Delta Thailand becomes Asia’s worst stock after $40 billion rout

BANGKOK - Just four months ago, shares of Delta Electronics (Thailand) 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 per cent in 2025, notching a steeper decline than any of the world’s electronics-part makers, according to data compiled by Bloomberg. The 2025 tumble wiped out about US$30 billion (S$40 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 (AI) craze has created excessive valuations. The slump, which began after shares reached a record high last November, accelerated after the stock exchange’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 Mr 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 makes components for automobiles and data centre chargers, among other products. Its stock shed 23 per cent on Feb 17 after reporting full-year net income that missed analysts’ estimates. The company this week disclosed a 54 per cent 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 per cent in 2025, in part thanks to higher income tax, said Mr Takeshima, who earlier in March nearly halved his price target on the stock. Thailand is set to introduce a 15 per cent global minimum corporate tax for multinationals, aligning with international standards. 

In addition, Thailand’s bourse last 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 per cent of the benchmark SET Index, down from around 12 per cent last November, Bloomberg-compiled data shows.

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 analyst Chananthorn Pichayapanupat from 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 per cent higher than the stock’s closing price on March 27. BLOOMBERG