IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/dn-solutions" target="_blank" data-smartkarma-citation="entities:44474:1" rel="noopener">DN Solutions (298440 KS)</a>, the third-largest machining centre/turning centre machine tool manufacturer, seeks to raise US$1.1 billion in a KRX IPO.   </li>
<li>
<a href="https://www.smartkarma.com/entities/dn-automotive-corporation" target="_blank" data-smartkarma-citation="entities:20840:1" rel="noopener">DN Automotive (007340 KS)</a> is the largest shareholder, representing 84.8% of outstanding shares. The primary/secondary split is 43%/57%.</li>
<li>The bull case rests on the market share gains, high barriers to entry, healthy forward revenue indicators, a return to growth, and top-tier EBIT margin.</li>
</ul>



DN Solutions (298440 KS), the third-largest machining centre/turning centre machine tool manufacturer, seeks to raise US$1.1 billion in a KRX IPO.   

DN Automotive (007340 KS) is the largest shareholder, representing 84.8% of outstanding shares. The primary/secondary split is 43%/57%.
The bull case rests on the market share gains, high barriers to entry, healthy forward revenue indicators, a return to growth, and top-tier EBIT margin.


Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/dn-solutions" target="_blank" data-smartkarma-citation="entities:44474:1" rel="noopener">DN Solutions (298440 KS)</a> (DNS) aims to raise around US$1.1bn in its Korea IPO via selling a mix of primary and secondary shares.</li>
<li>DNS is engaged in the manufacture and sale of machine tools and the business of automation solutions and services related thereto.</li>
<li>In this note, we talk about the not-so-positive aspects of the deal.</li>
</ul>



DN Solutions (298440 KS) (DNS) aims to raise around US$1.1bn in its Korea IPO via selling a mix of primary and secondary shares.
DNS is engaged in the manufacture and sale of machine tools and the business of automation solutions and services related thereto.
In this note, we talk about the not-so-positive aspects of the deal.


DN Solutions Pre-IPO - The Negatives - Stagnant Volumes

<ul>
<li>
<a href="https://www.smartkarma.com/entities/dn-solutions" target="_blank" data-smartkarma-citation="entities:44474:1" rel="noopener">DN Solutions (298440 KS)</a> (DNS) aims to raise around US$1.1bn in its Korea IPO via selling a mix of primary and secondary shares.</li>
<li>DNS is engaged in the manufacture and sale of machine tools and the business of automation solutions and services related thereto.</li>
<li>In this note, we talk about the company’s past performance.</li>
</ul>



DN Solutions (298440 KS) (DNS) aims to raise around US$1.1bn in its Korea IPO via selling a mix of primary and secondary shares.
DNS is engaged in the manufacture and sale of machine tools and the business of automation solutions and services related thereto.
In this note, we talk about the company’s past performance.


DN Solutions Pre-IPO - The Positives - Growing Market Share

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

<ul>
<li>Our base case valuation of DN Solutions suggests target price of 90,167 won per share, which is 1% higher than the high end of the IPO price range. </li>
<li>Our base case valuation is based on 17.9x P/E using our estimated net profit of 317.9 billion won for DN Solutions in 2025. </li>
<li>Given the lack of upside, we have a Negative View of this IPO. DN Solutions has higher operating margin and ROE but lower revenue growth than its comps. </li>
</ul>


Our base case valuation of DN Solutions suggests target price of 90,167 won per share, which is 1% higher than the high end of the IPO price range. 
Our base case valuation is based on 17.9x P/E using our estimated net profit of 317.9 billion won for DN Solutions in 2025. 
Given the lack of upside, we have a Negative View of this IPO. DN Solutions has higher operating margin and ROE but lower revenue growth than its comps. 


Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/dn-solutions" target="_blank" data-smartkarma-citation="entities:44474:1" rel="noopener">DN Solutions (298440 KS)</a> is looking to raise up to KRW 1,573bn (US$1.08bn), valuing the company at KRW 5.66 trillion (US$3.9bn) at the top end of the IPO price range.</li>
<li>The highest probability of <a href="https://www.smartkarma.com/entities/dn-solutions" target="_blank" data-smartkarma-citation="entities:44474:1" rel="noopener">DN Solutions</a> being added to the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI200 Index</a> is at the June 2026 rebalance. The stock needs to move 60% higher to be added in December 2025.</li>
<li>Inclusion in global indices could commence in August/November and will depend on institutional investor lock-up schedules. Flows are small unless the stock moves higher and is included in bigger indices.</li>
</ul>



DN Solutions (298440 KS) is looking to raise up to KRW 1,573bn (US$1.08bn), valuing the company at KRW 5.66 trillion (US$3.9bn) at the top end of the IPO price range.
The highest probability of DN Solutions being added to the KOSPI200 Index is at the June 2026 rebalance. The stock needs to move 60% higher to be added in December 2025.
Inclusion in global indices could commence in August/November and will depend on institutional investor lock-up schedules. Flows are small unless the stock moves higher and is included in bigger indices.


DN Solutions IPO: Index Inclusion Timing Depends on Lock-Up Expiry Schedule

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DN Solutions (298440 KS)

DN Solutions IPO: The Bull Case

The bull case rests on the market share gains, high barriers to entry, healthy forward revenue indicators, a return to growth, and top-tier EBIT...

Arun George

DN Solutions Pre-IPO - The Negatives - Stagnant Volumes

DN Solutions (298440 KS) (DNS) aims to raise around US$1.1bn in its Korea IPO via selling a mix of primary and secondary shares. In this note, we...

Sumeet Singh

DN Solutions IPO Valuation Analysis

Our base case valuation of DN Solutions suggests target price of 90,167 won per share, which is 1% higher than the high end of the IPO price range....

Douglas Kim

DN Solutions IPO: Index Inclusion Timing Depends on Lock-Up Expiry Schedule

DN Solutions could raise up to US$1.08bn, valuing the company at US$3.9bn at the top of the range. Inclusion in global indices depends on the lock...

Brian Freitas

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