Profit Struggles Force Share Price Drop by Half for Delta Electronics in Thailand, Leading to Loss of约瑟夫
31 March 2025 · Uncategorized ·
Source: · https://technews.tw/2025/03/29/delta-electronics-thailand-pcl-20250328/
Four months ago, the shares of Delta Electronics (Thailand) PCL led their peers in performance. However, now its share price has been halved, resulting in a market value loss of approximately $30 billion.
According to Bloomberg data, this year alone, Delta’s stock prices have plummeted over 50%, surpassing the decline rate among any electronic component manufacturer globally valued at least $50 million or more. This plunge led to an evaporation of about $30 billion from its market value, making it one of the worst performers on MSCI Asia Pacific Index this year.
The stock price collapse began in November 2024 when Delta reached a record high for company history; however, due to index weight restrictions set by securities exchanges and underwhelming operational performance compared with expectations, share prices rapidly declined.
Yugi Takeshima from Maybank Securities (Thailand) PCL stated that rising costs are becoming an obstacle to profits at Delta Electronics, coupled with slowing growth in operations. He believes the AI boom is unlikely to significantly boost Delta's business prospects for 2025.
Delta’s products include electric vehicle components and data center power equipment among others. In its latest quarter, net profit dropped by as much as 78%, while full-year revenue increased by 12% year-over-year (YoY) with a YoY increase in profits of only 2.8%. This growth rate has significantly slowed compared to the previous year despite some gains from AI business which could not offset negative impacts on electric vehicle operations due to poor car market conditions.
Takeshima predicts that Delta’s profit situation will further drag down its stock price, expecting a decline by about 5% in profits for next year. This is partly attributed to an increase in tax rates; the Thai government may raise corporate taxes from around 3%-5% previously up to as high as 15%. He also cut his target share price of Delta almost in half earlier this month.
Despite these challenges, according to Chananthorn Pichayapanupat from KGI Securities (Thailand) PCL, the stock has fallen into an attractive valuation range due to market optimism about increased demand for its products driven by widespread adoption of AI servers.
(Lead image source: TechNews)
According to Bloomberg data, this year alone, Delta’s stock prices have plummeted over 50%, surpassing the decline rate among any electronic component manufacturer globally valued at least $50 million or more. This plunge led to an evaporation of about $30 billion from its market value, making it one of the worst performers on MSCI Asia Pacific Index this year.
The stock price collapse began in November 2024 when Delta reached a record high for company history; however, due to index weight restrictions set by securities exchanges and underwhelming operational performance compared with expectations, share prices rapidly declined.
Yugi Takeshima from Maybank Securities (Thailand) PCL stated that rising costs are becoming an obstacle to profits at Delta Electronics, coupled with slowing growth in operations. He believes the AI boom is unlikely to significantly boost Delta's business prospects for 2025.
Delta’s products include electric vehicle components and data center power equipment among others. In its latest quarter, net profit dropped by as much as 78%, while full-year revenue increased by 12% year-over-year (YoY) with a YoY increase in profits of only 2.8%. This growth rate has significantly slowed compared to the previous year despite some gains from AI business which could not offset negative impacts on electric vehicle operations due to poor car market conditions.
Takeshima predicts that Delta’s profit situation will further drag down its stock price, expecting a decline by about 5% in profits for next year. This is partly attributed to an increase in tax rates; the Thai government may raise corporate taxes from around 3%-5% previously up to as high as 15%. He also cut his target share price of Delta almost in half earlier this month.
Despite these challenges, according to Chananthorn Pichayapanupat from KGI Securities (Thailand) PCL, the stock has fallen into an attractive valuation range due to market optimism about increased demand for its products driven by widespread adoption of AI servers.
(Lead image source: TechNews)