Financial Management Term Paper Essay

Company Profile AAPICO HITECH PUBLIC COMPANY LIMITED (“AH”) AAPICO Hitech PLC and its subsidiaries operate in 3 countries: Thailand, Malaysia and China where the main focus is the manufacture of automotive parts. The operation can be divided into 5 major sectors: OEM: manufacture of OEM auto parts, dealers: automobile sales and services, jigs: design, manufacture and installation of assembly jigs, dies: design and manufacture of dies, car navigation (Powermap) sales and services.

In terms of sales, the main contribution to the Company came from the manufacture of OEM auto parts which accounted for 66%, primarily from the Chassis Frame operation.

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Sales from the dealership business contributed to 27%i. Customers: Auto Alliance Thailand, General Motors, Honda, Isuzu, Mazda, Mitsubishi Motors, Nissan, Toyota, Yamaha, BMW, Chrysler, Hino, Hyundai, Land Rover, Mercedes Benz, Proton, Suzuki, Volvo, etc. Competitors: Thai Denso Group, Thai Stanley Electric PCL, Interhides Financial Information Sales Net income (loss) Total assets Stock price Y2011 10,355,659,233 (391,970,291) 11,521,206,298 10.

20 Y2010 11,344,221,100 394,186,285 11,474,181,598 16. 30 Y2009 7,114,457,899 (116,328,468) 9,545,463,421 8. 55ii SOMBOON ADVANCE TECHNOLOGY PUBLIC COMPANY LIMITED (“SAT”) SAT and its subsidiaries (located in the same area) focus on manufacturing automobile parts.

The Company target groups are Original Equipment Manufacturers (OEM) for long term contracts, and Replacement Equipment Manufacturers (REM). SAT manufactures parts of motor vehicle industry such as passenger car, pick-up car, trucks and agricultural parts industry. The Company products consist of Axle shaft (31% of total sales), Leaf Spring (12%), Disc& Drum Brake (9%),

Stabilizer Bar, Coil Spring, Exhaust Manifold, Fly wheel& Comp, Agricultural engine parts, etc. iii Customers: Mitsubishi Motors, Toyota Motors, Isuzu Motors, Kubota, AAT, Honda Automobile, Thai Honda Manufacturing, Auto Alliance Thailand, Mitsubishi Motors Corporation (Japan), Hino Motors, etc. Competitors: Automotive Products Import and Export Center (APEC), Dana Spicer, Sammitr Autopart, Kobelco, Financial Information Sales Net income Total assets Stock price Y2011 6,420,730,044 408,163,980 8,830,964,063 13. 2 Y2010 6,263,137,203 759,149,609 8,077,170,448 29. 25 Y2009 4,295,429,812 314,438,503 6,191,911,325 21ii

1|Page INTERHIDES PUBLIC COMPANY LIMITED (“IHL”) IHL is a manufacturer and distributor of car seat leather coverings by using cow or buffalo rawhides. All processes and services which are cut parts, trim cover, steering wheels and gear knobs, finishing leather, finishing service, tannery service, and other product services, are provided according to customer’s demand. However, around 80% of company income come from operations of cut parts and trim cover. The main customers are domestic-production vehicle producers, which manufacture domestic-used and exported vehicles.

iv Customers: Competitors: Toyota, Honda, Nissan, Ford, Mitsubishi, Isuzu, Mazda, Subaru, and other 2nd Tier OEM Asia Fiber PLC, Chai Watana Tannery Group Financial Information Sales Net income (loss) Total assets Stock price Y2011 1,552,955,134 148,415,675 2,145,710,115 6. 45 Y2010 1,822,886,907 272,895,882 1,872,503,398 11. 10 Y2009 1,313,329,510 109,063,558 1,664,848,498 5. 40ii T. KRUNGTHAI INDUSTRIES PUBLIC COMPANY LIMITED (“TKT”) TKT engaged in the production and service of plastic parts, which can be divided into two sectors, injection molding, and mold production and repair.

