On Friday, shares of AAPICO Hitech PCL (AH), a leading automotive industrial firm, rose 14.59 per cent to 10.60 baht per share, hitting its price ceiling.
The jump in share price was the highest in the past six months but the prior closing price of 9.25 baht at 0.44 times of the Price to Book Value (P/BV) was low from three years of bad performance.
Yeap Swee Chuan, AAPICO president, revealed this week that the company’s outlook for the second half of 2020 is expected to improve with the utilization rate rebounding back to 80 per cent of the first quarter.
The sales outlook for 2020 is estimated at 15 billion baht, declining from 2019’s 19.4 billion baht. The revenue in the first half already amounted to more than 7.2 billion baht.
Yeap Swee Chuan said that the overseas production bases are about to recover especially in China with the relaxation of lockdown measures.
“Although the industry as a whole may not meet the target, there are no plans for a capital increase at all” the president added.
The rise in AH shares poses some curiosities as analysts had predicted that car manufacturing may only see a gradual chance to recover with the main concern rising from the second wave of the COVID-19 pandemic.
Earlier, The Federation of Thai Industries (FTI) forecasted that the total production of cars in 2020 would at around 1.4 million units, 700,000 for the domestic market, and another 700,000 for the export market.
So far, the first half of 2020 has seen the production of 600,000 units and it is expected to increase another 800,000 units to meet the target.
300,000 people are still facing the prospect of job losses if the domestic and global demand continues to stay low.
At present, the Thai automobile industry employs around 850,000 people and contributes roughly 10 per cent of the country’s GDP.
Analysts from Maybank Kim Eng and Yuanta Securities said that AH would gain profit in the second half of 2020 but the sector is still looking at annual losses.