Shin Yun-cheol, a Kiwoom Securities researcher, said on the 29th that DN AUTOMOTIVE is expected to achieve a double-digit operating margin (operating profit ÷ sales) for the fourth straight year through this year. He did not separately present an investment opinion or a target price.
DN AUTOMOTIVE has two pillars: the auto parts business and the machine tool business. The revenue mix is roughly 4 to 6. In the first half of this year (January–June), the operating margin of the auto parts institutional sector was 9.6%, and the machine tool (MTB) institutional sector was 18.8%.
The auto parts institutional sector is facing pressure from item tariffs under the U.S. Donald Trump administration. In particular, VMS (vibration isolation) products rely on the Americas for more than 50% of sales.
However, Shin said, "The 'reimbursement' paid on imported parts for automobile assembly in the United States is expected to offset a considerable part of the tariff shock."
DN AUTOMOTIVE's machine tool institutional sector is expanding its business scope. Shin said, "DN AUTOMOTIVE has mainly produced machine tools for automotive clients, but demand in the aviation and defense industries has been on the rise recently," adding, "As orders from U.S. aviation and defense corporations, including Boeing, increase, we expect the gap in market share with Haas Automation, the No. 1 company in the U.S. machine tool market, to narrow."
DN AUTOMOTIVE currently operates production bases in Korea and China. Since Aug., it has begun building a new plant in India, and its subsidiary DN Solutions recently decided to acquire Heller, which has production bases in Germany, the United Kingdom, Brazil, the United States, and China. It is expected to improve profitability by strengthening its after-sales service (AS) network, centered on advanced markets.
It is uncertain when DN Solutions, which is in charge of the factory machinery institutional sector, will make another attempt to list. Shin said, "There are plans to resume an IPO for DN Solutions, but there is no fixed schedule yet."