Delta Electronics Thailand (SET: DELTA) management expects fourth-quarter 2026 sales to grow by a double-digit percentage quarter-on-quarter, but anticipates only a limited recovery in gross profit margin (GPM). The company has lowered its full-year margin target, while Yuanta Securities sees room for a share-price rebound but limited medium-term upside.
At an analyst meeting, management said fourth-quarter sales should be the year’s strongest as the company accelerates production to fulfil orders left uncompleted in the second and third quarters.
Management attributed the pressure on margins to higher raw-material costs, increased production to accommodate substantial orders and above-normal inventories requiring accounting provisions. It lowered the full-year GPM target to 29%, compared with more than 30% previously. The risk of additional provisions remains, although management expects it to ease.
Separately, Yuanta forecasts fourth-quarter revenue in US dollars to increase 10% from the preceding quarter. Its estimates assume a 29% GPM and net profit of approximately THB10 billion.
The brokerage believes DELTA’s share-price decline has largely accounted for earnings falling short of expectations. Shares now trade near their historical average price-to-earnings ratio, supporting the prospect of a gradual rebound towards approximately THB250 per share.
Yuanta nevertheless views the potential recovery as a rebound only. It sees limited medium-term upside because DELTA continues to command a substantial valuation premium to peers, amid growing concerns over global technology-stock valuations.
