Automotive - PDF by liuqingyan

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									                                                                                                                                                                                                Sector Update
                                                                                                                                                                                Ref No. AUTOMOTIVE-1001, January 24, 2011




  Automotive                                                                                 | Auto production, exports hit record high
                                                                                             We maintain a positive view on the automotive sector on rising production
Rating                                                 NEUTRAL
                                                                                             and exports that will result in strong earnings growth in 2010 after a 23%
Previous Rating                                                       NEUTRAL
                                                                                             drop in 2009. The Thailand Automotive Institute reported car production last
Index Closed                                                              400.70
                                                                                             year hit a record high of 64% YoY, and forecasts a continued strong 21% rise
Market Cap. (Bt mn)                                                   51,839.87
                                                                                             production this year.
% of SET Market Cap.                                                           0.62

                                                                                             2010 auto production hit record high.
Sector Benchmark Matrix - SBM                                                                The Thailand Automotive Institute reported that 137,403 vehicles were
                                                                                             manufactured in December 2010, an increase of 23% YoY, and 71,025 vehicles
                                           ROE
                                         280                                                 were exported, up 21% YoY. Institute data also showed 1.64mn vehicles were
                                         240
                                                                                             manufactured in the whole of 2010, a strong increase of 64% YoY, and 896,042
                                         200
                                         160                                                 vehicles were exported, up 67% YoY. Production and exports were the highest
                                         120                                                 levels in 50 years.
         P/BV                             80                                P/E

                                          40
                                           0                                                 Thai car production
                                                                                                U n it s                      T h a ila n d C a r P ro d u c t io n
                                                                                                2 0 0 ,0 0 0

                                                                                                1 6 0 ,0 0 0

                                                                                                1 2 0 ,0 0 0
             EPS growth                                         Div.Yield
                                                                                                 8 0 ,0 0 0
                           SET                         Automotive
                                                                                                 4 0 ,0 0 0

                                                                                                          0
SBM (Sector Benchmark Matrix) is a sector rating based on a                                                     Ja n   Fe b    Mar   A pr May      Ju n   Ju l A u g     Sep   Oc t Nov   Dec

standard SET benchmark correlation of 100%.                                                                    2008                  2009                  2010




                                                                                                                                                                      Source: Toyota & Thailand Automotive Institute
Sector P/E Band
  INDEX
 850
 800                                                                                P/E(x)
                                                                                             Production growth to continue in 2011.
 750
 700
 650
                                                                                     20.0
                                                                                             The Federation of Thai industries expects the auto market to surge by 9% to a new
                                                                                     18.0
 600
 550                                                                                 16.0    production record of 1.8mn units this year, while the Thailand Automotive Institute
 500                                                                                 14.0
 450
 400
                                                                                     12.0    upgraded its 2011 auto production target from 1.8mn units to 2mn units, or strong
 350                                                                                 10.0
 300                                                                                         growth of 21% YoY, and expects continuing growth over the next four years.
 250
 200
 150
                                                                                             Growth will be driven by planned capacity increases of new eco-car models for
 100
   50                                                                                        export by Suzuki, Honda, Toyota, Mitsubishi, and Nissan, and by Mazda for its B-
    0
    Dec-03    Dec-04   Dec-05   Dec-06     Dec-07   Dec-08   Dec-09   Dec-10      Dec-11
                                                                                             cars, by a combined 50% to 2.5mn units over the next four years (2011-2014
                                                                                             period), or a growth CAGR of 12%.
Thakol Banjongruck                                             thakol@ays.co.th
Registration No. 004927                                       Tel +66 2659 7000

                                                                                             STANLY remains our top pick.
                                                                                             Given the strong vehicle production and strong domestic demand outlook, we
                                                                                             estimate robust core earnings growth for our five covered automotive stocks this
                                                                                             year of a combined 14% YoY based on our 1.8mn unit auto production assumption
                                                                                             for 2011. We have a "Buy" rating on STANLY (fair value Bt241.0) as our top pick
                                                                                             due its ability to leverage its No. 1 market share position of 70% to ensure
                                                                                             continued growth. We have a “Trading” rating on SAT (fair value Bt30.0) and AH
                                                                                             (fair value Bt16.90)ใ




