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

Index Rebalance

Delta Electronics Thailand  / Index Rebalance

<ul>
<li>On 4 February, the SET floated a consultation paper on capping stocks in 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">Stock Exchange of Thailand SET 50 Index (SET50 INDEX)</a> at 10%.</li>
<li>The move was aimed at <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> since it was the only stock with an index weight higher than 10%.</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 slid since then and at the current weight of 9.27% will not need to be capped. The market has adjusted for it.</li>
</ul>


On 4 February, the SET floated a consultation paper on capping stocks in the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) at 10%.
The move was aimed at Delta Electronics Thailand (DELTA TB) since it was the only stock with an index weight higher than 10%.

Delta Electronics Thailand (DELTA TB) has slid since then and at the current weight of 9.27% will not need to be capped. The market has adjusted for it.


SET50 Index: Market Moves Adjust for Consultation Proposal; DELTA in the Crosshairs (Again)

Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

Equity Bottom-Up

Delta Electronics Thailand  / Equity Bottom-Up

<ul><li>We maintain a Neutral rating. Despite the sharp decline in the share price following the disappointing earnings, there is little upside compared to our new fair value.</li><li>This is offset by limited downside risk from a tactical perspective.</li><li>We revise down our fair value to Bt89.25 (previously Bt112.00), primarily due to the lower 2025-27E earnings forecasts, reflecting stricter margin assumptions, while the required return remains almost unchanged at 1.8%.</li></ul>

We maintain a Neutral rating. Despite the sharp decline in the share price following the disappointing earnings, there is little upside compared to our new fair value.This is offset by limited downside risk from a tactical perspective.We revise down our fair value to Bt89.25 (previously Bt112.00), primarily due to the lower 2025-27E earnings forecasts, reflecting stricter margin assumptions, while the required return remains almost unchanged at 1.8%.

Delta Electronics (Thailand) - Challenging Path Ahead

<ul><li>We switch to a Neutral rating (previously Underperform) as the tactical outlook has improved to very limited downside risk, compared to the previous view of limited upside risk.</li><li>The stock price remains stretched compared to the fair value of Bt112.00, based on a required return of 1.7%.</li><li>Meanwhile, EPS growth is projected at a CAGR of 10.8% during 2025-27E, in line with the industry average.</li></ul>

We switch to a Neutral rating (previously Underperform) as the tactical outlook has improved to very limited downside risk, compared to the previous view of limited upside risk.The stock price remains stretched compared to the fair value of Bt112.00, based on a required return of 1.7%.Meanwhile, EPS growth is projected at a CAGR of 10.8% during 2025-27E, in line with the industry average.

Delta Electronics (Thailand) - 4Q24 Net Profit Significantly Below Expectations

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

<ul>
<li>Delta Thailand Weakness Amid Block Trade and Convertible Bond News</li>
<li>Delta Taiwan Offering Convertible Bonds, Convertible into Delta Thailand Shares</li>
<li>Delta Thailand Still Overvalued Relative to Delta Taiwan -- Short Delta Thailand vs. Long Delta Taiwan</li>
</ul>


Delta Thailand Weakness Amid Block Trade and Convertible Bond News
Delta Taiwan Offering Convertible Bonds, Convertible into Delta Thailand Shares
Delta Thailand Still Overvalued Relative to Delta Taiwan -- Short Delta Thailand vs. Long Delta Taiwan


Delta Taiwan Vs. Thailand Monitor: Convertible Sale; Delta Thailand Should Underperform Vs Parent Co

<ul><li>Delta International Holding Limited (DIH), a subsidiary of Delta Electronics (Taiwan) and a 14.7% shareholder in DELTA, plans to issue zero-coupon exchangeable bonds worth USD525mn to enhance working capital and support future expansion.</li><li>The bonds have a maturity date in 2030 and can be converted into DELTA shares at an initial price of Bt187.6/share (calculated at the reference price plus 40%, implying a reference price of Bt134), which may be subject to adjustment according to the terms and conditions of the bonds.</li><li>The aforementioned transaction regarding the issuance of bonds by DIH has no effect on DELTA's current policies or business operations.</li></ul>

Delta International Holding Limited (DIH), a subsidiary of Delta Electronics (Taiwan) and a 14.7% shareholder in DELTA, plans to issue zero-coupon exchangeable bonds worth USD525mn to enhance working capital and support future expansion.The bonds have a maturity date in 2030 and can be converted into DELTA shares at an initial price of Bt187.6/share (calculated at the reference price plus 40%, implying a reference price of Bt134), which may be subject to adjustment according to the terms and conditions of the bonds.The aforementioned transaction regarding the issuance of bonds by DIH has no effect on DELTA's current policies or business operations.

DELTA TB - Shareholders (DIH) Issued Convertible Bonds Exchangeable for DELTA Shares

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.

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Delta Electronics Thailand (DELTA TB)

SET50 Index: Market Moves Adjust for Consultation Proposal; DELTA in the Crosshairs (Again)

The SET is looking to cap stocks in the SET50/SET100 at 10% of the index weight. This is another attempt to curb DELTA's sway on the index. The...

Brian Freitas

Delta Electronics (Thailand) - Challenging Path Ahead

We maintain a Neutral rating. Despite the sharp decline in the share price following the disappointing earnings, there is little upside compared to...

Krungthai XSpring

Delta Electronics (Thailand) - 4Q24 Net Profit Significantly Below Expectations

We switch to a Neutral rating (previously Underperform) as the tactical outlook has improved to very limited downside risk, compared to the...

Krungthai XSpring

Delta Taiwan Vs. Thailand Monitor: Convertible Sale; Delta Thailand Should Underperform Vs Parent Co

Delta Thailand's weakness and overvaluation compared to Delta Taiwan prompts a short on Delta Thailand and long on Delta Taiwan strategy.

Vincent Fernando, CFA

DELTA TB - Shareholders (DIH) Issued Convertible Bonds Exchangeable for DELTA Shares

Delta International Holding Limited (DIH), a subsidiary of Delta Electronics (Taiwan) and a 14.7% shareholder in DELTA, plans to issue zero-coupon...

Krungthai XSpring

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

SET50 Index: Market Moves Adjust for Consultation Proposal; DELTA in the Crosshairs (Again)

The SET is looking to cap stocks in the SET50/SET100 at 10% of the index weight. This is another attempt to curb DELTA's sway on the index. The...

Brian Freitas

Delta Electronics (Thailand) - Challenging Path Ahead

We maintain a Neutral rating. Despite the sharp decline in the share price following the disappointing earnings, there is little upside compared to...

Krungthai XSpring

Delta Electronics (Thailand) - 4Q24 Net Profit Significantly Below Expectations

We switch to a Neutral rating (previously Underperform) as the tactical outlook has improved to very limited downside risk, compared to the...

Krungthai XSpring

Delta Taiwan Vs. Thailand Monitor: Convertible Sale; Delta Thailand Should Underperform Vs Parent Co

​Delta Thailand's weakness and overvaluation compared to Delta Taiwan prompts a short on Delta Thailand and long on Delta Taiwan strategy.

Vincent Fernando, CFA

DELTA TB - Shareholders (DIH) Issued Convertible Bonds Exchangeable for DELTA Shares

Delta International Holding Limited (DIH), a subsidiary of Delta Electronics (Taiwan) and a 14.7% shareholder in DELTA, plans to issue zero-coupon...

Krungthai XSpring

Delta Thailand's weakness and overvaluation compared to Delta Taiwan prompts a short on Delta Thailand and long on Delta Taiwan strategy.