Daily Brief Industrials: Lotte Global Logistics, Adani Enterprises, DN Solutions, Teledyne Technologies, Braemar Shipping Services PLC, Nitto Kogyo, S.F. Holding, Sono Group, Jiangsu Zenergy Battery Technologies and more

• Lotte Global Logistics is getting ready to complete its IPO in KOSPI in May 2025. IPO price range is from 11,500 won and 13,500 won.
• At the high end of the IPO price range, the expected public offering amount is 202 billion won.
• According to the bankers’ valuation, the expected market cap after the IPO is 479 billion won to 562 billion won. 

• Investors should keep a close eye on Adani’s execution timeline, the impact on valuations in the sector, and the fundamentals of existing players in the C&W industry. 
• While Adani’s entry may bring some disruption, the sector’s strong growth prospects and the resilience of leading players suggest that there is still value to be found. 
• In the end, long-term success in this industry will depend on a combination of strategic vision, operational excellence, and the ability to adapt to changing market dynamics.

• 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.
• In DN Solutions IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
• The bear case rests on tepid growth due to volume declines, early indications of margin pressure, rising cash conversion cycle, and mid-tier FCF margin.

• 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.
• We have looked at its past performance in our earlier notes. In this note, we will undertake a peer comparison.

• Teledyne Technologies Incorporated presented a mixed financial performance in their fourth quarter of 2024 earnings call.
• The company reported record revenues, with a 5.4% increase in sales compared to the prior year.
• This growth was further highlighted by record achievements in full-year non-GAAP earnings per share and operating margins.

Despite a challenging trading environment in H225, which has prompted a modest adjustment to forecasts, Braemar’s trading outlook for FY26 is promising. The underlying activities continue to expand and diversify, and the company remains well positioned to leverage its strong balance sheet to drive its growth strategy in a fragmented market. Although we have adjusted forecasts modestly, we have maintained our 535p valuation as this is driven by our dividend discount model, which remains unchanged. Furthermore, it is worth highlighting the substantial valuation differential between Braemar and its only quoted peer, Clarkson.

• Q3 2025/3 Earnings Result Summary: Nitto Kogyo Corporation (hereafter, the Company) announced net sales of JPY 133,354 mn (+14.1% YoY), operating profit of JPY 9,298 mn (+3.3% YoY), ordinary profit of JPY 9,503 mn (-0.0% YoY), and profit attributable to owners of parent (hereafter, net profit) of JPY 9,014 mn (+36.3% YoY).
• The double-digit increase in net profit was attributed to the recording of extraordinary gains on the acquisition of shares in a subsidiary.
• FY2025/3 Earnings Forecast: The forecast calls for net sales of JPY178,000 mn (+10.8% YoY), operating profit of JPY12,000 mn (+0.3% YoY), ordinary profit of JPY12,000 mn (-4.5% YoY), and net profit of JPY10,000 mn (+14.7% YoY).

• By some measures, combined Jan-Feb volume growth slowed vs recent trend growth rates
• Volume leader ZTO rejoining volume share game in FY25, -ive implications for pricing?
• With concerns about mainstream price growing, we continue to favor only SF Holding

• Sono Group is a pioneering German solar technology company dedicated to revolutionizing the transportation industry. 
• Sono’s focus is on developing and commercializing innovative solar integration technologies for a wide range of vehicles, including solar kits for trucks, semi-truck trailers, vans, RVs, and buses.
• The products are designed to reduce fuel consumption and CO2 emissions, offering cost savings and environmental benefits to commercial fleet operators.

• Jiangsu Zenergy Battery Technologies (JSZENERGY CH) is looking to raise up to US$300m in its upcoming HK IPO.
• Zenergy is an EV and energy storage system battery manufacturer providing integrated battery solutions, encompassing battery cells, modules, packs and battery management systems dedicated to large-scale applications of electrochemical products.
• In this note, we talk about the not-so-positive aspects of the deal.