Bualuang Securities (BLS) wrote that Delta Electronics (Thailand) Public Company Limited (SET: DELTA) may be at a turning point, as recent revenue recovery from Delta Taiwan in June suggests a shift from supply-side concerns towards a stronger recovery outlook, with a potential for better-than-expected 2Q26 results.
In June, the market acknowledged that DELTA entered 2Q26 with robust order flows and a substantial backlog. However, shortages in certain materials—particularly high-voltage MOSFETs and memory-related components—constrained production capabilities and led to delivery delays.
As a result, the market revised its 2Q26 sales growth forecast down to 5% QoQ, after earlier expecting double-digit growth, with expected net profit at THB 8.5–8.8 billion (up 80–90% YoY, but down 5% QoQ). Nevertheless, the revenue rebound from Delta Taiwan in June suggests that these bottlenecks are beginning to ease. The parent company reported June revenue of TWD 65.6 billion, up from TWD 58.7 billion in April and TWD 59 billion in May.
While the Infrastructure segment (+25% MoM) drove the bulk of growth, Power division revenues also increased (+3% MoM). Overall, Delta Taiwan posted total 2Q26 revenue of TWD 183.3 billion, a rise of 48% YoY and 15% QoQ. Broken down by segment, Power grew 50% YoY and 13% QoQ, Mobility declined 20% YoY but grew 8% QoQ, and Infrastructure surged 77% YoY and 22% QoQ.
Given the close business linkage between Delta Taiwan and Delta (Thailand), monthly revenue trends from Delta Taiwan are seen as a strong indicator for Delta (Thailand)’s performance. Around 60% of Delta Taiwan’s AI/Data Center Power business is estimated to be connected with Delta (Thailand), resulting in a strong correlation between their revenues.
Based on this analysis, Delta (Thailand)’s 2Q26 revenue is expected to grow approximately 10% QoQ, higher than the revised market forecast of 5% QoQ, though still below company guidance following its 1Q26 results (15% QoQ growth). Cautious assumptions remain in place for gross margin, projected at 30% (down from 32% in 1Q26), due to external procurement, onboarding of new suppliers, fixed costs from new plants, and potential inventory provisions. While margins may soften, stronger-than-expected revenues could lift 2Q26 net profit to THB 9–9.5 billion—flat QoQ but 5–10% above the consensus of THB 8.7 billion.
Looking ahead, the analyst expects the upcoming post-results briefing on July 27 to adopt a more positive tone, particularly as management is likely to flag that material shortages have started easing since June. Full-year guidance is expected to remain unchanged, as the company views the supply-side issues as temporary rather than demand-driven, and expects stronger growth to resume in the second half of 2026.
Previously, concerns about supply chain uncertainty and a weak 2Q26 outlook weighed on DELTA’s share price, pressing it towards the +2 standard deviation range (THB 270–280). However, the lowest closing last week was THB 292, and the latest closing (July 22) is THB 304—still above those levels.
Following these, Bualuang assigns a ‘Buy’ rating for DELTA as the June recovery at Delta Taiwan, which suggests an earnings upside in 2Q26, coupled with the potential for more optimistic management commentary, could return the stock to a recovery path towards the 2027 target price of THB 440 per share.
