At the end of the morning session on Wednesday, the share price of Delta Electronics (Thailand) Public Company Limited (SET: DELTA) jumped by 6.94% or THB 11.00 to THB 169.50, with a trading value of THB 3.93 billion.
Phillip Securities (Thailand) expects DELTA to report a third-quarter net profit of THB 5.01 billion. This reflects a decline of 15.2% compared to the same period last year while representing an increase of 8.3% from the previous quarter. The analyst cites a stronger average Thai baht—at around THB 32.3 against the US dollar—as a key headwind, reducing revenue reported in Thai baht terms.
DELTA’s gross profit margin (GPM) is projected to decline to 24.6% year-on-year and quarter-on-quarter, pressured by the stronger currency as standard cost calculations were based on recent exchange rates. The same period last year also saw a reversal of inventory writedowns, leading to a higher profit base.
Additionally, revenue from the infrastructure business, which accounted for approximately 19% of total revenue, and the mobility segment, at around 22%, are both likely to soften following a slowdown in project deliveries in the previous quarter and impacts from the 25% U.S. tariff (Section 232), which slowed U.S. revenue. Even though European projects continue, they have not fully offset these impacts.
However, DELTA remains supported by its core power electronics segment, representing about 56% of total revenue, buoyed by persistent demand for data centers in line with long-term partner strategies. As a result, the company expects total revenue to reach $1.36 billion, up 11.9% year-on-year and 2.3% quarter-on-quarter. This equates to approximately THB 44.8 billion in baht-denominated revenue, up 3.6% from last year and 0.6% from the previous quarter.
Sales, general, and administrative expenses (SG&A) as a percentage of sales is expected to drop to 12.7% from both the previous year and previous quarter, attributed to the conclusion of legal case expenditures and previous quarter provisions, as well as reduced royalty expenses amid a slowdown in electric vehicle sales.
From a strategic perspective, Phillip Securities maintains an optimistic growth outlook for DELTA, underscored by large-scale investments in global data centers and artificial intelligence. Key projects such as NVIDIA and OpenAI’s $100 billion Stargate initiative in the U.S.—poised to advance Agentic AI and AI Factory capabilities—are set to play a major role in the future technology landscape, benefiting DELTA significantly.
The analyst estimates that AI-related revenue could account for up to 50% of the company’s total by year-end, with most major customers based in the U.S. Regarding Thailand’s 19% tariff, Phillip notes that while DELTA pays the duty upfront, these costs are later reimbursed as clients pull inventory from hubs, which is then recognized as other income in subsequent quarters.
Phillip Securities reiterates an ‘Accumulate’ recommendation for DELTA, raising the target price to THB 180 per share, based on a perceived one-year high P/E of 100x. This upgrade reflects continuous revenue growth projections through 2025–2026, driven by DELTA’s expanding business in AI and data centers.
