Delta Electronics (Thailand) reported a 30% increase YoY of net profit to THB 3,614 million in that first quarter, mainly from sales revenues and service income.
Tisco Securities stated that net profit was in line with its estimate, but 6% below Bloomberg consensus, while adding that though lower freight cost kept SG&A significantly lower than Tisco’s estimate, it was still not enough to offset the weaker-than-expected GPM of 20.8%.
Even with revenue coming 5% above Tisco’s estimate of THB 32 billion, it still recommended ‘Sell’ at a target price of THB551 per share. The broker noted that it valued DELTA with the relative approach, using a P/E of 39.5x. With significant downside to its target price and an overly-demanding valuation, Tisco maintained its Sell rating.
SCB X Public Company Limited’s securities arm Innovest X Securities (INVX) expected DELTA’s business to continue growing with a 14% net profit increase this year, boosted by more orders and a backlog that the company also expanded its production capacity to support this. However, INVX caution investors on investing in DELTA due to its higher valuation of 70x 2023PE than its global peers.