DN Solutions, a global third-ranked machine tool manufacturer, has revised its securities registration statement and added details about U.S. President Donald Trump's plan for large reciprocal tariffs. Since about 80% of its sales come from exports, the company quickly adjusted investment risk factors, although the desired offering price range has not changed.
According to the Financial Supervisory Service's electronic disclosure system on the 9th, DN Solutions announced a revised securities registration statement on the 8th, addressing risks related to domestic and international macroeconomic downturns and uncertainties, as well as regulatory risks. In addition to the previously stated 25% tariff on automobiles, the company also added details regarding reciprocal tariffs.
The company stated in the amended securities report that "the U.S. announced that it will introduce reciprocal tariffs to respond to tariffs and non-tariff trade barriers of trading partners, and the reciprocal tariff rate imposed on South Korea has been set at 25%," adding that the reciprocal tariffs are expected to take effect from April 9.
As of 2024, DN Solutions' export share accounts for 80.3% of sales. This means the company could be directly hit by Trump's 25% reciprocal tariff 'blow.' The company is also aware of this and noted in its existing securities report that "the U.S.'s high tariff policy could adversely affect exports to the U.S." Furthermore, it stated that "global economic uncertainty due to tariff risk could negatively impact the machine tool industry and the company’s operating environment."
Despite this, the market is taking note that DN Solutions has not changed its valuation in the amended securities report. The desired offering price range for DN Solutions is between 65,000 and 89,700 won. Considering that the number of applicable shares is 63,137,073, the expected market capitalization range is between 4.1039 trillion and 5.6634 trillion won.
DN Solutions is currently embroiled in controversies over its high corporate valuation as it begins the public offering process. The estimated market capitalization after listing, based on the upper limit of the desired offering price range, has jumped to more than double what it was at the time of investment attraction one year ago.
While its valuation has jumped nearly twofold, its performance has rather deteriorated. Net income has decreased. The business environment has worsened due to the global economic downturn. There are already concerns in the market that it will not be easy for DN Solutions to successfully carry out its public offering, with nearly 57% of the shares being sold in the secondary market seen as a negative factor.