Macquarie has initiated coverage on Delta Electronics (Thailand) with an Outperform rating, highlighting the company’s unique positioning as Thailand’s only direct AI proxy and leading player in the high-growth data center power and liquid cooling sectors. The broker forecasts a robust revenue and profit CAGR of 17% and 21%, respectively, for FY2024-2027, underpinned by notable expansion in Delta’s higher-margin power solutions and liquid cooling businesses.
Delta holds scarcity value on the Stock Exchange of Thailand due to its status as the sole direct AI proxy, benefitting from surging demand in data centers. With 55% of revenue attributed to DC power and liquid cooling solutions, Macquarie expects the company to capitalize on exponential industry growth, particularly as the market for advanced server cooling reaches an inflection point in 2025.
Macquarie forecasts Delta’s power electronics to record a 25% CAGR over FY2024-2027, primarily on the back of rising server power demand and the rapidly expanding liquid cooling segment, driven by higher thermal needs for next-generation AI servers. The liquid cooling segment is anticipated to contribute around 7% and 10% of revenue in FY2026 and FY2027, respectively, supporting sustained margin expansion. Notably, though electric vehicle revenue (~20%) remains modest, a favorable product mix continues to bolster overall profitability.
Delta is poised to benefit from the shift of Taiwanese firms to ASEAN in light of US-China trade tensions, propelling data center construction across the region. The company is expected to utilize its newly completed Wellgrow facility, which expands its floor space by 52%, to capture swelling demand stemming from APAC’s 16.6GW data center pipeline expected by 1H2025.
Macquarie projects a 21% net profit CAGR for FY2024-2027, with its FY2027 earnings estimate 13% above Bloomberg consensus. The report pegs a target price of THB 210, based on a 78x PER multiple—reflecting a premium for healthy earnings growth prospects despite Delta’s high share price volatility. The key drivers of this volatility include the company’s scarcity premium, low free float (24% vs. peers above 60%), and its status as the largest SET50 index constituent (11% index weight). Interestingly, Delta’s share price shows a 93% correlation to its earnings.
Key catalysts include the maiden revenue from liquid cooling solutions, expected in 4Q2025, which should further support margin improvement. Macquarie also outlines a potential share price range under bear and bull scenarios at THB 125 and THB 265, respectively.