Mold production and repair also includes mold designing, making, painting, printing, and sub assembly. TKT’s main customers are in automotive industry which approximates 60% of total sales. v Customers: Competitors: Toyota, Nissan, Ford, General Motors SriThai Miyagawa, Daikyo Nishikawa (Thailand), Toyoda Gosei, Yarnpund PCL, Hi-Q Plas, Auto Interior products (Summit Group), Thai Mitsuwavi Financial Information Sales Net income (loss) Total assets Stock price Y2011 1,274,619,115 (14,846,380) 1,018,089,200 1. 80 Y2010 1,230,442,827 40,644,370 948,514,990 2.

04 Y2009 863,515,528 24,263,563 711,274,252 1. 65ii 2|Page Economic Analysis and Industry Outlook Thailand is maintaining its position as the “Detroit of Asia”. The automotive industry is a priority sector in Thailand which has been growing steadily over the past several years and still seems to continue to prosper. The market segment that is taking the most out of this business belongs to the small car industry. Thai economy was affected by natural disaster in 2011. There was severe earthquake in Japan on March 11, 2011 that triggered huge tsunami in the country.

The overall damage in Japan globally affected to world economic, especially for the automotive industry which Japan has many famous car brands: Toyota, Honda, Mitsubishi, Mazda, Nissan, etc. and is considered as one of the most powerful countries in the automotive market. Accompanied to the great tsunami, in Thailand itself, there was the worst flooding in October 2011 that several industrial parks in the middle of Thailand such as Rojana, Hitech, Saharat Nakorn, Bangkradi had been impacted. Many factories, including manufacturers in the automotive industry, had to shut down and ceased their operation until December 2012 or later.

Such mentioned disaster happened in Japan and Thailand had substantially impacted automotive industry as Thailand is considered as a manufacturing hub that some parts were supplied by suppliers in Japan. It shocked supply chain in this industry and caused to the essential decrease in automotive parts production, assembly capacity and finally impacted to the revenue and GDP. Materials delivery from Japan had been delayed and caused the delay in production. Finished products were flooded, damaged and had been disposed of during that period which stocks were running out.

In addition to the production and sale impact, there was also the long time taking for recovery stage of factories that were damaged from the earthquake and flooding and huge investment in the capital expenditure. Positive effects apart from the mentioned negative ones, the private sector launched strong marketing strategies and introduced a large number of new vehicles. The government, on the other hand, launched assistance measures and put more focus on the First Car Buyer Programmevii. According to the policy, car buyers eligible for tax refunds must be at least 21 years old and must hold ownership of the cars for at least five years.

The vehicle must not be worth more than 1 million baht, with engine capacity not exceeding 1,500 cc for passenger cars and no limit on engine size for pickup trucks. Also the cars must be manufactured in Thailand, excluding those produced with imported used parts. From September 16, 2011, when the scheme was started, until late November 2012, 581,344 vehicles have submitted requests for the excise tax rebate. Accordingly, the government expects that by December 31, when the scheme is expected to expire, the number of requests will surpass 600,000 unitsviii.

This positive government policy has made Thailand to be the number one car seller in the ASEAN and soon ranked of the world’s top 10 auto producersix. 3|Page Also, the growth of Thai automotive industry is impacted by the introduction of ECO-Cars. Since higher fuel prices and concerns over global warming have pooled attention on the auto industry that either rely less on traditional fossil fuels or use renewable sources of less expensive energy, driving an eco-car is one of the options people are taking into consideration.

Eco car is an idea conceived in 2007 to reduce energy consumption, preserve the environment and lessen dependence on imported oil. Eco car parameters are also in line with the growing consumer demand for safer, more fuel efficient and environmentally friendly modes of transportation, without sacrificing in the areas of comfort and safety. Not just only the environment that eco-cars save, they help save money on gas as well. The country’s Eco Car program is a success.

Mitsubishi is spending 16 billion baht ($535 million) to build its new Global Small Concept that’s due to roll out in 2012 (from a third factory in Laem Chabang, Chonburi), Honda’s Brio is launching in Mar 2011, while Nissan’s Thai made March is selling very well. Outside of the Eco Car, Ford `is building a new plant for its new Focus and GM has a diesel engine plant that will bear fruit. The Board of Investment (BOI) launched incentives to promote the manufacture of energy saving eco-cars in Thailand back in 2009. So far, there are five BOI-promoted companies of eco-car

manufacturing. Nissan was the first, introducing its March model. Today it competes for Thai market share with the Honda Brio, Suzuki Swift and Mitsubishi Mirage. Toyota plans to launch eco-cars in 2013. Financial Ratio Analysis (See all financial ratios of each company, time series and cross-sectional in the Appendix 1) Liquidity Ratios: Liquidity ratios of AH, which were the worst among the 4 companies, indicated uncertainty of the firm’s ability to pay its current liabilities when they became due even though AH’s liquidity ratios improved over 3 years.

