Currently, around 65% of the revenue comes from the automotive sector, approximately 18% from consumer goods, and about 17% from the medical equipment segment. POLY aims to balance revenue among these sectors, reducing reliance on any one area. We plan to accelerate growth in consumer goods and medical equipment through marketing initiatives and collaborations with institutions, ensuring products provide excellent customer experiences.
In the second half, several positive factors emerge, including decreasing raw material prices, reduced energy costs from successful installation and operation of solar cells, and ongoing risk mitigation plans. Automation improvements enhance production efficiency, while mold development increases production rates and reduces waste. External factors include rising consumer confidence and increasing purchasing trends, reflecting an optimistic economic outlook.
In the third quarter, several new products have started to mass production, restoring revenue lost from the consumer goods segment. Costs are decreasing with trends in raw material and energy price reductions as mentioned before.
POLY aims for a preliminary profit margin of 25-30% from the revenues rebounding in Q3-Q4. Costs are decreasing, including sales and administrative expenses, targeted at 8-9% of revenue. Financial costs are low due to debt repayments and BOI tax benefits, boosting profitability compared to the first half of the year.
The management closely monitors the economic situation and operational performance, considering uncertainties. Emphasis is placed on research and development, such as rubber formula enhancement, utilization of recyclable and eco-friendly materials. Production efficiency is improved through automation, mold development, and energy-saving initiatives. These measures ensure high-quality, competitive products.
Emphasizing product development to meet market demands and exploring new opportunities, such as collaborating on developing silicone-based products for Percutaneous Endoscopic Gastrostomy (PEG) with the Faculty of Medicine, Chulalongkorn University. Additionally, enhancing production efficiency, as mentioned earlier.
Currently, customers have begun adjusting their marketing strategies by expanding sales to other countries to compensate for delayed orders due to the economic slowdown in the United States. Nevertheless, POLY continues to enjoy trust by receiving new product orders to partially replace the declining ones. Furthermore, consumer products in the Japanese market are still experiencing strong sales growth through promotional campaigns, ensuring continuous growth.
The trend in raw material prices is primarily based on oil prices due to the fact that many petrochemicals are derived from processes related to oil. In the year 2021, oil prices continued to rise steadily due to the ongoing conflict between Russia and Ukraine, which led to consecutive increases in oil prices. However, this situation has become more volatile. Oil prices started to decrease in the latter half of the year 2021. The trend in the year 2022 may need to be evaluated based on various factors such as economic conditions and the ongoing Russia-Ukraine conflict. Nevertheless, the company determines its selling prices based on costs. If there are changes in raw material prices in the future, selling prices will be adjusted accordingly.
Factors beyond the company's control, such as economic factors like economic downturns, inflation rates, are concerns. However, the company has planned and managed risks, developing strategies to handle potential future situations.
The company has set a growth target of 15%, which will be achieved through growth in all industries, including potential business opportunities from new sectors that might arise in the future.
The Solar cell installation plan aims to produce a maximum electricity output of approximately 2.5 MW. Assuming an efficiency rate of 75% and 5 hours of electricity production per day, the installation can produce approximately 243,750 units of electricity per month. This electricity usage will directly offset the on-peak electricity cost, which is currently high due to the high ft rate.
Currently, POLY use electricity 900,000 units per month including on-peak and of-peak. We expects the electricity costs will reduce approximately 25%.
The company's total production capacity is approximately 5,400 tons per year. The 2023 plan includes an increase of around 200 tons, mainly driven by the significant expansion of the production facilities in 2022 to accommodate the growing demands from various industries.
The investment plan for 2023 allocates an estimated budget of 300 million Baht. The major components of this plan include the installation of Solar cells, procurement of machinery to support production growth, and upgrading production lines for efficiency improvements.
Currently, the company does not have specific plans for JV and M&A activities. However, the company continues to explore growth opportunities that align with its policies and strategies, considering objectives that align with the company's vision, focusing on creating long-term value for shareholders.
