Summary · why it matters
Shares of Delta Electronics (Thailand) Public Company Limited, or DELTA, rose 1.29% to 236.00 baht at 10:06 a.m. on September 16, 2026, after the company announced that Delta Electronics International (Singapore) Pte. Ltd., a shareholder and subsidiary of Delta Electronics Inc., or Delta Taiwan, plans to issue and offer two tranches of zero-coupon overseas exchangeable bonds convertible into DELTA shares with a combined value of $1.5 billion on or about September 21, 2026. The offering comprises Tranche A, a one-year bond worth $500 million maturing on September 21, 2027, with an initial exchange price of 266.80 baht per share, 15% above the reference price, and Tranche B, a five-year bond worth $1 billion maturing on September 21, 2031, with an initial exchange price of 301.60 baht per share, 30% above the reference price. If bondholders exercise all exchange rights, approximately 172.09 million DELTA shares would be used to support the exchange, or about 1.38% of total issued shares. These would be existing shares held by Delta Taiwan, so the number of DELTA shares would not increase and there would be no direct impact on earnings per share from capital increase, or EPS dilution, though Delta Taiwan's stake in DELTA would fall from 62.3% to 60.9%. Analysts at Kasikorn Securities Public Company Limited, Asia Plus Securities Public Company Limited, and Bualuang Securities Public Company Limited assess that this exchangeable bond issuance could pressure DELTA's share price in the short term from the risk of share overhang and the use of DELTA shares held by the parent company for financial value creation, or share monetization. Bualuang Securities said this risk is likely higher than the exchangeable bond issuance in January 2025, since the value of this bond issue rose from $525 million to $1.5 billion, an increase of about 2.86 times. Asia Plus Securities said the exchange price could become a resistance level for the share price, and if selling pressure is similar to the previous exchangeable bond issuance, every 1 baht decline in DELTA's share price could push the Thai stock market index down by about 1 point. Suwat Sinsadok, managing director of Global Securities Company Limited, expects DELTA's share price to fall in the short term to 230 baht before recovering again, supported by the profit outlook for the third quarter of 2026, which is expected to rise more than 30-50% from the same period last year, with continued growth expected in the fourth quarter of 2026 and in 2027. He set a target price of 330 baht. KGI Securities (Thailand) Public Company Limited said in a research note dated September 16, 2026, that if bondholders exercise all exchange rights, about 172 million DELTA shares would be used, representing 1.4% of total issued and paid-up shares and 2.2% of the DELTA shares currently held by Delta Taiwan, split into about 62 million shares from Tranche A and about 110 million shares from Tranche B. The initial exchange prices of 266.80 baht and 301.60 baht are about 6% and 20% above DELTA's closing price on September 14, 2026, respectively, which is lower than the 26% premium from the previous closing price used in the earlier exchangeable bond issuance, potentially increasing the chance that bondholders will decide to exercise their exchange rights. KGI Securities assesses that the issuance could pressure confidence in DELTA's share price in the short term, considering the movement after Delta Taiwan's previous exchangeable bond issuance in early 2025, when DELTA's share price fell 21%, 54%, and 22% after one month, three months, and six months, respectively, before recovering above the reference price in the ninth month. However, the significantly larger size of the latest bond issue compared with the previous one reflects Delta Taiwan's business expansion plan, with capital expenditure for 2026-2027 set at 70,000-80,000 million Taiwan dollars, and is consistent with the view of KGI Taiwan that the AI server supply chain is entering a technology upgrade cycle, which could indirectly benefit DELTA through increased orders, since revenue at the two companies has a correlation of 0.9. In 2025, when Delta Taiwan issued a similar exchangeable bond, Delta Taiwan's sales and net profit rose 31% and 71% from the previous year, respectively. KGI Securities therefore maintained its Outperform rating on DELTA and raised its end-2027 target price to 320 baht, based on a price-to-earnings ratio, or PER, of 90 times, about one standard deviation above DELTA's historical average.
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KGI Securities (Thailand) Public Company Limited
Delta Electronics (Thailand) Public Company Limited