Earnings Report /
Thailand

Delta Electronics Thailand PCL: Missed our expectation

  • 1Q22 core earnings were 17% below our projection

  • DELTA posted a 1Q22 net profit of Bt2.8bn

  • 1Q22 revenue totaled Bt25bn, up by 29% YoY and 6% QoQ

Napon Jaisan
Napon Jaisan

Equity Research Analyst

Bualuang Securities
27 April 2022

DELTA’s growth outlook is solid, driven by technology trends—EVs, data centers, and the IOT. However, its 2Q22 core earnings will be pressured by several factors.  And the stock is expensive—a 2022 PER of 52x and a PEG ratio of 1.1x. We de-rated our PER pegged from 60x to 50x, which derived to our new target price of Bt370 (from Bt450). Our call shifted from HOLD to SELL.

1Q22 core earnings were 17% below our projection

DELTA posted a 1Q22 net profit of Bt2.8bn, up 58% YoY and 33% QoQ. Stripping out a FX gain (Bt200m) and some insurance compensation income due to flooding (Bt331m), core earnings would be Bt2.2bn, up by 49% YoY and 17% QoQ. The core number was 17% below our model (but in line with the consensus), due to a slimmer GM than we had assumed.