APPS moving forward – AOT’s board has approved the hiring of 2S Consortium to operate the Advance Passenger Processing System (APPS), an online passenger-information exchange system, to improve customs and immigration services and shorten entry time at airports. The consortium consists of Somapa Information Technology and Samart Comtech. AOT will charge Bt35/passenger and expects to start this system on October 1, 2015, applied only to passengers passing through Suvarnabhumi. (Daily News, Bangkok Post, 26/03/15)
BEC plans to raise ad rate this year after no rate hike for the past three years. However, it depends on how intense the competition from digital TV is. (Kao Hoon, 26/03/15)
Comment: BEC is still the number 1 channel operator in thailand today in terms of ad rates, but digital tv is definitely going to be an issue for them with the increased competition
CENTEL expects Bt20bn revenues this year (from Bt18bn last year). 1Q15 earnings should be strong from high occupancy rate. The company is studying JVs in Myanmar and Sri Lanka. (Thun Hoon, 26/03/15)
Comment: Still is and forever will be a B grade, no wait C grade version of MINT
AAV’s net profit was Bt183mn in 2014, down 82% YoY, dragged down by weak operations in 1H14 from the political unrest. (Kao Hoon, 26/02/15)
Thai AirAsia will open new route Bangkok-Burirum on April 2, its eighth route into the northeast of Thailand. Thai AirAsia will then cover all major cities in the northeast. It expects a high load factor at more than 80% for this route. (Krungthep Thurakij, 26/02/15)
AJD operations turned around with Bt100mn profit in 2014 backed by revenue from sale of set-top boxes. The company announced a par split to Bt0.1/share (from Bt1.0/share) and expects revenue to double this year. (Kao Hoon, 26/02/15)
CBG will invest Bt400mn to expand capacity to serve more orders from new clients. The company will expand in ASEAN and targets export sales to hit 50% of total sales in 2018. In 2015, it expects revenue growth of 20% YoY. (Thun Hoon, 26/02/15)
Comment: The company believes that it can do very well in Cambodia/Myanmar/Laos with its single product. I have my doubts on the distribution capabilities but am curious to see what happens.
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.
Buys new hospital in Nakorn Pathom — BGH has announced the acquisition of Sanamchan Hospital, a 198-bed private hospital in Nakorn Pathom, plus its two hospitals. The investment cost is Bt3.66bnn (SET)
Comment: And the growth machine for BGH continues, still think it can comfortably go to THB 20/share, just wait for the day it does REITs
Central Group pins hope on mid-year sales bonanza – Four business units under the Central Group of Companies have come together to stimulate consumers’ purchasing power during the mid-year period and attract more tourists. Central Department Store Plc, Central shopping complexes, Robinson Department Store Plc and The 1 Card will allocate Bt400mn to launch the Greatest Grand Sale from June 6-July 15 at 53 shopping centers and department stores nationwide. (Bangkok Post, 29/05/14)
CCP expects new high performance in 2014, continuing from 2013, because political problems are easing. It expects more investment in the public sector and more new work. It maintains revenue growth target of 10% YoY and has backlog of Bt1.86bn. It is negotiating for a joint venture. (Khao Hoon, 29/05/14)
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.
Niche focus keeps Thai Rung Union Car rolling ahead of its competitors
Thai Rung Union Car Plc (TRU), a Thai-owned company established in 1967 and listed on the Stock Exchange of Thailand in 1994, is a leading automotive industry operator that offers fully integrated services from product design and development to production of various kinds of vehicles, including its own niche specialty vehicles, and after-sales service. Its customers are leading US and Japanese automotive, industrial machinery and motorcycle manufacturers. Managing director Sompong Phaoenchoke discusses the company’s strategy and outlook.
Managing director Sompong Phaoenchoke shows off the TR Transformer, for which the company sees good potential in provincial markets in Thailand.
What is your business model?
TRU has always focused on product design and development through the production of dies and jigs and the manufacturing of metal and plastic automotive parts, seats, and modification of multi-purpose and specialty vehicles. Continue reading Co Visit: TRU Plc