Before releasing its Q2/2026 financial results, Delta Electronics (Thailand) Public Company Limited (DELTA) was closely watched by investors, following a notable price surge driven by expectations of growth from its business benefiting from global AI and datacenter investments.
However, although the latest Q2/2026 results showed year-on-year growth in both revenue and profit, the net profit figure was significantly below analysts' expectations.
This led to immediate heavy selling of DELTA shares at market open, significantly pressuring the SET Index since DELTA is the largest market-cap stock on the Thai stock exchange.
DELTA reported Q2/2026 earnings to the Stock Exchange of Thailand, with sales revenue of 65,191 million baht, up 46.5% year-on-year and 6.2% quarter-on-quarter.
This growth was supported by strong demand for Power Electronics products and IT infrastructure solutions related to AI and global datacenter investments.
Net profit was 6,075 million baht, up 31.3% from last year but down 33.1% from the previous quarter despite robust revenue growth, as the company faced several pressures such as:
Prior to the earnings release, DELTA shares had risen sharply, closing at 24 July 2026.
This rise reflected investor optimism about AI business growth and set high market expectations for earnings.
However, after the earnings announcement, investors sold shares immediately at market open. By late morning, DELTA shares stood at 289.00 baht, down 18.00 baht or 5.86% from the previous day, negatively impacting the SET Index by about 17.82 points. The index was at 1,632.48 points, down 11.91 points or 0.72%.
Krungsri Securities analysts noted that Q2/2026 net profit of 6,075 million baht was 23% below their research estimate and 30% below market expectations, while normalized profit was 5,527 million baht, 36% below forecasts.
The main reasons were a gross margin decline to 26.8% from 31.7% in the prior quarter, and higher-than-expected SG&A expenses, especially royalties paid to the parent and costs from chip shortages.
They also expect DELTA's share price volatility to pressure the SET Index, as DELTA has the largest market cap on the exchange, accounting for about 18.5% of total market value, potentially triggering selling in the electronic components sector as well.
However, outflows from DELTA may rotate into large-cap stocks in banking, telecommunications, power plants, hotels, and hospitals, which could somewhat ease overall market pressure.
Krungsri Securities maintains a "Reduce" rating on DELTA shares with a 2027 price target of 265 baht.
This is because the current share price still reflects overly optimistic expectations, mainly due to two factors: Q2/2026 earnings missing forecasts and sensitivity analysis showing the company must sustain 70% revenue growth from its AI-related business throughout this and next year, while driving average profit growth of 50% in 2026–2027.
They view these targets as very challenging, and failure to meet market expectations could keep share price under pressure going forward.
Additionally, earnings face risks from raw material costs and chip shortages; if these issues persist into Q3/2026, profit forecasts may be revised downward.
Sources: DELTA, SET, KSS.
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