AAPICO Hitech Q2 2025 presentation: Revenue grows amid industry headwinds

Introduction & Market Context

AAPICO Hitech PCL (SET:AH) reported mixed second quarter 2025 results on August 29, showing revenue growth despite challenging conditions in the automotive industry across its key markets. The Thailand-based automotive parts manufacturer, which has expanded its global footprint to include 52 subsidiaries across multiple countries, faces headwinds from declining vehicle production volumes in both domestic and export markets.

Thailand’s automotive industry outlook remains constrained, with the Federation of Thai Industries (FTI) targeting total car production volume of 1.45 million units for 2025. The first half of the year saw production volumes decrease by 4.8% year-over-year, with both domestic sales and exports declining.

As shown in the following geographic sales breakdown, AAPICO maintains significant exposure to the Thai market while diversifying internationally:

Quarterly Performance Highlights

AAPICO reported Q2 2025 total revenue of 6,629.5 million baht, representing a 2.1% increase compared to the same period last year. However, gross profit declined 13.5% to 481.0 million baht, resulting in a compressed gross profit margin of 7.4%. Despite this margin pressure, the company achieved a 5.3% increase in net profit to 108.1 million baht, with net profit margin holding at 1.6%.

The quarterly results reflect the company’s focus on operational efficiency and cost control, with SG&A expenses decreasing 6.5% year-over-year:

For the first half of 2025, AAPICO’s performance showed broader challenges, with total revenue declining 4.4% to 13,458.6 million baht compared to 1H 2024. Gross profit fell 9.3% to 1,146.6 million baht, while net profit decreased 1.9% to 414.3 million baht. The company maintained a net profit margin of 3.1% for the six-month period:

AAPICO’s financial position remains strong, with the company highlighting its improved balance sheet. The debt-to-equity ratio has steadily improved from 1.1 in 2022 to just 0.5 in Q2 2025, while maintaining a substantial cash position of 5,625 million baht:

Strategic Initiatives

AAPICO continues to pursue its global expansion strategy, with operations currently spanning Thailand, Malaysia, Portugal, China, the United Kingdom, and the United States. The company identified Japan as its next target market for business expansion:

The company’s historical development shows a clear progression from its initial growth phase following its 2002 listing to its current focus on globalization and sustainability:

A key element of AAPICO’s forward strategy is its positioning for the electric vehicle transition. The company emphasized that 95% of its current parts portfolio is applicable to EVs, providing resilience as the industry evolves. AAPICO projects that in the long term, the global automotive industry will shift to approximately 35% battery electric vehicles (BEVs), 28% hybrids, and 37% internal combustion engines (ICEs):

The company already produces numerous components for EVs and hybrids, including battery case frames, control converter covers, and various structural elements:

Forward-Looking Statements

AAPICO’s management expects 2025 revenue to remain close to 2024 levels, with core profit margins projected to improve compared to the previous year. The company acknowledged the weak economic conditions both globally and in Thailand but emphasized its active pursuit of new opportunities.

The automotive parts manufacturer highlighted its stable EV revenue, which currently represents approximately 5% of its automotive parts manufacturing segment, with ongoing new orders in the pipeline. Management also pointed to the company’s strong financial foundation, with over 2,200 million baht in cash and fixed deposits supporting its global expansion strategy.

AAPICO’s long-term customer relationships provide stability, with committed orders extending 5 years for cars and 10-12 years for pickup trucks from major OEMs including Isuzu, Ford, Toyota, Honda, and emerging EV manufacturers like BYD.

Despite current industry headwinds, AAPICO appears well-positioned with its diversified geographic presence, strong balance sheet, and strategic alignment with the automotive industry’s transition toward electrification.

Full presentation:

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