Just four months ago, Delta Electronics (Thailand) Plc’s shares were outpacing global peers, prompting a series of moves from Thai market authorities to halt the rally. Now, the stock is in a stark reversal.
Its shares have cratered more than 50% in 2025, notching a steeper decline than any of the world’s electronic-part makers worth at least $500 million, according to data compiled by Bloomberg. This year’s tumble wiped out about $30 billion of Delta’s market value and made the stock the biggest laggard on the MSCI Asia Pacific Index.
The slide for what was once Thailand’s most valuable stock is an extreme example of how the artificial intelligence craze has created excessive valuations. The slump, which began after shares reached a record high in November, accelerated after the Stock Exchange of Thailand’s proposed index weighting curbs and lower-than-expected earnings.
The company faces “key headwinds to earnings from rising cost structure” and slowing growth, said Yugi Takeshima, an analyst at Maybank Securities (Thailand). The AI boom is unlikely to create significant growth for Delta in 2025, according to Mr Takeshima, who has a sell recommendation on the stock.
The unit of Taiwan’s Delta Electronics Inc makes components for automobiles and data centre chargers, among other products. Its stock shed 23% on Feb 17 after reporting full-year net income that missed analysts’ estimates. The company this week disclosed a 54% slide in fourth-quarter earnings and clarified the reasons for its poor results.
Delta’s profit outlook could further weigh on shares. Core earnings are expected to drop 5% in 2025 in part thanks to higher income tax, said Mr Takeshima, who earlier this month nearly halved his price target on the stock. The government will likely raise the company’s average income tax rate to 15% from about 3% to 5% historically, he said.
In addition, Thailand’s bourse in November set restrictions on Delta’s stock trading in an effort to limit excessive speculation. It also proposed a cap on the weighting of single stocks on some of its main indexes after Delta dominated several gauges during its share surge. Delta currently makes up about 6% of the benchmark SET Index, down from around 12% in November, Bloomberg-compiled data shows.
Delta’s investor relations department didn’t respond to an email seeking for comment.
Still, Delta’s stock has dropped to an attractive valuation amid optimism that greater AI server adoption could boost demand for the firm’s electronics products, according to Chananthorn Pichayapanupat, an analyst at KGI Securities (Thailand).
The stock is now trading at about 45 times forward earnings, below its five-year average of 55, according to data compiled by Bloomberg. Analysts’ average 12-month price target is 9.5% higher than Thursday’s closing price.