 This publication constitutes information disclosed to the public and believed to be reliable but its accuracy and completeness are not guaranteed. All opinions, suggestions, or projections
 are for informational purposes only and shall not be construed as an inducement for the sale or purchase of securities. Amendments to this publication may be made without prior notice.
 Investors are urged to exercise caution in making a decision to invest in any securities.
                                                                                                                                                                                                                 January 24, 2010
                                                                                                                                                                                                              Automotive Sector




    Thai car sales                                                                                        Thai car exports

      Units                                                                                                 Units                             Thailand Car Export
                                                                                                            120,000
       100,000
        90,000
        80,000
        70,000                                                                                               80,000
        60,000
        50,000
        40,000
                                                                                                             40,000
        30,000
        20,000
        10,000
             0                                                                                                    0
                     Jan Feb Mar Apr May Jun                   Jul Aug Sep Oct Nov Dec                                     Jan Feb Mar              Apr May        Jun       Jul         Aug Sep Oct Nov Dec

                                                                                                                        2008                 2009                        2010
                  2008              2009                      2010


                                              Source: Toyota & Thailand Automotive Institute                                                                  Source: Toyota & Thailand Automotive Institute


   Breakdown of vehicle production by type                                                                New Car Market in Thailand for 2011 and beyond
                                                                                                             Brand                            2011                        2012                            2013                  2014
                                                                                                             Isuzu          D-Max(RT50)                D-Max(RT50)-SUV
          Export Sales              Domestic Sales                     Production                                                                       to replace Mu-7
                  Passe                                                                                      Honda      Eco-car(2CV) /                 Jazz-Hybrid2            City
                                      Pick-                                                                             Civic (2HC)                    CR-V
                  nger                                               Pick-
                                      up &                                                                   Toyota     Prius-hybrid                   Vios/Yaris2/Eco-car2    Corola                            Hilux (IMV2)
                  Car,                                               up &
                                      PPV,                                            Others                            Corolla1                       Camry
                   20%                                               PPV,
                                      51%                                               2%                   Mitsubishi None                           Eco-car                 Triton
                                                  Other 11%          67%                                     Nissan     March(sedan) /                 New compact sedan
          Pick-
                                              Passe                           Passe                                     Qsana                          (to replace Tida Latio)
          up &
                                                                              nger                           Mazda      Mazda3 / BT50
          PPV,                                nger
                                              Car,                            Car,                           Ford       Ranger (T6) /     Focus / Everest
          80%                                                                                                           Escape1           (Escape discontinued)
                                                                               32%
                                               43%
                                                                                                             Chevrolet Aveo(T300) /
                                                                                                                        Colorado (GM1700)
                                                                                                             Suzuki                       Eco-car

                                                                                                             Note : 1 - minor change 2 - not confirmed

                                       Source: Toyota & Thailand Automotive Institute                                                                                         Source: SAT & PricewaterhouseCoopers

   Market share                                                                                           Thai car production & sales
                                                                                                                     Million units
                  AAT, 7%      Other, 7%                                                                         3.00
                                                                                                                                                                     CAGR 2010-2014 = 11%

                                                                                                                 2.50                                                                                                 2.50
                                                                                                                                                                                                       2.30
                                                                                                                                                                                     2.20
       MITZUBISHI, 12%                                        TOYOTA, 39%                                        2.00                               +21%          2.00
                                                                                                                                                                                                                   1.42
                                                                                                                                                1.65                                              1.27
                                                                                                                 1.50                 +65%                                        1.14
                                                                                                                                                            1.01
                                                                                                                                             0.90
                                                                                                                 1.00              1.00
                                                                                                                               0.54
     NISSAN, 10%                                                                                                                                                                                                   1.17
                                                                                                                 0.50                                                             0.97            1.06
                                                                                                                                             0.80           0.88
                            HONDA, 11%                    ISUZU, 14%                                                           0.55
                                                                                                                 0.00
                                                                                                                               2009          2010          2011E              2012E               2013E           2014E

                                                                                                                                                       Domestic          Export          Production


                                       Source: Toyota & Thailand Automotive Institute                                                                                         Source: SAT & PricewaterhouseCoopers




