Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Zero One

Founded in 2015, Zero One produces independent investment research and provides corporate finance advisory services with a focus on both listed and private technology companies. Founder Vincent Fernando has over 20 years of experience in US and Asia capital markets.

Independent Investment Research

Equity Bottom-Up

Delta Electronics Thailand  / Equity Bottom-Up

<ul>
<li>
Delta Thailand's rally looks sentiment-driven, not fundamental: 1Q25 results were decent but not a major beat.</li>
<li>
Valuation gap widened to unjustifiable levels: Delta Thailand trades at 52x trailing PER vs. Delta Taiwan at 25x.</li>
<li>
Delta Taiwan remains the structurally stronger,cheaper exposure to the group's long-term growth themes.</li>
</ul>



Delta Thailand's rally looks sentiment-driven, not fundamental: 1Q25 results were decent but not a major beat.

Valuation gap widened to unjustifiable levels: Delta Thailand trades at 52x trailing PER vs. Delta Taiwan at 25x.

Delta Taiwan remains the structurally stronger,cheaper exposure to the group's long-term growth themes.


Delta Taiwan Vs. Thailand Monitor: Delta Thai Rally Looks Overdone; Taiwan Remains Better Value

Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

<ul><li>DELTA reported 1Q25 core profit of Bt5bn (+31% YoY, +143% QoQ), 21% higher than market expectations, driven by a better-than-expected gross profit margin (GPM) and lower-than-forecast selling and administrative expenses.</li><li>We believe that the better-than-expected 1Q25 performance will support DELTA’s share price in the short term, as historical data over the past eight quarters shows that the share price tends to react positively to earnings beats.</li><li>We are in the process of revising our estimates, rating, and target price for DELTA.</li></ul>

DELTA reported 1Q25 core profit of Bt5bn (+31% YoY, +143% QoQ), 21% higher than market expectations, driven by a better-than-expected gross profit margin (GPM) and lower-than-forecast selling and administrative expenses.We believe that the better-than-expected 1Q25 performance will support DELTA’s share price in the short term, as historical data over the past eight quarters shows that the share price tends to react positively to earnings beats.We are in the process of revising our estimates, rating, and target price for DELTA.

Delta Electronics (Thailand) - Notably Upbeat 1Q25 Earnings

<ul>
<li>Delta Thailand Has Dramatically Underperformed Delta Taiwan — Delta Thailand Now Finally Trading at a Less Extreme Level vs. Delta Taiwan</li>
<li>Latest Relative Growth Profiles — Delta Taiwan Has Higher Growth Profile in 2025E</li>
<li>Even After the Major Pricing Reversion Since Mid-February, Delta Thailand Remains Overvalued Relative to Delta Taiwan</li>
</ul>


Delta Thailand Has Dramatically Underperformed Delta Taiwan — Delta Thailand Now Finally Trading at a Less Extreme Level vs. Delta Taiwan
Latest Relative Growth Profiles — Delta Taiwan Has Higher Growth Profile in 2025E
Even After the Major Pricing Reversion Since Mid-February, Delta Thailand Remains Overvalued Relative to Delta Taiwan


Delta Taiwan Vs. Thailand Monitor: Delta Thailand Crash Closes Gap, But Still Relatively Expensive

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

Delta Electronics Thailand  / Index Rebalance

<ul>
<li>On 4 February, the SET floated a consultation paper on capping stocks in the <a href="https://www.smartkarma.com/entities/stock-exchange-of-thailand-set-50-index" target="_blank" data-smartkarma-citation="entities:31493:1" rel="noopener">Stock Exchange of Thailand SET 50 Index (SET50 INDEX)</a> at 10%.</li>
<li>The move was aimed at <a href="https://www.smartkarma.com/entities/delta-electronics-thailand-pcl-98806732-8ac4-42b2-a565-ba32673d1e5a" target="_blank" data-smartkarma-citation="entities:20912:1" rel="noopener">Delta Electronics Thailand (DELTA TB)</a> since it was the only stock with an index weight higher than 10%.</li>
<li>
<a href="https://www.smartkarma.com/entities/delta-electronics-thailand-pcl-98806732-8ac4-42b2-a565-ba32673d1e5a" target="_blank" data-smartkarma-citation="entities:20912:1" rel="noopener">Delta Electronics Thailand (DELTA TB)</a> has slid since then and at the current weight of 9.27% will not need to be capped. The market has adjusted for it.</li>
</ul>


On 4 February, the SET floated a consultation paper on capping stocks in the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) at 10%.
The move was aimed at Delta Electronics Thailand (DELTA TB) since it was the only stock with an index weight higher than 10%.

Delta Electronics Thailand (DELTA TB) has slid since then and at the current weight of 9.27% will not need to be capped. The market has adjusted for it.