Similar to AH, both current ratio and quick ratio of IHL were poor comparing to the industry average but the gap between current ratio and quick ratio was broader compared to AH. Hence, it implied that IHL held significant inventory balance which dramatically worsen its quick ratio compared to the others. SAT had the highest current ratio and quick ratio which improved over 3 years. Note that SAT had high ending inventory balance in 2010 which caused fluctuation in its quick ratio. Both current ratio and quick ratio of TKT worsen over 3 years.

Even though the current ratio of TKT is below the industry average, its quick ratio is above which implied that TKT held lowest level of ending inventory compared to the others. TKT also has uncertainty of the firm’s ability to pay its short term debt when they became due. 4|Page Asset Management Ratios: Inventory turnover of AH is the best, followed by SAT and TKT respectively. All 3 companies’ speed of converting inventory to cash is faster than the industry average. In contrast, figure of IHL implied the worst efficiency of inventory turnover.

In general, inventory turnover ratio increased from 2009 to 2010 and significantly dropped in 2011 for all 4 companies. Besides, AH also had better average collection period comparing to the industry average. On the contrary, the average collection period of IHL is the shortest one even though its ability to convert inventory into cash is the worst among 4 companies. Both SAT and TKT’s ratios were worse than the industry average collection period. In overall, all 4 companies seem to improve their average collection period over 3 years. TKT had the

highest efficiency to generate sales based on its assets which was improved over 3 years whereas the assets turnover ratio of AH fluctuated over 3 years and ended up similar to the average. On the other hand, figures for IHL and SAT dropped over 3 years and were below the industry average. SAT’s assets management had the worst performance which was almost double compared to the industry leader, TKT. Profitability ratios: In 2011, AH had poor performance on profitability compared to the industry average because of flooding crisis caused several losses occurred.

Only gross profit margin was positive but it was still lower than the industry average. Looking at its gross profit results, they got higher from time to time. Operating profit and net profit margin were negative which meant that the gross profit could not cover all expenses in 2011 but it could cover those expenses in 2010. Also, AH did not use asset and equity efficient enough as we could see from fluctuating of ROA and ROE through time and got negative result in 2011. The firm basic earning power was negative and much lower than average. IHL did very well on profitability and were the top rank in the industry.

The firm got 22. 2% of gross profit margin, which was greater than 14. 1% of industry average. Expenses of IHL were approximately constant, thus operating profit margin and net profit margin were in the same trend as industry average through time. Also, ROA and ROE of the firm fluctuated through time and 4 times higher than industry average in 2011. IHL had strong basic earning power which meant that IHL had an ability to generate earning better than other firms in the same industry. SAT performed better than industry average but still lower than IHL.

Compared to the company itself, gross profit margin, operating profit margin, net profit margin, ROA, and ROE went up in 2010 but dramatically dropped in 2011. This was due to Tsunami in Japan and flooding in Thailand. However, the company profitability was still higher 5|Page than industry average. ROA and ROE of SAT were good due to strong net profit margin. Basic earning power of SAT also fluctuated from time to time but ended up better than industry average. TKT performance was all poor over the past 3 years and lower than the industry average. Gross profit margin was 11.

7% but operating profit margin was 0% in 2011 and net profit margin dropped dramatically. This meant that TKT gross profit could only cover operating expenses. From 2009-2011, gross profit margin, operating profit margin, net profit margin fluctuated the same as industry trend. The company had much lower ROA and ROE than industry due to a loss in 2011. Basic earning power of TKT was 0% due to small amount of EBIT and large amount of total assets. Leverage or Debt Ratios: All of debt ratios, TIE, D/E, debt ratios, and equity multiplier of AH were the worst comparing to itself and the industry average.

