-15 branches in provincial areas. (Thun Hoon, 23/2/15)
Comment: BGT has suffered along with every other consumer related business in the past 2 years, perhaps more so because they have the single brand risk.
CHO will not participate in NGV auction if price is not adjusted. The company maintains target revenue growth of 10% this year supported by backlog of more than Bt600mn and introduction of new products. It has budgeted Bt200mn to expand its maintenance center. (Kao Hoon, 23/2/15)
Indonesia has a wonderful problem when compared to Thailand they can invest and invest and experience a huge growth in the automotive sector, similar to what Thailand has had in the past decade. Once their infrastructure is completed and on an acceptable level for automotive manufacturers to invest and for the automotive eco-system to exist there as it does in Thailand, then Thailand can worry, but that may be another…10 years away. So when I see that Indonesian sales are doing well I can actually spin this positively as the majority of car parts for Indonesian are manufactured in Thailand, so for now NYT, AH, STANLY, SAT can all relax.
Indonesian sales will total about 1.2 million in 2014, versus 1 million in Thailand, said Tim Zimmerman, the Singapore-based president of Southeast Asia operations for General Motors Co., the world’s second-biggest carmaker. Vehicle sales in Indonesia rose 6.6 percent in the first half, while they slumped 40 percent in Thailand, according to data compiled by Bloomberg.
So the automotive industry in Thailand is dying?
Well the largest automotive car maker in Europe, Volkswagen, has recently applied to set up its first plant in Thailnd under the government scheme that requires car makers to invest at least THB 6.5 bn and that annual production must reach 100,000 cars in the fourth year (not later than 2019) once operations commence.
The simple fact remains that Thailand has a domestic appetite for cars of 1 million cars per year, that could comfortably grow over the next decade to 2 million cars/year and despite all this political rubbish, it would be crazy for any automanufacturer to miss out on this market.
Following on from this the shipment of car parts for Thailand last year grew by +6% to USD 12 bn and is still expected to grow by another 10% this year.
Now in all of ASEAN, there were 4.4 million cars produced in 2013, Thailand represents just over 50% with 2.4 million cars manufactured last year
The Eco-Car Phase II attracted a helluva lot of interest, there were 10 car makers (5 existing ones) that applied for this and that equates to THB 139 bn worth of potential investments.
As of Feb ’14, the 5 existing eco car manufacturers produced 800,000 eco-cars, of which only 20,000 units were for domestic sale and the rest export, this second phase will result in an additional 500,000 vehicles manufactured in the next few years (because as with Volkwagens case, the BOI requires automakers to produce 100,000 units/year by the fourth year of operations)
So who benefits from all this?
Manufacturers: SAT, STANLY, TRU, AH
Others: IHL, NYT
Industrial real estate: TICON, WHA, HEMRAJ, AMATA, RJANA
I’m sure I’ve forgotten one or two others, as there are several other businesses that gain from the continued growth in automanufacturers ranging from petrochemical suppliers, plastic suppliers, utility providers and so forth. And again, the fact remains that Thailand has a large domestic demand for autos, thanks to the Japanese there is already a massive automotive cluster (from manufacturers to suppliers) that exist in Thailand today that car makers can plug into. I’m not worried about the automotive sector for Thailand for the next 5 years at all.
Ok slightly sensationalist headline, because Japanese firms are still heavily investing in here however at a slower growth rate and we’ve commented here before that Japanese automanufacturers are looking more closely towards Indonesia for the following reasons:
The perception that Indonesia is now politically less risky and cheaper than some neighbors is adding to the allure of the world’s fourth-most-populous nation, even as investment growth is set to cool before elections this year. The nation has overtaken China and India as the most promising country for Japanese companies for business development, according to a Japan Bank for International Cooperation survey.
“Indonesia’s appeal includes a sizable labor force and consumer market,” said Wellian Wiranto, an economist at Oversea-Chinese Banking Corp. who has worked at Singapore’s central bank and the International Monetary Fund. “Indonesia has its own share of political uncertainties ahead of elections, but they must look negligible compared to the drama playing out in the streets of Bangkok.”
The fact does remain that Thailand’s infrastructure is a helluva lot better than what Indonesia has today, if you really think traffic is awful here in Bangkok. Please head to Jakarta and Manila to see what bad traffic is, also the infrastructure connecting major cities throughout Thailand is still unparralled when compared to Indonesia hence why we still see headlines/articles like this
More and more Chinese vehicles are reaching overseas markets, however, and Thailand is likely to become a key destination in coming years for both exports and assembly plants. Already Sunlong claims to have the largest annual market share in sales of buses in Thailand, such as coaches fuelled by liquefied natural gas.
Last year, China’s largest carmaker, SAIC, announced a joint venture with Thailand’s CP Group to assemble cars in Thailand under the MG marque, the British brand sold to Chinese owners in 2005. Production is slated to start with 50,000 units this year.
Great Wall Motors, known for pickup trucks and sport utility vehicles (SUVs), was also looking to invest $300 million a plant in Rayong with annual capacity of 100,000 vehicles. However, last week it said it was putting its plans on hold because of concern about the country’s protracted political standoff.
Source: Bangkok Post
So all in all what does this mean for the listed companies here? Well we have SAT, AH, TRU and STANLY which are the main automanufacturers here, and what we suspect we’ll see over time….is well frankly the same as we’ve seen over the past 6-7 years, only because Thailand does still have the capability to export automobiles to its neighbouring countries, the cutely named CLMV nations which are all brand new emerging economies whose GDP numbers and GDP per capita, whatever statistic you look at, will only continue grow over the next 5-10 years.
Last month Toyota said that they would be investing more into Indonesia for certain models, this despite an awful infrastructure system, and now Malaysia is looking for more investments from the auto sector as well. So will Thailand see less investment going forward? What impact will this have on SAT, TRU, STANLY and IHL on their growth?
Malaysia will selectively seek foreign investments that bring advanced technology and offer customised incentives to attract companies, according to M Madani Sahari, chief executive officer of the Malaysia Automotive Institute, a unit of the trade ministry. Under the previous policy, the licenses only allowed for the manufacture of vehicles that had engines 1.8 litres or bigger, he said.
Source: The Nation
I spent a weekend in Jakarta recently, my first trip back there since ’97, and from what I saw, its a huge economy with massive potential but an incredibly long way to go infrastructure wise. With large investments likely over the next 5-10 years I can see the car market there growing much faster than Thailand and if shipping and logistics improves Thailand as a base for shipping to other countries may begin deteriorate. Which companies here may get hurt? STANLY comes to mind, but we haven’t looked at them for years.
The company, which usually imports the Vios compact sedan from Thailand, has spent 2.5 trillion rupiah (Bt6.7 billion) in initial capital on its expansion in Indonesia.
TMMIN president-director Masahiro Nonami said the persistently strong demand for cars in Indonesia, driven by its growing middle-class segment, had attracted his company to make the country a Vios production base.
Source: The Nation