Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

Delta Electronics Thailand  / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/delta-electronics-thailand-pcl-98806732-8ac4-42b2-a565-ba32673d1e5a" target="_blank" data-smartkarma-citation="entities:20912:1" rel="noopener">Delta Electronics Thailand (DELTA TB)</a> still trades at a higher market cap than <a href="https://www.smartkarma.com/entities/delta-electronics-inc" target="_blank" data-smartkarma-citation="entities:12688:1" rel="noopener">Delta Electronics (2308 TT)</a> though the gap has been narrowing over the last few months.</li>
<li>
<a href="https://www.smartkarma.com/entities/delta-electronics-thailand-pcl-98806732-8ac4-42b2-a565-ba32673d1e5a" target="_blank" data-smartkarma-citation="entities:20912:1" rel="noopener">Delta Electronics Thailand (DELTA TB)</a>'s real float is around 18% and foreign investors hold 94.07% of the shares outstanding.</li>
<li>
<a href="https://www.smartkarma.com/entities/delta-electronics-thailand-pcl-98806732-8ac4-42b2-a565-ba32673d1e5a" target="_blank" data-smartkarma-citation="entities:20912:1" rel="noopener">Delta Electronics Thailand (DELTA TB)</a> has traded weak following the placement in October and there could be further downside versus <a href="https://www.smartkarma.com/entities/delta-electronics-inc" target="_blank" data-smartkarma-citation="entities:12688:1" rel="noopener">Delta Electronics (2308 TT)</a>. </li>
</ul>



Delta Electronics Thailand (DELTA TB) still trades at a higher market cap than Delta Electronics (2308 TT) though the gap has been narrowing over the last few months.

Delta Electronics Thailand (DELTA TB)'s real float is around 18% and foreign investors hold 94.07% of the shares outstanding.

Delta Electronics Thailand (DELTA TB) has traded weak following the placement in October and there could be further downside versus Delta Electronics (2308 TT). 


Delta Electronics (DELTA TB / 2308 TT): More Downside from Here

Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Zero One

Founded in 2015, Zero One produces independent investment research and provides corporate finance advisory services with a focus on both listed and private technology companies. Founder Vincent Fernando has over 20 years of experience in US and Asia capital markets.

Independent Investment Research

Equity Bottom-Up

Delta Electronics Thailand  / Equity Bottom-Up

<ul>
<li>Delta Thailand vs. Taiwan valuation differential has returned to an historically extreme level.</li>
<li>For 2024E &amp; 2025E growth expectations continue to be similar for the two companies, yet Delta Thailand's FY2024E PER is 50x while Delta Taiwan's is 20x.</li>
<li>We see substantial relative value in Delta Taiwan and expect likely reversion of relative valuation due to latest return to historically extreme mismatch.</li>
</ul>


Delta Thailand vs. Taiwan valuation differential has returned to an historically extreme level.
For 2024E &amp; 2025E growth expectations continue to be similar for the two companies, yet Delta Thailand's FY2024E PER is 50x while Delta Taiwan's is 20x.
We see substantial relative value in Delta Taiwan and expect likely reversion of relative valuation due to latest return to historically extreme mismatch.


Delta Taiwan Vs. Thailand Monitor: Parent Could Sell More of Its Stake; Thai 50x PER Vs. Taiwan 20x

<ul>
<li>
<a href="https://www.smartkarma.com/entities/delta-electronics-thai-pcl" target="_blank" data-smartkarma-citation="entities:20912:1" rel="noopener">Delta Electronics Thai (DELTA TB)</a> has been added to the Market Surveillance Measure List twice in the last few months. That increases the probability of index deletion in December.</li>
<li>Given the big turnover every time <a href="https://www.smartkarma.com/entities/delta-electronics-thai-pcl" target="_blank" data-smartkarma-citation="entities:20912:1" rel="noopener">Delta Electronics</a> is added to and deleted from the index, there could be another go at weighting the <a href="https://www.smartkarma.com/entities/stock-exchange-of-thailand-set-50-index" target="_blank" data-smartkarma-citation="entities:31493:1" rel="noopener">SET50 Index</a> by free-float market cap.</li>
<li>Deletion from the index will have a big impact on <a href="https://www.smartkarma.com/entities/delta-electronics-thai-pcl" target="_blank" data-smartkarma-citation="entities:20912:1" rel="noopener">Delta Electronics Thai (DELTA TB)</a> and the passive selling could help narrow the gap with <a href="https://www.smartkarma.com/entities/delta-electronics-inc" target="_blank" data-smartkarma-citation="entities:12688:1" rel="noopener">Delta Electronics (2308 TT)</a>.</li>
</ul>



