Delta Thailand Becomes Asia’s Worst Stock After $30 Billion Rout

Delta Electronics (Thailand) PCL, once the darling of the Thai stock market, has seen its fortunes reverse dramatically. The company's shares have plummeted more than 50% in 2025, wiping out approximately $30 billion in market value and making it the worst-performing stock on the MSCI Asia Pacific Index. This steep decline is a stark reminder of the volatility that can accompany rapid growth and excessive valuations, particularly in the context of the artificial intelligence (AI) boom.

The roots of Delta Thailand's troubles can be traced back to November 2024, when the stock reached a record high. The company, which makes components for automobiles and data center chargers, among other products, was riding high on the AI craze. However, the euphoria was short-lived. The Thai government, concerned about excessive speculation, implemented a series of measures to curb the stock's meteoric rise. These included restrictions on stock trading and proposed caps on the weighting of single stocks in key indexes.

The regulatory interventions had an immediate impact. Delta's weighting in the benchmark SET Index dropped from around 12% to about 6%. The stock exchange's proposed index weighting curbs and lower-than-expected earnings accelerated the slump, as investors reassessed the company's valuation. The company's full-year net income missed analysts' estimates, and its fourth-quarter earnings slid by 54%. The Thai government's decision to raise the company's average income tax rate to 15% from about 3% to 5% historically further weighed on the stock.



The decline in Delta Thailand's stock is not just a story of regulatory intervention and lower earnings. It is also a tale of the broader challenges facing the electronics industry. The AI boom, which initially drove Delta's stock to record highs, has not translated into significant growth for the company. Analysts like Yugi Takeshima of Maybank Securities (Thailand) Pcl have a sell recommendation on the stock, citing key headwinds to earnings from a rising cost structure and slowing growth. The company's profit outlook for 2025 is bleak, with core earnings expected to drop 5% due to higher income tax and other factors.

The situation is further complicated by weak demand for electric vehicles, a key market for Delta's mobility segment. The company reported a 78% fall in fourth-quarter profits from the same period in 2023, largely due to this weak demand. This has raised questions about the sustainability of Delta's business model and its ability to navigate the challenges posed by the AI boom and regulatory interventions.

Despite the challenges, there are glimmers of hope. Some analysts, like Chananthorn Pichayapanupat of KGI Securities (Thailand) Pcl, believe that Delta's stock has dropped to an attractive valuation. The stock is now trading at about 45 times forward earnings, below its five-year average of 55. Analysts' average 12-month price target is 9.5% higher than Thursday's closing price, suggesting that there may be room for a rebound.



The story of Delta Thailand is a cautionary tale for investors and companies alike. It highlights the risks of excessive valuations and the importance of regulatory oversight in preventing market bubbles. It also underscores the challenges facing the electronics industry as it navigates the AI boom and other macroeconomic trends. As Delta Thailand seeks to rebuild its fortunes, it will need to address the headwinds to earnings, improve its profitability, and adapt to the changing market dynamics. Only then can it hope to regain its status as one of Thailand's most valuable stocks.