[IPO Microscope] DTS Riding AI Boom for KOSDAQ Debut—Can It Shed the 'First Double-Listing' Label?

Sales Doubled in 2 Years on Air-Cooled Heat Exchanger Technology
Expansion into AI Data Center Cooling and Power Infrastructure
Controversy Over First Double-Listing Exception
"Commitment to Strengthening Management Independence"

DTS, a manufacturer of air-cooled heat exchangers (AFC), is seeking a listing on KOSDAQ as the first company approved for an exception to Korea’s double-listing ban. Its sales have nearly doubled over the past two years, and the company is preparing to enter new markets due to the surge in electricity demand driven by artificial intelligence (AI). However, there are variables that could affect its stock price after the listing, including the fact that DTS is a subsidiary at the lowest tier of Dasan Group’s three-layer governance structure, and that a significant portion of sales is concentrated in a specific country.

According to the Financial Supervisory Service’s electronic disclosure system on September 23, DTS submitted its securities registration statement on September 11, beginning the KOSDAQ listing process. DTS manufactures air-cooled AFCs and condensers (ACC) used in oil refining, petrochemical, and power generation plants. The company was founded in 2000 and joined Dasan Group in 2013. DTS reported that the air-cooled heat exchanger market is “an oligopoly where a handful of companies compete globally,” and stated that it has completed supply chain registration with the world’s top 15 EPC (Engineering, Procurement, and Construction) companies. With the expansion of AI increasing electricity demand, DTS is also preparing to enter the AI data center (AIDC) thermal management and power facility markets.

Revenue increased from 75.8 billion won in 2023 to 142.7 billion won in 2025, while the operating margin remained between 17.5% and 21.6%. For the first half of this year, DTS reported sales of 79.1 billion won and operating profit of 15 billion won, representing increases of 26.2% and 42.9%, respectively, compared to the same period last year. As of the end of the first half, the company’s debt ratio stood at 73.22%, lower than the industry average of 88.65%.

Double-Listing Exception No.1... Promises to Strengthen Management Independence

The largest shareholder of DTS is Dasan Networks, a KOSDAQ-listed company, holding a 37.69% stake before the public offering. The largest shareholder of Dasan Networks is Dasan Solueta, and the largest shareholder of Dasan Solueta is Dasan Invest.

In response to concerns that a subsidiary being separately listed could dilute the value of the parent company’s shareholders, the Financial Services Commission and the Korea Exchange announced guidelines in July entitled “Double Listing Principle Ban and Exception Allowance.” On August 20, DTS, together with Deoksan Nepcoress, a subsidiary of Deoksan Hi-Metal, became the first companies to receive approval under these new standards.

DTS is a core subsidiary that generated about 65% of Dasan Networks’ consolidated operating profit (38.5 billion won) last year. Some minority shareholders of Dasan Networks have opposed the listing, arguing that the holding company discount could expand if the parent company’s stock no longer fully reflects the value of the subsidiary after the listing.

Addressing these concerns, DTS explained, “This listing is not a structure in which the largest shareholders and related parties sell their shares to realize investment returns. Rather, all of the public offering proceeds will be raised through the issuance of new shares and injected as new capital into DTS.” The Dasan Networks special committee also stated that both companies “operate as independent business entities, clearly separated in terms of business domains, customers, supply chains, R&D, and all stages of production.”

With the goal of strengthening management independence, DTS further announced, “Participation of persons specially related to Dasan Group on the board of directors will be restricted for 36 months after the listing; the company will not engage in payment guarantees or collateral transactions with Dasan Networks, nor pay any trademark license fees.”

One Comparative Company Raises PER... 45% of Sales from UAE

The comparative companies used to determine the offering price were SNT Energy (PER 5.29), BHI (34.88), and Hantec (8.26). The lead underwriter, Daishin Securities, calculated a per-share valuation of 26,419 won with a simple average PER of 16.14, then applied a discount range of 29.98% to 35.65% to set the indicative public offering price.

BHI was the main factor that pulled the average up. Its PER is four to six times higher than the other two, and its revenue composition differs significantly: heat recovery steam generators (HRSGs) account for 65.4%, boilers 21.6%, unlike DTS, whose main product is heat exchangers. Excluding BHI, the average PER drops to 6.8, and the per-share valuation becomes roughly 11,100 won.

DTS stated, “There is a degree of association with these three companies in terms of business, and some similarity in revenue breakdown. However, due to the characteristics of the relative valuation method, the appropriateness of the comparative company selection and the process cannot be guaranteed in its entirety.”

Sales are heavily concentrated in a small number of overseas markets. For the first half of this year, exports accounted for 97.24% of total sales, with the United Arab Emirates (UAE) alone representing 45.4%. The UAE portion rose year by year: from 2.9% in 2023 to 23.3% in 2024, 26.8% in 2025, and approximately 45.4% in the first half of 2026.

DTS plans to offer the entire 2,228,917 new shares, with an indicative price range of 17,000 to 18,500 won per share and an expected offering size of 37.9 to 41.2 billion won. Bookbuilding will run from October 1 to 8, and subscriptions on October 13 and 14.

The immediately tradable shares after the listing will total 2,257,87, including employee stock ownership and minority shareholder holdings, representing 15.15% of the total listed shares. The holdings of Dasan Networks and related party Star Collabo (44.24% after the offering) will be locked up for 30 months. However, six months after the listing, the lock-up will be lifted for roughly 3.79 million shares held by financial investors (FI) and others, increasing the tradable share proportion to as much as 47.52%.

This content was produced with the assistance of AI translation services.