SET50 Index: Market Moves Adjust for Consultation Proposal; DELTA in the Crosshairs (Again)

Event-Driven

Delta Electronics Thailand  / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/delta-electronics-thailand-pcl-98806732-8ac4-42b2-a565-ba32673d1e5a" target="_blank" data-smartkarma-citation="entities:20912:1" rel="noopener">Delta Electronics Thailand (DELTA TB)</a> is trading at a huge valuation premium to <a href="https://www.smartkarma.com/entities/delta-electronics-inc" target="_blank" data-smartkarma-citation="entities:12688:1" rel="noopener">Delta Electronics (2308 TT)</a>, though that has narrowed over the last couple of months.</li>
<li>
<a href="https://www.smartkarma.com/entities/delta-electronics-thailand-pcl-98806732-8ac4-42b2-a565-ba32673d1e5a" target="_blank" data-smartkarma-citation="entities:20912:1" rel="noopener">Delta Electronics Thailand</a> has already been on the Market Surveillance list for 2 months and inclusion for another 2 months will mean <a href="https://www.smartkarma.com/entities/stock-exchange-of-thailand-set-50-index" target="_blank" data-smartkarma-citation="entities:31493:1" rel="noopener">SET 50 Index</a> deletion in June.</li>
<li>A placement by <a href="https://www.smartkarma.com/entities/delta-electronics-inc" target="_blank" data-smartkarma-citation="entities:12688:1" rel="noopener">Delta Electronics (2308 TT)</a> is not out of the question and that further increases the downside risk for <a href="https://www.smartkarma.com/entities/delta-electronics-thailand-pcl-98806732-8ac4-42b2-a565-ba32673d1e5a" target="_blank" data-smartkarma-citation="entities:20912:1" rel="noopener">Delta Electronics Thailand (DELTA TB)</a>.</li>
</ul>



Delta Electronics Thailand (DELTA TB) is trading at a huge valuation premium to Delta Electronics (2308 TT), though that has narrowed over the last couple of months.

Delta Electronics Thailand has already been on the Market Surveillance list for 2 months and inclusion for another 2 months will mean SET 50 Index deletion in June.
A placement by Delta Electronics (2308 TT) is not out of the question and that further increases the downside risk for Delta Electronics Thailand (DELTA TB).


Delta Electronics (DELTA TB / 2308 TT): Off the Peak; SET50 Deletion Risk Increases

Thailand

Delta Electronics (Thailand) PCL designs and manufactures electronic equipment. The Company produces power systems for telecommunications, medical equipment, and industrial automation.  Delta also produces fans, electromagnetic interference filters, and solenoids.

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Delta Electronics Thailand (DELTA TB)

Delta Taiwan Vs. Thailand Monitor: Delta Thai Rally Looks Overdone; Taiwan Remains Better Value

Delta Thailand's rally created valuation gap widening to unjustifiable levels compared to Delta Taiwan. Delta Taiwan remains the stronger and...

Vincent Fernando, CFA

Delta Electronics (Thailand) - Notably Upbeat 1Q25 Earnings

DELTA reported 1Q25 core profit of Bt5bn (+31% YoY, +143% QoQ), 21% higher than market expectations, driven by a better-than-expected gross profit...

Krungthai XSpring

Delta Taiwan Vs. Thailand Monitor: Delta Thailand Crash Closes Gap, But Still Relatively Expensive

Delta Thailand has significantly dropped compared to Delta Taiwan but is still overvalued even after recent price adjustments. Delta Taiwan has a...

Vincent Fernando, CFA

SET50 Index: Market Moves Adjust for Consultation Proposal; DELTA in the Crosshairs (Again)

The SET is looking to cap stocks in the SET50/SET100 at 10% of the index weight. This is another attempt to curb DELTA's sway on the index. The...

Brian Freitas

Delta Electronics (DELTA TB / 2308 TT): Off the Peak; SET50 Deletion Risk Increases

The TH line trades at a valuation premium to the TW line. The price ratio is off the highs. Further downside possible if the parent sells down the...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Delta Taiwan Vs. Thailand Monitor: Delta Thai Rally Looks Overdone; Taiwan Remains Better Value

​Delta Thailand's rally created valuation gap widening to unjustifiable levels compared to Delta Taiwan. Delta Taiwan remains the stronger and...

Vincent Fernando, CFA

Delta Electronics (Thailand) - Notably Upbeat 1Q25 Earnings

DELTA reported 1Q25 core profit of Bt5bn (+31% YoY, +143% QoQ), 21% higher than market expectations, driven by a better-than-expected gross profit...

Krungthai XSpring

Delta Taiwan Vs. Thailand Monitor: Delta Thailand Crash Closes Gap, But Still Relatively Expensive

​Delta Thailand has significantly dropped compared to Delta Taiwan but is still overvalued even after recent price adjustments. Delta Taiwan has a...

Vincent Fernando, CFA

SET50 Index: Market Moves Adjust for Consultation Proposal; DELTA in the Crosshairs (Again)

The SET is looking to cap stocks in the SET50/SET100 at 10% of the index weight. This is another attempt to curb DELTA's sway on the index. The...

Brian Freitas

Delta Electronics (DELTA TB / 2308 TT): Off the Peak; SET50 Deletion Risk Increases

The TH line trades at a valuation premium to the TW line. The price ratio is off the highs. Further downside possible if the parent sells down the...

Brian Freitas

Delta Thailand's rally created valuation gap widening to unjustifiable levels compared to Delta Taiwan. Delta Taiwan remains the stronger and...

Delta Thailand has significantly dropped compared to Delta Taiwan but is still overvalued even after recent price adjustments. Delta Taiwan has a...