Delta Electronics Thai (DELTA TB) has been added to the Market Surveillance Measure List twice in the last few months. That increases the probability of index deletion in December.
Given the big turnover every time Delta Electronics is added to and deleted from the index, there could be another go at weighting the SET50 Index by free-float market cap.
Deletion from the index will have a big impact on Delta Electronics Thai (DELTA TB) and the passive selling could help narrow the gap with Delta Electronics (2308 TT).


Delta Electronics (DELTA TB): Potential SET50 Index Delete in December?

<ul>
<li>Delta Thailand shares haven't recovered from their sharp drop at the end of September, which happened after the parent Delta Taiwan sold a stake in the Thai subsidiary.</li>
<li>Delta Thailand shares fell to the point that its market cap finally became smaller than Delta Taiwan, for the first time since December 2022.</li>
<li>Delta Thailand's market cap should be substantially smaller than its parent Delta Taiwan. We analyze what history tells us the further relative downside for Delta Thailand could be.</li>
</ul>


Delta Thailand shares haven't recovered from their sharp drop at the end of September, which happened after the parent Delta Taiwan sold a stake in the Thai subsidiary.
Delta Thailand shares fell to the point that its market cap finally became smaller than Delta Taiwan, for the first time since December 2022.
Delta Thailand's market cap should be substantially smaller than its parent Delta Taiwan. We analyze what history tells us the further relative downside for Delta Thailand could be.


Delta Taiwan Vs. Thailand Monitor: Market Cap Metric Breaches Key Level For 1st Time Since Dec 2022

<ul>
<li>The valuation divergence between Delta Electronics Thai (DELTA TB) and its parent Delta Electronics (2308 TT) has hit a new extreme.</li>
<li>Delta Thailand surged 9.3% Thursday on no news, even prompting the Thailand Stock Exchange to query the company.</li>
<li>Delta Taiwan's stake in Delta Thailand is now worth more than all of Delta Taiwan. The valuation divergence would seem unsustainable, however when things revert is uncertain.</li>
</ul>


The valuation divergence between Delta Electronics Thai (DELTA TB) and its parent Delta Electronics (2308 TT) has hit a new extreme.
Delta Thailand surged 9.3% Thursday on no news, even prompting the Thailand Stock Exchange to query the company.
Delta Taiwan's stake in Delta Thailand is now worth more than all of Delta Taiwan. The valuation divergence would seem unsustainable, however when things revert is uncertain.


Delta Taiwan Vs. Thailand Monitor: Valuation Divergence Hits a New Extreme

Thailand

Delta Electronics (Thailand) PCL designs and manufactures electronic equipment. The Company produces power systems for telecommunications, medical equipment, and industrial automation.  Delta also produces fans, electromagnetic interference filters, and solenoids.

Delta Electronics Thailand (DELTA TB)

Delta Electronics (DELTA TB / 2308 TT): More Downside from Here

DELTA TB has underperformed 2308 TT over the last few months but still trades richer on all valuation metrics. There could be further...

Brian Freitas

Delta Taiwan Vs. Thailand Monitor: Parent Could Sell More of Its Stake; Thai 50x PER Vs. Taiwan 20x

We see substantial relative value in Delta Taiwan and expect a likely reversion of valuation due to 1) the return of an historically extreme...

Vincent Fernando, CFA

Delta Electronics (DELTA TB): Potential SET50 Index Delete in December?

DELTA TB has been added to the Market Surveillance Measure List and this increases the probability of SET50 deletion in December. That could help...

Brian Freitas

Delta Taiwan Vs. Thailand Monitor: Market Cap Metric Breaches Key Level For 1st Time Since Dec 2022

Delta Thailand's market cap should be substantially smaller than its parent Delta Taiwan. We analyze what history tells us the further relative...

Vincent Fernando, CFA

Delta Taiwan Vs. Thailand Monitor: Valuation Divergence Hits a New Extreme

Delta Taiwan's stake in Delta Thailand is now worth more than all of Delta Taiwan. The valuation divergence would seem unsustainable, however when...

Vincent Fernando, CFA