Automotive           rating      Fair Value                              Net Profit                       EPS Growth (%)                                P/E (x)                                                P/BV (x)
                                 2011 (Bt)                  09           10E        11E             09        10E     11E                      09          10E                    11E                  09         10E             11E
AH                  Trading            16.90              -109           364        434           n.m.       n.m.      19                    n.m.         12.5                    10.5                1.0          1.1             1.0
IRC                   Buy              15.50               261           287        309             (6)        10        8                   10.2           9.3                    8.6                1.7          1.5             1.3
SAT                 Trading            30.00               314           796        925           (50)        123      16                    27.2         12.2                    10.5                3.0          2.5             2.2
STANLY                Buy            241.00                957         1,471     1,679            (14)         54      14                    15.3           9.9                    8.7                2.2          2.0             1.7
TSC                   Sell              9.30               148           199        220           (23)         35      11                    21.3         15.8                    14.3                2.1          2.1             1.9
Total/ Average                                           1,571         3,116     3,567            (23)         98      14                    18.5         11.9                    10.5                2.0          1.8             1.6




                              Ayudhya Securities Public Company Limited               550 Bank of Ayudhya Building, Ploenchit Office, 5th floor, Ploenchit Road, Pathumwan, Bangkok 10330, Thailand
                                                                                                                                                               Tel +66 2659 7000 Fax +66 2646 1103
Ayudhya Securities Public Company Limited

 Headquarters
 550 Bank of Ayudhya Building, Ploenchit Office, 5th Floor
 Ploenchit Road, Lumpini, Pathumwan, Bangkok 10330
 Tel: 0-2659-7000 Fax: 0-2646-1111
 Internet Trading: 0-2659-7777

 Branches
 Emporium                                                      Chonburi
 662 Emporium Tower, Fl. 10, Sukhumvit 24 Road                 64/17 Sukhumvit Road, Bang Plasoi, Amphoe Muang,
 Klongton, Bangkok 10110                                       Chonburi 20000
 Tel: 0-2695-4500 Fax: 0-2695-4599                             Tel: 0-3879-0430 Fax: 0-3879-0425
 Central Bangna                                                Nakhon Pathom
 589/151 Central City Tower 1 Office, Fl. 27                   67/1 Ratchadamnoen Road, Phra Pathom Jaedee District,
 Bangna-Trad Road, Bangna, Bangkok 10260                       Amphoe Muang, Nakhon Pathom 73000
 Tel: 0-2763-2000 Fax: 0-2399-1448                             Tel: 0-3427-5500-7 Fax: 0-3421-8989
 Rama II                                                       Suphanburi
 111/917-919 Rama II Road, Smaedum,                            249/171-172 Moo 5 Ta Rahad District,
 Bangkhuntien, Bangkok 10150                                   Amphoe Muang, Suphanburi, 72000
 Tel: 0-2895-9575 Fax: 0-2895-9557                             Tel: 0-3550-1234 Fax: 0-3552-2449
                                                               Nakhon Ratchasima
                                                               168 Chomphon Road, Tambol Nai Muang,
                                                               Amphur Muang Nakhon Ratchasima,
                                                               Nakhon Ratchasima 30000
                                                               Tel: 0-4425-1211-4 Fax: 0-4425-1215


 Analyst Team         Name                             Sector Coverage                                E-mail
 Central line:        Kasamapon Hamnilrat              Hotel, Steel                                   kasamapon@ays.co.th
 66.2659.7000         Sittidath Prasertrungruang       Electronics, Transportation, Agribusiness      sittidath@ays.co.th
 Fax : 66.2646.1103   Chatree Srismaicharoen           Property, Contractor, Construction Materials   chatree@ays.co.th
                      Charnvut Taecha-amorntanakij     Energy, Petrochemical                          charnvut@ays.co.th
                      Thanat Rungsrithananon           Banking, Finance & Securities, Commerce        thanat@ays.co.th
                      Thakol Banjongruck               Automotive, Healthcare, ICT                    thakol@ays.co.th
                      Adisak Phupiphathirungul         Strategy                                       adisak@ays.co.th
                      Wanchai Bunprasert               Technical                                      wanchai@ays.co.th




     Recommendations
     Buy              - Stocks with strong fundamentals and an expected total return of more than 10% over the next year.
     Hold             - Stocks with strong fundamentals and an expected total return of 5-10% over the next year.
     Sell             - Stocks that are overvalued or that have weak fundamentals.
     Trading          - Stocks with weak fundamentals but that have a story for trading.




