In today’s briefing:
- Tryt (9164 JP): Take Profits as Takeover Speculation Swirls
- Hanwha Aero: Base Case Is the Raise Goes Through
- Hyundai Rotem: Surging Growth of Defense Exports
Tryt (9164 JP): Take Profits as Takeover Speculation Swirls
- TRYT (9164 JP) shares were up 38.5% over the last two days based on a report that EQT, the controlling shareholder, had made progress in identifying bidders for its stake.
- The exploration of the privatisation process is unsurprising, as Tryt was pre-rumour trading 69% below its JPY1,200 IPO price.
- The upside is limited, as the last close already reflects a significant takeover premium, and a binding proposal that satisfies EQT’s price aspirations will be challenging.
Hanwha Aero: Base Case Is the Raise Goes Through
- FSS has quietly greenlit Hanwha Aero’s raise — current pushback is just optics, with defense being too strategic for regulators to risk sending the wrong signal.
- Hanwha Aero’s second updated filing should check the FSS box, and Hanwha Energy swapping cash for equity gives regulators cover to bless the deal without catching heat.
- Base case is the raise goes through — trade the window between the amended filing and effective date, and shorts can still join the deal if they cover in time.
Hyundai Rotem: Surging Growth of Defense Exports
- We remain impressed with Hyundai Rotem’s aggressive new orders for defense and railway systems.
- Defense exports as a percentage of total sales increased from 0% in 2021 to 6.1% in 2022, 19% in 2023, and 36.4% in 2024.
- Hyundai Rotem had an order backlog of 14.1 trillion won at the end of 2024. Order backlog/sales ratio was 3.2x in 2024.
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