Investors heavily dumped shares of Delta Electronics (DELTA) and Airports of Thailand (AOT) on concerns over the companies' specific issues, pressuring the overall Stock Exchange of Thailand (SET) as the two firms are big cap stocks of the local bourse, analysts say.
Shares of DELTA, the biggest company on the SET in terms of market capitalisation, dipped 25.2% or 28.50 baht to close at 84.50 baht by midday Monday with trading value as high as 6.16 billion baht. The decrease was mainly caused by the fact that its revenue in last year's fourth quarter was significantly below the market's forecast.
According to the SET, DELTA's share price has declined 31.5% over the past three months. Its market cap gradually decreased from 1.73 trillion baht on Jan 2 to 1.41 trillion as of Feb 14 -- a loss of more than 320 billion.
AOT, meanwhile, fell 7.45% or 3.50 baht in the morning session on Monday to 43.50 baht around noon as King Power International, its major customer, requested the postponement of the minimum annual guarantee payment for the operation of duty-free shops at Bangkok's Suvarnabhumi and Don Mueang airports, as well as three international airports in Phuket, Chiang Mai and Hat Yai.
One of the SET's flagship stocks, AOT had the second-highest trading value after DELTA at 5.6 billion baht on Monday. The price of the share has decreased by 19.6% over the past three months.
The SET index dropped to as low as 1,236.80 points in early morning trade on Monday before slightly rebounding to finish at 1,248.49 points by midday, down 1.86% or 23.71 points. The index has lost more than 9% this year to date.
Analysts at Krungsri Capital Securities (KCS) said investors should avoid investing in DELTA in the short term after the company announced quarterly earnings that were 61% lower than the consensus estimate.
DELTA's lowest quarterly profit in three years has prompted KCS to recommend "sell" on the stock for the time being.
Liberator Securities said DELTA's profit significantly decreased due to increasing costs, expenses and taxes, as well as the potential impact of the trade war under US President Donald Trump's administration.
As of Feb 14, AOT's market cap fell by 182 billion baht from the beginning of the year, falling from third place on the SET to seventh at present.
CGS International Securities (Thailand) said King Power's liquidity problem might affect AOT's revenue if the situation at the duty-free company drags on.
"That might lead to negotiations to adjust the terms of the concession agreement, especially the annual minimum guarantee, which is AOT's main source of revenue," CGS said.
Since the concession revenue currently accounts for about 33% of AOT's total revenue expected in fiscal 2025, if the concession terms are actually adjusted, it may significantly affect AOT's earnings estimates, the brokerage added.
"The situation creates uncertainties, leading to concerns from investors. AOT's share price may be pressured negatively in the short term," it noted.
AOT, however, said in a filing to the SET on Monday that the company has not made any adjustment to the concession contract entered into with King Power Group and continues to proceed with the contract in strict compliance with good corporate governance principles.