Increasing degree of indebtedness and worse ability to pay interest and fixed payment obligations could be caused for alarm to the investors. IHL’s indebtedness increased over the 2009-2011 and was above the industry average. However, when looking at the TIE and D/E ratios, IHL’s ability to meet interest and loan repayment were improved from 2009 through increased in revenue although 2011 was an off year. This could be compensated for its increased degree of indebtedness. Debt ratio, TIE, and equity multiplier of SAT were better than the industry average.

Although the D/E ratios were the worse one, SAT could still meet interest and fixed payment obligations from its improving income. Equity multiplier, debt and D/E ratios of TKT were considered as good, comparing to the industry average. However, TKT might face problem to pay interest and loan principal as TIE ratio was negative in 2011. Moreover, TKT’s indebtedness increased and had higher financial leverage over years which could be caused for alarm. Market Ratios: AH’s EPS considered as poor both to the industry average and itself because AH had net loss due to the flood crisis in 2011.

P/E and M/B ratios of AH were the worst among 4 companies. In 2009 and 2011, P/E ratios were in the negative figures due to net loss. Poor M/B ratios of AH clearly shown that investors were not seeing AH to have favorable performance and was willing to pay little more than book value for the AH’s shares. However, AH’s book value per share was considered as good and above the industry average. IHL’s performance was still in the upraising trend even though the EPS in 2010 was less than the industry average. In 2011, IHL could maintain its positive performance while AH and TKT shown negative figures.

P/E and M/B ratios of IHL were above the average. Although, in 2010, the P/E ratio slightly dropped, that period seemed to 6|Page reflect a phase of adjustment and recovery from the company’s growth in fixed assets. In 2010, M/B ratio was significantly increased due to sharply raising in revenue growth. Thus, the stock price was relatively high as investor expected to earn high returns. Book value per share ratios was considered as Poor competed with the industry average. Moreover, the stock prices were almost triple price of the book value per share which is too overvaluation.

SAT had the best and highest EPS over 3 consecutive years. Especially in 2010, SAT had exceptionally high EPS according to its outperformed. Although P/E ratios of SAT were declining over years, investors still have great confidence and optimistic about the firm’s future performance than other companies. However, M/B ratios of SAT were poor as SAT is on the phrase of expanding its business and significantly purchasing of fixed assets but the revenue was not increased yet. SAT book value per share ratios were all good and above the industry average.

However, comparing to SAT stock price, in 2011 the stock price was slightly overvaluation (attract investors to buy the stock) while in 20092010 were tremendously overvaluation. TKT EPSs were poor comparing to other 3 companies. The firm only generated very low earnings to shareholders. P/E and M/B ratios of TKT were considered as poor when comparing to the industry average. Although in 2011 the company had net loss, TKT stock price and M/B ratio were not dropped much as investors still had some confidence to the future performance.

Though TKT’s BVPS ratios were less than the industry average but TKT stock prices were not differ much from the BVPS ratio, unlike IHL which had low BVPS but high stock price. Investors may have less confidence in the company than other firms. Dupont ratios: For Dupont ratios, IHL and AH had the best and worst performance, respectively. Financial multipliers were not significantly affected ROE due to small variation among four companies. Therefore, ROA and ROE were in the same trend. IHL did very well on profit margin and financial leverage but asset use efficiency is lower than industry average.

TKT posted 1. 26 of asset turnover which was the best in the industry which might from the size of TKT that it was very small compared to others. SAT got the lowest financial leverage but the overall result still in the second rank. For time series, profit margin and total asset turnover of all firms fluctuated due to natural disaster in 2011. However, financial multiplier of AH, IHL, and TKT rose over three years except SAT that was due to the issuance of share capital in 2010. 7|Page Cash flow analysis

Cross-sectional 2011-2010: AH was severely flooded, thus it had a huge amount of net loss but its operating cash inflow increased from 2010; however, IHL, SAT and TKT had decrease effects. For investing activities, SAT invested for new product line and new factory by using huge amount of money in 2011. Others had invested with the smaller amount. AH and SAT had decrease in cash provided from financing activities from less new long-term loans and higher payment of dividend, respectively. For IHL and TKT, they increased from granting more loans for using in operations.

