Stock Markets September 16, 2026 05:10 AM

TISCO Lifts Thai Electronic Components Sector to Overweight Citing Stronger 2H26 and Data-Centre Upside

Broker raises ratings on Delta and Hana, keeps KCE on hold as it rolls valuation framework forward

By Marcus Reed
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TISCO Securities moved its view on Thailand's electronic components sector from neutral to overweight, pointing to a brighter second half of 2026, clearer data-centre spending plans for 2027 and a recent pullback that it says has already priced in much of investor pessimism. The broker upgraded Delta Electronics Thailand and Hana Microelectronics to buy while retaining a hold on KCE Electronics, and updated target prices and its valuation horizon.

TISCO Lifts Thai Electronic Components Sector to Overweight Citing Stronger 2H26 and Data-Centre Upside
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Key Points

  • TISCO upgraded the Thai electronic components sector to overweight from neutral, citing a stronger 2H26 outlook and clearer data-centre capital spending for 2027.
  • Delta Electronics Thailand and Hana Microelectronics were upgraded to Buy with higher targets; KCE Electronics remained a Hold with an increased target.
  • TISCO rolled its valuation framework forward to 2027 using 2028 earnings, and named Hana and Delta as its top picks based on earnings momentum and hyperscaler spending trends.

TISCO Securities upgraded its overall rating for Thailand's electronic components sector to "overweight" from "neutral", saying the combination of a stronger outlook for the second half of 2026, improved visibility around data-centre capital spending and a marked recent underperformance had captured a large portion of market concerns.


Company-level moves

Among individual names, TISCO raised Delta Electronics Thailand to "buy" from "hold" and lifted its price target to 282 baht from 268 baht. Hana Microelectronics was also promoted to Buy from Hold, with a target increase to 61.50 baht from 50.50 baht. KCE Electronics kept a Hold recommendation, although its target price was increased to 60.25 baht from 55.50 baht.


Sector backdrop and valuation

The broker noted the sector had lagged the broader SET index by roughly 33% in the recent period. That underperformance, coupled with what TISCO describes as a stronger 2H26 outlook and data-centre capital spending plans for 2027 that came in ahead of expectations, underpinned the decision to move to an overweight stance.

TISCO also updated its valuation framework by rolling it forward to 2027 and applying 2028 earnings estimates in its analysis.


Delta Electronics Thailand

TISCO said Delta's recent 37% fall from its June 2026 peak appears to have priced in a range of potential negatives - including raw-material shortages, uncertainty regarding royalty fees and a bond issuance by its parent company, Delta Taiwan. The broker anticipates a gradual improvement in raw-material availability and expects price adjustments to take hold in early 2027, which should provide additional support to the business while demand remains robust.

On demand dynamics, TISCO expects heavy capital spending to continue among major hyperscalers and AI-focused companies. It estimated that commitments from Amazon, Microsoft, Alphabet, Oracle, Meta and SpaceX could top $1.25 trillion in 2027, a 47% increase from 2026, supporting demand for Delta's power-electronics products.


Hana Microelectronics

TISCO said it has increased conviction in Hana's AI-related revenue potential now that customer qualifications have been completed. The broker expects AI-related revenue to start in the third quarter of 2026. It also highlighted a new high-density printed circuit board programme for AI oscilloscope testing equipment that could become a significant growth driver, and noted an HDI PCB programme expected to support revenue during 2027.


KCE Electronics

KCE retained a Hold rating in TISCO's view. The broker indicated that further upside for KCE could come from additional capacity expansion and diversification beyond automotive applications into areas such as humanoid robotics. At the same time, TISCO cautioned that rising copper prices pose a longer-term margin risk and said that recent share-price gains already reflect some of the improved outlook.


Top picks and outlook

TISCO singled out Hana and Delta as its preferred names in the sector, citing Hana's stronger earnings momentum and Delta's exposure to sustained hyperscaler capital spending. The broker's sector upgrade reflects the combination of recent price weakness, improving demand signals for data-centre related products and its updated valuation horizon.

Risks

  • Rising copper prices identified as a longer-term margin risk, particularly for manufacturers like KCE that are exposed to PCB and related input costs - impacts the materials and electronics manufacturing sectors.
  • Delta faces potential downside that the market had already priced in, including raw-material shortages and uncertainty over royalty fees, as well as a bond issuance by its parent - relevant to corporate financing and supply-chain risk for power-electronics.
  • The sector's recent underperformance versus the SET index suggests market sentiment had been weak, and any rebound depends on the timing and execution of raw-material availability improvements and customer spending schedules - affects investor confidence across Thai electronics stocks.

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