Surging Delta Shares Stir Concern in Thai Stock Market
CEO of Delta Electronics Questions Share Price Spike, Prompting Dialogue with the Stock Exchange of Thailand
Delta Electronics Thailand, a prominent manufacturer of components for electric vehicles and data centers, is witnessing a remarkable spike in its share price.
This unprecedented surge has led to increased scrutiny and trading curbs from the Stock Exchange of Thailand (SET).
The company's shares rocketed by 165% from March to November, elevating Delta to the status of Thailand's most valuable company with a staggering market capitalization of 1.88 trillion baht.
The situation has drawn the attention of SET officials, prompting executives from Delta Electronics to schedule a meeting with the stock exchange next month.
Victor Cheng, CEO of Delta Thailand, has expressed concerns over the 'not healthy' escalation in share prices.
Cheng also pointed out that increasing share liquidity could alleviate some tension, given that only 23% of Delta's shares are publicly traded.
Trading at a valuation of approximately 78 times its 12-month forward earnings—well above the benchmark SET Index—Delta's share price surge has baffled analysts and executives alike.
Analysts are predicting a potential 25% drop from the recent highs, arguing that the share price is not reflective of the current market scenario, particularly highlighting challenges in the global EV sector despite promising prospects in artificial intelligence.
As part of its growth strategy, Delta Electronics is expanding its manufacturing capabilities.
The company is investing $300 million to build two additional factories—Wellgrow 3 and Wellgrow 4—in the Chachoengsao province, aimed at supporting increased production demands.
These facilities are expected to be operational by the third quarter of next year and will bolster Delta's capacity in power supply and thermal management products.
Cheng emphasized the company's strategic positioning to capitalize on the burgeoning artificial intelligence market in Southeast Asia, projecting significant growth in Thailand's data center sector.
Additionally, Delta is diversifying its production base with facilities in Slovakia, India, and North America, preparing for potential shifts in global trade dynamics.
Despite its strong market position, Delta Electronics has no immediate plans to raise capital through additional share sales.
The Taiwanese parent company, Delta Electronics Inc., continues to hold a dominant 63% stake in the Thai unit and appears committed to maintaining its investment, as Cheng noted.
Cheng reassures stakeholders that, despite the interconnectedness with its parent company, the financial operations of Delta Thailand remain independently managed, ensuring focused growth and operational stability amidst the fluctuating market landscape.
This unprecedented surge has led to increased scrutiny and trading curbs from the Stock Exchange of Thailand (SET).
The company's shares rocketed by 165% from March to November, elevating Delta to the status of Thailand's most valuable company with a staggering market capitalization of 1.88 trillion baht.
The situation has drawn the attention of SET officials, prompting executives from Delta Electronics to schedule a meeting with the stock exchange next month.
Victor Cheng, CEO of Delta Thailand, has expressed concerns over the 'not healthy' escalation in share prices.
Cheng also pointed out that increasing share liquidity could alleviate some tension, given that only 23% of Delta's shares are publicly traded.
Trading at a valuation of approximately 78 times its 12-month forward earnings—well above the benchmark SET Index—Delta's share price surge has baffled analysts and executives alike.
Analysts are predicting a potential 25% drop from the recent highs, arguing that the share price is not reflective of the current market scenario, particularly highlighting challenges in the global EV sector despite promising prospects in artificial intelligence.
As part of its growth strategy, Delta Electronics is expanding its manufacturing capabilities.
The company is investing $300 million to build two additional factories—Wellgrow 3 and Wellgrow 4—in the Chachoengsao province, aimed at supporting increased production demands.
These facilities are expected to be operational by the third quarter of next year and will bolster Delta's capacity in power supply and thermal management products.
Cheng emphasized the company's strategic positioning to capitalize on the burgeoning artificial intelligence market in Southeast Asia, projecting significant growth in Thailand's data center sector.
Additionally, Delta is diversifying its production base with facilities in Slovakia, India, and North America, preparing for potential shifts in global trade dynamics.
Despite its strong market position, Delta Electronics has no immediate plans to raise capital through additional share sales.
The Taiwanese parent company, Delta Electronics Inc., continues to hold a dominant 63% stake in the Thai unit and appears committed to maintaining its investment, as Cheng noted.
Cheng reassures stakeholders that, despite the interconnectedness with its parent company, the financial operations of Delta Thailand remain independently managed, ensuring focused growth and operational stability amidst the fluctuating market landscape.