Cross-sectional 2010-2009: In 2010, SAT had the most increase in operating cash inflow. IHL had slightly increase but AH and TKT decreased. AH, IHL, SAT and TKT invested a huge amount of money for its production expansion in year 2010 and caused to cash inflow from financing activities from new loans, except SAT who got money from issuance of share capital during 2010 to support expansion of businesses. AH: Cash balance decreased by Baht 43 million (“MB”) from 2010 which increased by 62 MB from 2009.

Although AH had net loss which mainly occurred from flooding effects in 2011, there was slight increase in cash provided from operating activities of 44 MB because most of flooding effects were non-cash items. However, for 2010, AH had a huge amount of net income; however, cash inflow from operating activities decreased by 104 MB mainly from the net changes of operating assets and liabilities. Cash used in investing activities of 2011 decreased by 536 MB from the decrease in purchasing of fixed assets which was in line with the decrease in cash provided from financing activities of 757 MB from smaller amount of new long-term loans.

However, cash outflow from investing activities in 2010 essentially increased by 1,124 MB from investment in machineries and equipment due to expansion in its production. Also, cash provided from financing activities increased accordingly by granting long-term loans and dividend payment. IHL: In 2011, cash balance increased from 2010 by 3 MB but in 2010, it decreased from 2009 by 7 MB. Cash provided by operating activities of 2011 decreased from 2010 by 130 MB which is mainly from the decrease in net profit. However, in 2010, there was only small change from 2009.

Cash used in investing activities slightly decreased from 2010 by 13 MB in 2011 but significantly increased by 185 MB in 2010 because IHL invested in fixed assets to expand the business. Cash provided by financing activities significantly increased by 127 MB and 155 MB from 2010 and 2009, respectively due to the new short-term and long-term loans and decrease in dividend payment in both years. 8|Page SAT: There was significant decrease in cash balance of 532 MB in year 2011 but essential increase of 805 MB in 2010.

Cash provided by operating activities of 2011 dramatically decreased by 526 MB due to decrease in net profit affected from Tsunami in Japan and flooding in Thailand. In the contrary, for 2010, SAT got higher net profit from its operations. Cash used in investing activities significantly increased by 649 MB and 560 MB in 2011 and 2010, respectively which mainly from purchasing of fixed assets for new product line and new factory in 2011 to support future sale orders and investing in machineries for factory in Rayong in 2010.

Cash provided by financing activities of 2011 decreased by 163 MB from its higher dividend payment but increased by 915 MB due to cash proceeded from issuance of share capital and long-term loans. TKT: Cash balance increased by 23 MB in year 2011 but decreased by 3 MB in 2010. Cash provided by operating activities of 2011 decreased from 2010 by 12 MB which is mostly from the decrease in net profit in 2010 to net loss in 2011.

Cash used in investing activities slightly decreased from 2010 by 6 MB but there was Higher amount of cash used in investing activities was because TKT invested in fixed assets for production expansion for higher market consumption. Cash provided by financing activities increased by 32 MB in 2011 due to the new short-term and longterm loans for payment of machineries due. Also, there was an increase of 107 MB in 2010 due to new short-term and long-term loans to support purchasing of fixed assets. Investment Decision Many automotive producers are affected by flooding.

They either slowed or shut down their productions since October from shortages of supplies. Meanwhile, automotive production of Thailand significantly dropped in the 4th quarter of 2011. Although we expected all companies to post loss in 2011, IHL and SAT still announced positive 9. 56% and 6. 36% of net profit margin, respectively. SAT also provided higher liquidity ratio than industry average. On the other hand, IHL had a problem of liquidity due to Tsunami and flooding. However, IHL had 20. 94% of ROA and 6. 92% of ROE which are the highest value in this sector. P/E ratio of IHL was 13.

04 which was a bit higher than P/E of SET index (P/E = 12. 07 as of December 31, 2011). This may due to speculation and expectation of growth of the company in the future by investors. Compared to IHL and SET index, SAT price was cheaper at 10. 99 of P/E ratio. Also, IHL performed worse than SAT in term of leverage and debt ratios. By the way, IHL seemed to have some problems in this flooding period but we expected that IHL will eliminate these problems in 2012. 9|Page In summary, IHL had a higher return which came up with higher risk of liquidity problem of the firm.

