Krungsri Securities assessed DELTA shares after a Bloomberg report indicated that Delta Electronics (Taiwan), the parent company of DELTA (Thailand), is considering raising $1.5 billion through the issuance of zero-interest convertible bonds exchangeable into DELTA (Thailand) shares. The offering is split into two tranches. The first tranche raises $500 million through convertible bonds maturing in 2027, and the second tranche is a further $1 billion in convertible bonds maturing in 2031. The conversion price for DELTA (Thailand) shares is set at 15-20% above the reference price for the 2027 bonds and 30-40% for the 2031 bonds. Delta Taiwan stated that the proceeds will be used to strengthen liquidity for working capital and support future business expansion. The research team estimates that the share dilution impact from the first tranche will be only 0.4% and from the second tranche 0.7-0.8%. Combined, share dilution will be 1.2%, and there will be no decline in value because the conversion price is higher than DELTA's current share price. Delta Taiwan previously announced the issuance of similar convertible bonds worth $525 million maturing in 2030 on January 14, 2025, convertible into DELTA (Thailand) shares at a conversion price of 187.6 baht. The research team maintains its Buy recommendation with an unchanged target price of 320 baht, and views that dilution concerns have already been partly reflected, leaving relatively limited downside risk for the current share price.
Delta Electronics (Thailand) Public Company LimitedTaiwanese parent plans $1.5B zero-interest convertible bonds exchangeable into DELTA (Thailand) shares, implying ~1.2% dilution but conversion prices above current price; Krungsri keeps Buy with 320 baht target.
