Regarding our Aug 2 report “Bt520, Bt690, Bt1,000—place your bets”, we recommended postponing profit taking until the price passed Bt690. Yesterday, its stock price hit a 1-year high of Bt694, and then fell to close at Bt668. The risk/reward trade-off doesn’t look great right now, so we recommend taking some profit at this level. But for investors who want to hold on to this stock, you are encouraged to attend our virtual conference event on Sep 20.
Growth momentum through 3Q22
Despite supply disruptions, DELTA’s raw materials inventory should remain well-managed in 3Q22. Demand continues solid, particularly for high-end data center products (ongoing from 2Q22). Overall, 3Q22 sales (in US$) should be as strong as in 2Q22 (higher growth in baht terms, due to baht depreciation). Overall, we expect its core profit to rise 200% YoY but be flattish QoQ in 3Q22. DELTA’s 1H22 core profit accounts for 54% of Bloomberg’s consensus forecast of Bt11bn (against our core profit assumption of Bt13bn). The firm’s 2H core profit is usually higher than in 1H. Therefore, we expect to see a flow of consensus earnings upgrades of about 20% in the foreseeable future.