SAT performance was also good compared to the industry but lower return than IHL but with lower risk. These two stocks were interesting for investment portfolio. However, it depends on acceptable risk of each investor. For investors who have low risk tolerance, they should choose SAT which gave return higher than industry average but lower than IHL. For investors who can bear high risk, they should select IHL for an expected superior return of their portfolios. 10 | P a g e Appendix 1 Financial Ratios AH 2011 1. Liquidity Ratios Current Ratio Quick Ratio 2.

Asset Management Ratios Inventory T urnover Days Sales Outstanding (DSO) Fixed Assets T urnover T otal Assets T urnover 3. Leverage or Debt Ratios T otal Debt Ratio T imes Interest Earned Debt to Equity Ratio Equity Multiplier 4. Profitability Ratios Gross Profit Margin Operating Profit Margin Net Profit Margin Return of T otal Assets Basic Earning Power (BEP) Return on Equity DuPont Analysis ROA* DuPont Analysis ROE** 5. Market Ratios Earnings per share Price / Earnings Ratio Book Value Per Share Market to Book Ratio -1. 72 -5. 93 18. 12 0. 56 1. 57 10. 38 20. 34 0. 80 -0. 48 -17. 64 17. 92 0. 48 0. 49 13.

04 2. 36 2. 73 0. 91 12. 20 2. 44 4. 55 0. 36 14. 85 2. 48 2. 18 1. 20 10. 99 12. 30 1. 07 2. 44 11. 99 11. 98 2. 44 1. 05 20. 04 9. 56 2. 20 -0. 07 -25. 95 1. 86 0. 97 0. 19 10. 74 2. 11 0. 97 0. 11 14. 55 2. 04 0. 81 -0. 02 -1. 96 8. 66 1. 33 1. 28 11. 33 9. 22 2. 19 0. 26 7. 95 8. 00 1. 41 0. 50 5. 77 8. 63 1. 65 7. 38% -0. 57% -3. 79% -3. 40% -0. 51% -9. 55% -3. 40% -9. 55% 7. 31% 6. 21% 5. 03% 22. 18% 24. 97% 18. 76% 15. 14% 19. 70% 17. 86% 11. 70% 16. 10% 17. 12% 14. 10% 17. 02% 14. 69% 15. 27% 0. 59% 14. 92% 21. 10% 13. 57% 9. 56% 14. 97% 6. 92% 14. 57% 8. 30% 6. 55% 9. 43% 15. 75% 11. 15% -0.

02% 6. 36% 12. 12% 4. 62% 9. 40% 7. 32% -1. 16% 5. 08% -1. 46% 7. 74% -0. 02% 4. 58% 3. 30% 4. 29% 5. 94% 9. 00% 4. 29% 9. 00% 3. 63% 2. 81% 3. 41% 4. 41% 5. 55% 3. 41% 5. 55% 5. 94% 11. 91% 2. 74% 1. 67% 8. 47% 7. 92% 7. 24% 4. 20% 3. 46% 5. 82% 7. 12% 3. 46% 7. 12% 8. 36% 5. 14% 4. 35% 7. 10% 9. 95% 4. 35% 9. 95% 0. 64 -0. 25 0. 83 2. 81 0. 60 4. 00 0. 63 2. 49 0. 55 0. 33 0. 21 2. 22 0. 67 6. 66 0. 39 3. 03 0. 61 12. 82 0. 45 2. 56 0. 55 4. 84 0. 38 2. 24 0. 53 5. 06 0. 67 2. 11 0. 50 8. 91 0. 55 1. 98 0. 54 4. 19 0. 60 2. 16 0. 61 -0. 01 0. 33 2. 56 0. 52 8. 27 0. 14 2. 10 0. 39 5. 21 0. 10 1. 63 0.

