Delta Electronics (Thailand): 2Q26 miss leaves margin recovery uncertain

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Delta Electronics (Thailand): 2Q26 miss leaves margin recovery uncertain

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Delta Electronics (Thailand)

2Q26 miss leaves margin recovery

uncertain

Maintain Rating: UNDERPERFORM | PO: 285.00 THB | Price: 307.00 THB

2Q26 earnings missed on much weaker margins 27 July 2026

DELTA reported 2Q26 pre-exceptional profit of Bt5.55bn, 31% below our forecast and Equity

39% below consensus. The miss was driven by weaker-than-expected gross margin,

reflecting inventory write-downs, higher royalty expenses and weaker underlying product Suppapong Iemkongaek, CFA, CMT ^^^ Research Analyst

profitability. Kiatnakin Phatra Securities

+66 2 305 9925

Procurement continues to outpace cost of sales suppapong.iemk@kkpfg.com

Net inventory rose another 25% QoQ, while inventory turnover deteriorated further.

Together with the sharp increase in trade payables, this suggests procurement remained

Stock Dataelevated relative to cost of sales. Even if procurement costs improve, the larger

inventory balance means margin benefits are likely to be recognized only gradually. Price 307.00 THB

Part of the cost pressure appears structural PriceDate EstablishedObjective 11-Jun-2026285.00 THB

With AI-related products now accounting for nearly 60% of revenue, royalty expenses Investment Opinion C-3-7

are likely to remain elevated as products using Delta Taiwan’s technology become a 52-Week Range 139.50 THB-372.00

larger part of the sales mix. Management’s segment EBIT margin disclosure also THB

suggests that not all AI-related products generate superior profitability, implying AI Mrkt Val / Shares Out (mn) 113,752 USD /

growth is not necessarily margin-accretive. 12,473.8

We maintain Underperform MarketAverageValueDaily (mn)Value (mn) 3,829,462142.01 USDTHB