Thai Stanley Electric Public Company Limited

Mr. Yeap Su Chuan, Executive Chairman of Aapico Hitech Public Company Limited, or AH, said the government's increase in import taxes on electric vehicles is aimed at encouraging operators to set up production bases in Thailand, which will benefit domestic auto parts manufacturers. AH is ready to produce parts for EV cars immediately, because many key components such as body structures, wheels and seats remain similar to those of conventional combustion-engine cars. However, receiving orders from new car models takes at least 12 months before parts delivery can begin. For the outlook in the second half of 2026, the business in Thailand has received new product orders worth a total of about 100 million baht, similar to the business in Portugal, which has begun producing parts under new orders. Meanwhile, the car dealership business in Malaysia remains a key growth driver, supported by strong Proton sales from new EV models. Yuanta Securities (Thailand) Company Limited said the Electric Vehicle Policy Committee approved in principle a restructuring of the excise tax on electric vehicles, divided into three tiers based on the level of investment, production and use of local content in Thailand: the lowest tax rate for domestic manufacturers using a high proportion of Thai parts, a middle rate for importers who enter to test the market and have plans to produce in Thailand, and the highest rate for importers selling without plans to invest in the country. It views this as a positive factor for Thai auto parts makers including AH, SAT and STANLY over the medium to long term, and expects AH's operating results in the second half of 2026 to recover continuously both half-on-half and year-on-year, driven by its cost-control strategy for selling and administrative expenses, and expects orders from new car models to come in the third quarter of 2026. It therefore raised its 2026 full-year profit forecast by 13% to 841 million baht, up 14% year-on-year, and its 2027 forecast by 15% to 908 million baht, up 8% year-on-year. It also upgraded its recommendation to "Buy" and raised its 2027 base valuation from 16.80 baht to 19.20 baht.

STANLY revealed that the automotive market in 2026 is expected to slow by about 10%, but the company has managed to maintain its sales level without following the market decline. It employs strategies such as cost reduction, developing new product champions, adding accessory products, and accelerating the expansion of its non-automotive business to diversify risks. Meanwhile, its financial position remains strong, with nearly 10 billion baht in cash and no borrowings. Mr. Apichart Leeissaranukul, Chairman of Thai Stanley Electric Public Company Limited, or STANLY, stated that the domestic automotive industry has not yet recovered, being in a low season and rainy period, which has slowed demand for vehicles. The trend for the final quarter of 2026 will depend on economic stimulus measures and clarity on the restructuring of automotive excise taxes, which will affect the industry's direction. The import of EV vehicles, especially completely built-up units accounting for more than half of imports, impacts Thai parts manufacturers and suppliers, as there is insufficient local production or use of domestic parts. The company is in discussions with the government to improve local content rules, particularly regarding the inclusion of profit margins in calculations, which may not reflect true value. International markets remain pressured by geopolitical conflicts and global economic issues, especially in the Middle East and the Russia-Ukraine war. The Cambodian market can no longer be relied upon as a primary market as in the past. The company is preparing countermeasures by developing new products, adding accessory items, and expanding non-automotive operations, investing in automation and cobots to reduce costs, with a payback period of one to two years, and streamlining its organizational structure. Recently, it paid a dividend of 17 baht per share, totaling approximately 1 to 1.5 billion baht, while cash flow remains normal. Fund managers have shown interest in meetings due to returns and management capability amid the crisis.

The government is considering restructuring excise tax rates for electric vehicles, with a plan to impose higher taxes on imported EVs that lack a manufacturing base in Thailand. Meanwhile, operators that set up factories and use domestic production networks will receive greater benefits. The proposal is expected to be submitted to the cabinet within September. Analysts from Yuanta Securities Thailand noted that this issue negatively affects MGC and ASAP stocks, which import EVs for sale, but is positive for KGEN, as it has a production base in Thailand and directly holds shares in domestic factories. Parts manufacturers have proposed increasing the tax differential between imported and domestically produced EVs to at least 30 to 50 percent, up from the current roughly 8 percent. This would enhance the advantage of domestically produced vehicles and encourage EV makers to use local supply chains more, benefiting Thai parts makers such as AH, SAT, STANLY, and EPG. SAT is highlighted as a top pick with a buy recommendation and a target price of 18.80 baht per share.

Thai Stanley Electric, or STANLY, expects its performance to recover in the second half of fiscal year 2027, supported by the government's 400 billion baht economic stimulus package and a vehicle scrappage scheme that could boost domestic car purchases, as well as a recovery in export markets if geopolitical tensions ease. The company maintains its annual revenue growth target of 5 to 10 percent, with cash on hand of about 10 billion baht and no interest-bearing debt. For the first quarter of fiscal 2027, the company posted a profit of 361.65 million baht and total revenue of 2.67 billion baht, a slight decline but still satisfactory amid an economic slowdown and higher raw material costs. The second quarter is expected to be the year's trough, before a gradual recovery from the third quarter onward, driven by new model launches from customers and the development of dies and molds, which are core products generating strong revenue.

Asia Plus Securities research reports that four major Chinese technology and automotive companies are preparing to expand investments in Thailand worth a combined 70 billion baht this year, focusing on two future industries: AI and data center technology, where Innolight Technology and Eoptolink Technology will expand production bases for optical transceivers to support AI and cloud data center growth, and the electric vehicle industry, where Xiaomi Corporation is considering setting up an EV production base and research and development center in Thailand, while Changan Automobile is moving ahead with expanding production capacity from 100,000 to 200,000 units per year by 2030, along with establishing a regional headquarters and an EV R&D center. Stocks expected to benefit include industrial estate groups such as AMATA, WHA, ROJNA, and PIN; automotive groups such as AH, SAT, and STANLY; parts groups such as HANA, DELTA, KCE, and SMT; and energy groups such as GULF.

Four major technology and automotive companies from China are preparing to expand their investments in Thailand, totaling 70 billion baht within this year, focusing on the electric vehicle industry and AI and data center technology, according to a report by Asia Plus Securities. In the EV sector, Xiaomi Corporation is considering expanding its EV production base and establishing a research and development center in Thailand, while Changan Automobile is moving forward with expanding production capacity from 100,000 to 200,000 units per year by 2030, along with setting up a regional headquarters and an EV R&D center. In the AI and data center group, Innolight Technology is preparing to build a third factory in Saraburi province to expand production of optical modules, and Eoptolink Technology is preparing to expand production capacity at its factories in Chonburi and Rayong. Stocks expected to benefit include industrial estate groups such as Amata, WHA, Rojana, and Pin, automotive groups such as AAPICO Hitech, Somboon Advance Technology, and Stanley Electric, component groups such as Hana Microelectronics, Delta Electronics, KCE Electronics, and Stars Microelectronics, and energy groups such as Gulf Energy Development.