61 2. 86 0. 56 2. 63 0. 56 8. 50 0. 44 2. 28 0. 51 3. 64 0. 32 2. 06 0. 56 5. 00 0. 44 2. 32 10. 75 42. 40 1. 57 0. 90 11. 53 52. 04 2. 05 0. 99 10. 49 57. 93 1. 43 0. 75 1. 57 35. 26 1. 30 0. 72 2. 28 41. 72 1. 75 0. 97 2. 12 72. 96 1. 53 0. 79 7. 60 49. 75 1. 02 0. 73 11. 36 66. 12 1. 33 0. 78 9. 69 82. 74 1. 01 0. 69 6. 79 61. 57 2. 19 1. 25 10. 95 68. 80 2. 08 1. 30 10. 52 72. 52 1. 96 1. 21 6. 68 47. 24 1. 52 0. 90 9. 03 57. 17 1. 80 1. 01 8. 21 71. 54 1. 48 0. 86 7. 97 58. 65 1. 60 0. 92 0. 67 0. 45 0. 88 0. 65 0. 54 0. 39 0. 81 0. 14 1. 01 0. 27 1. 24 0. 45 1. 16 0. 77 1. 52 1. 26 1. 00 0. 77 0.

85 0. 51 0. 78 0. 56 1. 08 0. 78 0. 87 0. 47 1. 05 0. 69 0. 96 0. 60 0. 96 0. 58 2010 2009 2011 IHL 2010 2009 2011 SAT 2010 2009 2011 TKT 2010 2009 2011 Industry Average 2010 2009 3 years 3. 47% -1. 64% 3. 44% -1. 22% 6. 14% 0. 44% 10. 80% 20. 54% 10. 70% 6. 86% 12. 22% 4. 28% 11. 21% 4. 35% 18. 37% 1. 67% 7. 92% 8. 56% -2. 70% 20. 94% 37. 27% 14. 65% 3. 44% -1. 22% 6. 92% 14. 57% 6. 55% 9. 76% 18. 64% 10. 96% -3. 74% 4. 62% 9. 40% 5. 08% -1. 46% 8. 56% -2. 70% 20. 94% 37. 27% 14. 65% 9. 76% 18. 64% 10. 96% -3. 74% 4. 35% 18. 37% 11 | P a g e CrossSe ctional 1. Liquidity Ratios Current Ratio Quick Ratio 2.

Asse t Manage me nt Ratios Inventory T urnover Days Sales Outstanding (DSO) Fixed Assets T urnover T otal Assets T urnover 3. Leve rage or Debt Ratios T otal Debt Ratio T imes Interest Earned Debt to Equity Ratio Equity Multiplier 4. Profitability Ratios Gross Profit Margin Operating Profit Margin Net Profit Margin Return of T otal Assets Basic Earning Power (BEP) Return on Equity DuPont Analysis ROA* DuPont Analysis ROE** 5. Market Ratios Earnings per share Price / Earnings Ratio Book Value Per Share Market to Book Ratio Poor Poor Good Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Good Good Good OK Poor Poor

AH TimeSeries OK OK O ve rall CrossSe ctional Poor Poor IHL TimeSe ries Poor Poor O ve rall CrossSe ctional Good Good SAT Time Se ries Good Good O verall CrossSe ctional Poor Good TKT Time Se ries Poor Poor O verall Poor Poor Poor Poor Good Good Poor Good Poor Good Poor Poor Good Good Good OK Poor Good Poor Poor Poor Good Poor Poor Poor Good Poor Poor Good Poor Poor Poor Poor Good Poor Poor Good Poor Poor Poor OK Poor Good Good Poor Good Good Poor OK Poor Good Good Poor Poor Poor Poor Poor Poor Poor Poor Poor Good Good Poor Poor Poor Good Poor Poor Good Good Poor Good Good Poor Good Poor Poor Poor Poor

Good Good Poor Good OK Poor Good Good Poor Poor Poor Poor OK Poor Good Good Good Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Good Good Good Good Good Good Good Good Poor Poor Poor Poor Poor Poor Poor Poor Good Good Good Good Good Good Good Good Good Good Good Good Good Good Good Good Poor Poor Poor Poor Poor Poor Poor Poor Good Good Good Good Good Good Good Good Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Poor Good Poor Good Good Poor Good Poor Good Poor Poor Good Good Poor Good

