Somboon Advance Technology Public Co., Ltd. Business Report FY ended Dec. 2016

Financial Overview

(in million THB)

	FY ended Dec. 31, 2016	FY ended Dec. 31, 2015	Rate of change (%)	Factors
Net Sales	8,298.8	8,644.5	(4.0)	1)
Net Profit	607.6	641.5	(5.3)	2)

Factors
1) Net Sales
-The Company’s sales for the fiscal year ended December 31, 2016 totaled THB 8,298.8 million, a decrease of 4.0% from the previous year. The decrease in sales was caused by declines in both the automotive and agricultural machinery sectors stemming from general economic decline in Thailand as well as natural disasters. Notably, production volumes of pickups decreased compared to the previous year.

2) Net Profit
-In the fiscal year ended December 31, 2016, the Company’s net profit decreased by 5.3% to THB 607.6 million. The decrease in profit was caused primarily from the decline in sales volume.

Restructuring

-The Company announced that its wholly owned subsidiary, SBG international Japan Co., Ltd., has registered its dissolution on October 31, 2016. The subsidiary’s dissolution was due to the general decline in the domestic automotive industry combined with the fact that most of the Company’s operations can be managed in Thailand. (From a press release on October 20, 2016)

Outlook

-The Company expects that its 2017-2019 sales will improve and that vehicle production will reach 2 million units from 1.9 million in 2016. The first-car policy combined with Thailand's economic recovery will lead to future growth in the automotive industry. The Company expects that its sales for the fiscal year ending December 31, 2017 will increase between 3% and 5%. (From Bangkokbiznews article on December 9, 2016)

Market share of Major Products

(%)

Products	Company	FY ended Dec. 31, 2016	FY ended Dec. 31, 2015	FY ended Dec. 31, 2014
Rear axle shafts	Somboon Advance Technology Public Co., Ltd. (SAT)	76	81	80
Disc and drum brakes	Somboon Malleable Iron Industrial Co,. Ltd. (SBM)	25	28	27
Coil springs	Bangkok Spring Industrial Co., Ltd. (BSK)	31	29	38
Stabilizer bars	Bangkok Spring Industrial Co., Ltd. (BSK)	27	28	36
Leaf springs	Bangkok Spring Industrial Co., Ltd. (BSK)	-	-	14
Hubs	Somboon Forging Technology Co., Ltd. (SFT)	12	14	-

R&D Expenditure

-In the fiscal year ended December 31, 2016, the Company invested THB 9.7 million in research and development.

Technical Assistance Agreements

Company	Technical assistance from
Somboon Advance Technology Public Co., Ltd. (SAT)	Ibara Seiki
Somboon Malleable Iron Industrial Co,. Ltd. (SBM)	Ibara Seiki