Delta Electronics, Inc.: Better-than-feared 2Q26 print, resumed momentum into 2H26; OW

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Delta Electronics, Inc.: Better-than-feared 2Q26 print, resumed momentum into 2H26; OW

J P M O R G A N Asia Pacific Equity Research

29 July 2026

Delta Electronics, Inc. Overweight

2308.TW, 2308 TT

Better-than-feared 2Q26 print, resumed momentum into Price (29 Jul 26):NT$1,495.00

2H26; OW Price Target (Jun-27):NT$2,600.00

Post Taiwan market close on 29 July, Delta reported a largely in-line 2Q26 earnings Technology - Hardware

ACprint with better-than-feared GMs. Key highlights were: Albert Hung

(886-2) 2725-9875

• Slight 2Q26 earnings beat despite sequential margin decline. Delta’s 2Q26 albert.hung@jpmchase.com

GM came in at 35.6% vs. JPMe/BBGe of 36.1%/36.4%. We attribute the J.P. Morgan Securities (Taiwan) Limited/ J.P.

sequential GM decline (-1.36ppt) to raw material price increases and potential MorganMorgan SecuritiesBroking (Hong(AsiaKong)Pacific)LimitedLimited/ J.P.

inventory provisioning related to delayed server power orders amid AC Gokul Hariharan

component shortages. That said, we believe the 2Q26 GM print was still above (852) 2800-8564

the recently lowered Street expectations, particularly after the Delta Thailand gokul.hariharan@jpmorgan.com

(DELTA TB; covered by Samuel Tan) earnings miss (2Q GM down ~5ppt J.P. Morgan Securities (Asia Pacific) Limited/ J.P.

Morgan Broking (Hong Kong) Limited

QoQ, link). 2Q26 opex was higher than expected, up ~37% YoY, likely driven

Anthony Leng

by higher R&D spend, logistic fees hike and increased employee bonuses.

(886-2) 2725-9240

Non-OP gains came in better than expected, likely on FX gains, while minority anthony.leng@jpmorgan.com

interest was below Street estimates due to weaker earnings at Delta Thailand. J.P. Morgan Securities (Taiwan) Limited

Net-net, bottom-line results were ~5% above consensus.