In today’s briefing:
- DN Solutions IPO: Valuation Insights
- Shenzhen Intl (152 HK): Delivered as Promised
- Itochu the Fashion Giant Doubles Down on Brand Business
- FedEx’s $600 Million Secret: Cost Cuts, Controversy, and a Game-Changing Split!
DN Solutions IPO: Valuation Insights
- 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.
- We previously discussed the IPO in DN Solutions IPO: The Bull Case and DN Solutions IPO: The Bear Case.
- I examine the syndicate’s valuation methodology. My analysis suggests that DN Solutions is palatable in the low end of the IPO price range.
Shenzhen Intl (152 HK): Delivered as Promised
- While Shenzhen International (152 HK)‘s FY24 result is at the low end of the positive profit alert range, its 2H24 net profit has still grown by 22.7%.
- Better outlook at Shenzhen Expressway (548 HK) and margin improvement for logistics hubs will drive FY25. Upside will come from further gains at South China Logistics Park.
- SZI’s valuations of 5.9x PER, 8.4% yield, and 0.5x P/B for FY25F are attractive. As more deals are sealed to realise its asset value, its P/B discount will narrow.
Itochu the Fashion Giant Doubles Down on Brand Business
- Warren Buffett is investing more in Japan’s trading companies for a variety of reasons but Itochu stands alone in its dominance of Japan’s fashion sector.
- Itochu continues to emphasise investment in consumer brands, particularly fashion and sports, but will now adjust its decades-old playbook, introducing more direct oversight of subsidiaries and affiliates.
- This will include a big new push to turn Vivienne Westwood into a luxury brand, upgrading Paul Smith and bringing Descente Ltd (8114 JP) in-house
FedEx’s $600 Million Secret: Cost Cuts, Controversy, and a Game-Changing Split!
- FedEx Corporation’s third-quarter fiscal 2025 performance showcases a balanced mix of operational successes and challenges.
- The results highlight a 2% year-over-year revenue increase, primarily attributed to operational efficiency initiatives, notably the DRIVE savings program, which achieved $600 million in savings for the quarter.
- Driven by these efficiencies, the company saw a 12% increase in adjusted operating income and a 17% rise in adjusted EPS compared to the previous year.
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