Delta Electronics Inc

2308: XTAI (TWN)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	TWD 566.00	Shppt	Fvbfwhkt

Delta Electronics Earnings: Look Elsewhere for AI; Automation and EVs Are Dragging Profitability

Phelix Lee

Aug 2, 2024

We maintain our fair value estimate of TWD 33 for narrow-moat Delta Electronics after minor changes to our model. Shares appear overvalued as the bullish outlook in artificial intelligence servers is not enough to offset sluggish automation and electric vehicle outlook. At 23 times 2025 P/E, Delta is trading above its five-year historical average of 20 times. The stock is pricing in excessive gross margin expansion, given this quarter’s figure is boosted by accounting practices and a lack of EV-related growth, which is dilutive.

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