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Delta Electronics Thailand (DET) PLC (SET:DELTA), 57.6% stake owned by Singapore-based Citibank Nominees Singapore Pte Ltd, as of March 4, 2016, is a Thailand-based company with core businesses in the manufacture and distribution of power supplies, electronic equipment and parts. The company operates three main business groups: power electronics group, which consists of power electronic products, mobile power products, and fan and thermal management products; energy management group, which includes power system products and industrial automation products, and smart green life group, which consists of networking system products, LED lighting and healthcare devices.
The company’s products are comprised of direct current to direct current (DC-DC) converters, power supplies for computers and networking, automotive power supplies, adapters for broadband, printers, games, industrial and power tools, cooling fans, electromagnetic interference (EMI) filters, solenoids, display products and light-emitting diode (LED) lights. DET factories are located in Thailand, India and Slovakia, while R&D centers are situated in 8 countries, including Germany, USA, Switzerland, UK, Romania, India, China and Thailand.
Delta Electronics Thailand said on July 26 that its second-quarter 2016 revenues, ending June 30, were 11.27 billion baht, down 1.69% year-on-year. The revenues missed the consensus estimate of 11.39 billion baht amongst 4 polled analysts following the company, according to the Financial Times. According to the company press release, revenues from the Mobile Power Solutions Business Group (MPBG) dropped 13% year-on-year, but were offset by a 25% year-on-year growth in the Fan & Thermal Management Product Business Group (FMBG). The company posted second-quarter 2016 diluted earnings of 1.07 baht per share, down 21.90% during the same quarter last year. The earnings per share were in line with the consensus estimate of the 5 analysts covering the company.
For 2015, the company reported a dividend of 3.1 baht per share, a 3.33% increase from 2014. The 9 analysts covering the company expect dividends of 3.05 baht per share for the upcoming fiscal year, representing a year-over-year decrease of 1.58%.
In April, Director Anusorn Muttaraid told Reuters that the company planned to invest about 500 to 600 million baht this year to buy land and build a new plant at Chennai, India, and up to 10 million baht to buy machinery for its second plant in Slovakia. Delta planned to spend another 800 million baht on research and development in 2016, he added, more than the 500 million baht it usually spends on R&D each year, as it aimed to create new high-margins products such as energy-saving escalators and elevators.
From our technical viewpoint, shares of Delta Electronics Thailand have been trading in a descending broadening wedge chart pattern since early 2015. The stock was rejected by the upper trendline resistance of the descending wedge at the 85 baht level. The next technical resistance level is 90 baht per share, if DET shares break out. The stock has been trading above the 50-day moving average since September and hence, there are plenty of supports including those at 72 and 66 baht per share.
According to the Financial Times, the consensus amongst 17 polled investment analysts covering Delta Electronics Thailand gave the company a Hold rating, with the median 12-month price target of 72.00 baht a share, as of October 14, 2016.
Disclosure: No position in any companies mentioned and no recommendation. |