                                                                                                      www.ays.co.th
                                                                    Corporate Governance Report of Thai Listed Companies 2009
                                                                                                                  Thai Institute of Director (IOD)




        ACL       ADVANC        ASIMAR        BAFS          BANPU            BAY         BCP          BECL          BKI            BLS
        CPN         DRT          EGCO        ERAWAN          GBX              GC       GSTEEL        HEMRAJ         ICC            IRP
       IRPC        KBANK         KEST           KK            KSL            KTB        NCH            NKI          PTT           PTTAR
      PTTCH        PTTEP        RATCH        SAMART         SAMTEL           SAT          SC           SCB          SCC            SCIB
      SE-ED         SIM           SIS          SNC            SSI           THCOM       THRE          TIPCO        TISCO           TMB
        TOP         TTA




     ACAP           AHC          AKR          AMATA          AOT              AP        ASK           ASP          AYUD           BBL
      BEC           BGH           BH           BIGC         BMCL            BROOK       BWG          CCET         CENTEL         CGS
     CIMBT            CK         CM             CNS         CPALL            CPF        CSC           CSL          DELTA        EASTW
       ECL            EE         EIC         GENCO          GFPT              GL       GLOW        GRAMMY          HANA         HMPRO
      IFEC          INET        KASET           KCE          KDH              KGI       KTC          KWC            L&E         LANNA
        LH           LPN         LST            LVT         MACO            MAKRO       MBK          MCOT          MFEC         MINOR
      MINT           MK        MODERN          MSC           NMG             NWR        OCC          OGC           OISHI          PF
       PG         PHATRA        POST         PRANDA           PS            PSAAP       PSL         PYLON           QH           RASA
       RCI           RCL       ROBINS         ROJNA           RS              S&J       S&P         SAMCO         SCSMG          SHIN
     SICCO         SIMAT       SINGER           SIRI        SITHAI           SMK       SPALI         SPSU           SSC          SSEC
       SSF        STANLY        STEC          STEEL          STPI           SUSCO        SVI         SWC          SYNTEC        TASCO
     TCAP           TCP           TF            TFD          THAI             TIC        TIP           TK          TNITY          TNL
      TPC           TRC          TRU           TRUE          TSTE            TSTH       TVO           TYM           UMI          UMS
       UP          UPOIC          UV            VNT        WACOAL           WAVE       YUASA        ZMICO




        AFC          AH           AIT         APRINT        APURE            ASIA      BAT-3K         BGT          BLAND         BLISS
      BROCK        BSBM           CCP          CHUO          CMR             CPL        CTW          DCC            DM           DSGT
       DTAC        EASON         EPCO         ESTAR           ETG            FNS       FOCUS         GFM            GYT           IHL
       ILINK         ITD          JCT         JUTHA            KH            KWH        KYE           LEE           LRH         MAJOR
       MBAX        METRO          MILL          NEP         NIPPON           OHTL       PICO           PL           PLE           PPM
        PRG         PRIN          PRO         Q-CON          ROCK           SCCC        SCP         SEAFCO          SFP         SHANG
       SMIT        SPACK         SSSC           SST           SVH           TAPAC       TCB           TCJ          THANI        TICON
        TIW         TKS          TLUXE          TMT          TNDT            TNH        TPP           TUF          TWFP          UBIS
        UEC         UNIQ          UPF            UT           UTP           WORK




               Score Range                                    Number of Logos                                      Description
                  90-100                                                                                            Excellent
                   80-89                                                                                           Very Good
                   70-79                                                                                              Good
                   60-69                                                                                           Satisfactory
                   50-59                                                                                              Pass
                 Below 50                                               -                                                -

Disclaimer
The disclosure of the survey result of the Thai Institute of Directors Association (IOD) regarding corporate governance is made pursuant to
the policy of the Office of the Securities and Exchange Commission. The survey of the IOD is based on the information of a company listed
on the Stock Exchange of Thailand, and the Market of Alternative Investment disclosed to the public and able to be accessed by a general
public investor. The result, therefore, is from the perspective of a third party. It is not an evaluation of operation and is not based on inside
information.

The survey result is as of the date appearing in the Corporate Governance Report of Thai Listed Companies. As a result, the survey result
may be changed after that date. Ayudhya Securities Public Company Limited does not confirm nor certify the accuracy of such survey
result.

								
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