Daily Brief Industrials: Hanwha Aerospace, Watsco Inc, Arcadis NV, ZTO Express Cayman and more

• Market sees this as an M&A play, not just de-leveraging. Sentiment’s split, and despite a tight discount, uncertainty on take-up could spark major dislocations in stock and rights.
• Hanwha’s ₩3.6T raise drops just a week after Samsung SDI’s ₩2T—₩5.5T back-to-back. Absorption looks brutal, setting up serious volatility and prime trading opps if liquidity tightens.
• The FSC fast-tracked this, flagging it instantly but also hinting approval. With regulator risk off, any cash market snapback tomorrow should stay in check.

• Hanwha Aerospace (012450 KS) announced a rights offering capital raise of 3.6 trillion won (US$2.5 billion), which is the largest ever rights offering capital raise in Korea.
• We believe this capital raise is likely to result in higher concerns about shares dilution at Hanwha Aerospace and negatively impact its share price.
• It is also likely to have a significant negative impact on the entire Korean defense stocks, as it signals a top on this sector. 

• Watsco is North America’s largest distributor of HVAC equipment, serving as a crucial link between manufacturers and contractors.
• They offer a wide range of equipment and parts, technical expertise, and value-added services to their contractor customers.
• Watsco’s transformation from manufacturer to distributor in 1989 led to significant growth, with consistent annualized shareholder returns over the years.

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• In this edition: • KPN | has overtaken VodafoneZiggo as the largest consumer broadband provider • Unilever | ice cream division to be named The Magnum Ice Cream Company • Arcadis | acquires WSP Infrastructure Engineering – at current share price trading at highly attractive level

• Q424 revenue growth & EBITDA margin both improved noticeably vs Q324 
• Additionally, ZTO gave FY25 parcel volume guidance that implies an acceleration of growth
• But “key” change in revenue mix is crushing cash returns (Q424 OpCF down -28% Y/Y)