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Foreign brokerage upbeat about Delta Electronics' bottom line

Foreign brokerage upbeat about Delta Electronics' bottom line

A U.S.-based brokerage said Thursday that it is upbeat about the bottom line of Delta Electronics Inc., a Taiwan-based power management system supplier, urging investors to buy the stock.

In a research note, the brokerage said that it has added Delta Electronics into its buy list and issued a target price of NT$229 (US$6.98) on the stock over the next 12 months. It was the first time for the U.S. brokerage to track Delta Electronics.

Under Taiwanese regulations, the names of foreign brokerages cannot be reported when they give price forecasts for specific stocks.

On Thursday, shares of Delta Electronics gained 1.59 percent to close at NT$160.00 after the release of the research note as investors were encouraged by the high target price issued by the U.S. brokerage, dealers said.

The stock outperformed the local main bourse, where the weighted index ended down 0.02 percent in consolidation mode.

Based on the target price of NT$229, Delta Electronics shares are expected to rise by more than 40 percent in the future.

Delta Electronics has been included into the brokerage's Asia Pacific Buy List as well as the Asia Pacific Conviction Buy List.

The brokerage said that Delta Electronics is expected to enjoy a 13 percent increase in the compound annual growth rate (CAGR) during the 2015-2018 period, higher than the 3 percent recorded during the 2010-2015 period.

The 13 percent CAGR is higher than the average of 4 percent posted by Delta Electronics' global peers over the same period, the brokerage said.

On the back of the company's efforts in developing power management systems for a higher share in the global market, the brokerage said that the Taiwanese manufacturer is expected to rake in higher revenue.

In addition, Delta Electronics is expected to benefit from its development in electronics components and automation equipment to further boost its sales, the brokerage said.

It added that Delta Electronics could post NT$7.61 in earnings per share in 2015 and its profitability is expected to improve to NT$8.45 in 2016 and NT$9.84 in 2017. (By Han Ting-ting and Frances Huang)

Updated : 2021-09-28 14:30 GMT+08:00