Good Good Good Poor Poor Poor Good Poor Good Good Good Poor Poor Poor Poor Poor Poor Poor Poor OK Poor Poor Poor Poor 12 | P a g e AH 2011 Re mark: Dupont Ratios DuPont Analysis ROA* Net Profit Margin T otal Assets T urnover DuPont Analysis ROE** Net Profit Margin T otal Assets T urnover Equity Multiplier 2010 2009 2011 IHL 2010 2009 2011 SAT 2010 2009 2011 TKT 2010 2009 2011 Industry Ave rage 2010 2009 3 ye ars -3. 40% -3. 79% 0. 90 -9. 55% -3. 79% 0. 90 2. 81 3. 44% -1. 22% 3. 47% -1. 64% 0. 99 0. 75 6. 92% 14. 57% 9. 56% 14. 97% 0. 72 0. 97 6. 55% 8. 30% 0. 79 8. 30% 0. 79 2. 24 4. 62% 0. 73 9. 40% 0. 78 5.

08% -1. 46% 7. 32% -1. 16% 0. 69 1. 25 4. 29% 3. 30% 1. 30 9. 00% 3. 30% 1. 30 2. 10 3. 41% 2. 81% 1. 21 5. 55% 2. 81% 1. 21 1. 63 1. 67% 2. 74% 0. 90 2. 74% 0. 90 2. 63 7. 92% 8. 47% 1. 01 8. 47% 1. 01 2. 28 3. 46% 4. 20% 0. 86 4. 20% 0. 86 2. 06 4. 35% 5. 14% 0. 92 5. 14% 0. 92 2. 32 6. 36% 12. 12% 8. 56% -2. 70% 20. 94% 37. 27% 14. 65% 3. 47% -1. 64% 0. 99 2. 49 0. 75 2. 22 9. 56% 14. 97% 0. 72 3. 03 0. 97 2. 56 9. 76% 18. 64% 10. 96% -3. 74% 6. 36% 12. 12% 0. 73 2. 11 0. 78 1. 98 7. 32% -1. 16% 0. 69 2. 16 1. 25 2. 56 6. 48% 19. 50% 7. 45% 11. 02% Appendix 2 Financial Statements of each company 13 | P a g e

AAPICO Hitech Public Company Limited and its subsidiaries Statements of financial position As at 31 December 2011 and 2010 (Unit: Baht) Consolidated financial statements Note Assets Current assets Cash and cash equivalents Current investments Trade and other receivables Short-term loans to related parties Inventories Other current assets Total current assets Non-current assets Restricted bank deposits Long-term loans to related parties Investments in associates Investments in subsidiaries Other long-term investments Property, plant and equipment Leasehold right Deposit for purchase of assets Goodwill Other intangible assets Non-operating assets Other non-current assets Total non-current assets Total assets 18 19 20 12 8 13 14 15 16 17 370,493 728,543,862 82,349,766 6,578,407,781 187,682,050

14,056,498 1,086,861,862 87,104,053 45,000,000 16,718,554 8,827,094,919 11,521,206,298 362,280 11,071,365 523,675,853 74,397,208 5,546,732,413 118,141,636 256,818,399 1,286,861,862 93,677,955 45,000,000 19,102,600 7,975,841,571 11,474,181,598 3,226,314,688 346,096,812 3,661,336,705 1,410,813,379 8,977,676 25,849,297 4,695,211 8,684,083,768 9,516,408,113 2,963,454,107 261,597,112 3,761,336,705 1,107,567,656 39,686,820 30,507,292 7,359,232 8,171,508,924 9,122,713,993 8, 10 8 11 9 238,957,479 64,810,405 1,202,831,886 25,000,000 892,035,981 270,475,628 2,694,111,379 281,597,310 303,112,191 1,617,476,749 113,926,349 911,742,561 270,484,867 3,498,340,027 18,109,481 93,479 433,948,141 193,000,000 155,420,535 31,752,709 832,324,345 14,203,196 83,746 420,446,894 263,926,350 238,662,919 13,881,964 951,205,069 2011 2010 Separate financial statements 2011 2010 The accompanying notes are an integral part of the financial statements. AAPICO Hitech Public Company Limited and its subsidiaries Statements of financial position (continued) As at 31 December 2011 and 2010 (Unit: Baht) Consolidated financial statements Note Liabilities and shareholders’ equity Current liabilities Bank overdrafts and short-term loans from banks Trade and other payables Current portion of long-term loans Current portion of liabilities under finance lease agreements Short-term loans from related parties Provisions for product warranty Deposit received i

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