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DELTA : Outstanding 2Q22 Earnings Leads to High 22E Base and Limited Growth in 23E

Thai Equity - Bottom-up - Equities, Pi Securities PCL, Thailand

Pi Research

Thai Equity - Bottom-up - Equities

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Equity Bottom-Up

Delta Electronics Thailand  / Equity Bottom-Up

<ul>
<li>We downgrade to HOLD from BUY and raise TP to Bt475, up 12% from previous TP, based on 38.6xPE’23E (average of 5-year trading). Analyst meeting came with a neutral tone. </li>
<li>2Q22 should be the highest of the year We believe its quarterly earnings already peaked in 2Q22 as the USD/THB will unlikely depreciate further, gains from FX will be limited </li>
<li>However, we believe the company will see significant earnings growth in 22E. 2H22 sales should contribute 53% of full-year 22E sales,due to the robust demand in EVs and data centers. </li>
</ul>


We downgrade to HOLD from BUY and raise TP to Bt475, up 12% from previous TP, based on 38.6xPE’23E (average of 5-year trading). Analyst meeting came with a neutral tone. 
2Q22 should be the highest of the year We believe its quarterly earnings already peaked in 2Q22 as the USD/THB will unlikely depreciate further, gains from FX will be limited 
However, we believe the company will see significant earnings growth in 22E. 2H22 sales should contribute 53% of full-year 22E sales,due to the robust demand in EVs and data centers. 


DELTA :  Growth Potential in 2022 Priced In