December 21, 2012

KOREA

Company News & Analysis Major Indices Close Chg Chg (%) Hite Jinro (Buy/TP: W37,000) KOSPI 1,980.42 -19.08 -0.95 Soju price hike positive but offers limited upside KOSPI 200 261.89 -2.89 -1.09 KOSDAQ 478.06 -1.15 -0.24 Korea Investment Holdings (Buy/TP: W58,000) Stable performance regardless of market conditions Turnover ('000 shares, Wbn) Volume Value KOSPI 544,056 5,167 Sector News & Analysis KOSPI 200 99,009 4,283 KOSDAQ 327,840 1,496 Holding companies (Overweight) Park will seek to curb growing influence of chaebols Market Cap (Wbn) Value Construction (Neutral) KOSPI 1,144,397 Leadership change to improve sentiment well into 1H13 KOSDAQ 105,462 KOSPI Turnover (Wbn) Media (Overweight) Buy Sell Net Media stocks to benefit from new administration Foreign 1,611 1,201 411 Institutional 1,382 1,501 -119 Retail 2,155 2,392 -237

KOSDAQ Turnover (Wbn) Buy Sell Net Foreign 93 74 20 Institutional 75 88 -13 Retail 1,325 1,331 -7

Program Buy / Sell (Wbn) Buy Sell Net KOSPI 1,555 941 614 KOSDAQ 18 15 4

Advances & Declines Advances Declines Unchanged KOSPI 361 447 78 KOSDAQ 337 580 77

KOSPI Top 5 Most Active Stocks by Value (Wbn) Price (W) Chg (W) Value Samsung Electronics 1,442,000 -61,000 801 KODEX LEVERAGE 12,620 -220 265 SEMCO 102,000 -4,000 203 Hynix 25,400 -900 181 KODEX INVERSE 7,465 65 139

KOSDAQ Top 5 Most Active Stocks by Value (Wbn) Price (W) Chg (W) Value EG 49,500 4,950 98 Agabang 10,200 1,320 60 Gamevil 90,400 100 35 AHNLAB 40,200 -1,750 34 Haatz 3,330 -340 29 Note: As of December 21, 2012

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Company December 21, 2012

Food & Beverage Hite Jinro (000080 KS) Daewoo Securities Co., Ltd. Woon-mok Baek Soju price hike positive but offers limited upside +822-768-4158 [email protected] Hite Jinro to raise soju prices by 8.2%

Hite Jinro, the largest soju maker in Korea, announced it will raise ex-factory price for soju products by an average of 8.2% from December 22. The ex-factory price for a 360ml bottle of Chamisul and Chamisul Classic will increase by W73 to W962. The

market has been anticipating a price hike as: 1) soju prices have remained frozen over the past four years, 2) alcohol (raw material) price for soju climbed by 5.8% in July, and 3) logistics costs are increasing. However, the magnitude of the increase Trading Buy (Maintain) is higher than expected (5-6%). We estimate the price hike will raise 2013 revenues Target Price (12M, W) 37,000 by W55bn (~8% of soju sales of W700bn in 2013), as the price elasticity of soju Share Price (12/20/12, W) 30,250 consumption is relatively low. Expected Return (%) 22.3 EPS Growth (12F, %) -10.7 4Q12 NP to turn to red on one-off costs; 2013 earnings set to improve Market EPS Growth (12F, %) 9.8 P/E (12F, x) 24.3 We expect Hite Jinro to restructure its operation at the end of 2012, reducing Market P/E (12F, x) 10.7 redundancy costs through mergers and increasing market share by encouraging KOSPI 1,999.50 sales agents to cross sell both beer and soju products. While these efforts will take Market Cap (Wbn) 2,102 time to bear fruit, the company is likely to turn to red in 4Q12 due to one-off Shares Outstanding (mn) 71 expenses related to restructuring. From 2013, we expect fundamentals to improve Avg Trading Volume (60D, '000) 351 Avg Trading Value (60D, Wbn) 10 and project Hite JinroÊs 2013 revenues and operating profit to rise by 9.8% and Dividend Yield (12F, %) 4.0 7.2%, respectively, on the back of beer and soju price hikes, malt price stabilization Free Float (%) 38.3 (driven by international price declines and won appreciation), and cost reduction. 52-Week Low (W) 19,550 52-Week High (W) 33,700 Maintain Trading Buy with TP of W37,000 Beta (12M, Daily Rate of Return) 0.59 Price Return Volatility (12M Daily, %, SD) 2.2 We reiterate Trading Buy on Hite Jinro with a target price of W37,000. While Foreign Ownership (%) 14.8 earnings are set to improve from 1Q13, valuation appears stretched as the stock Major Shareholder(s) currently trades at 2013F P/E of 20.2x. Moreover, we are concerned about the Hite Jinro Holdings et al. (57.79%) continual beer market share loss to Oriental BreweryÊs (OB) Cass beer (Hite JinroÊs market share down to 43% in 4Q12, from 45% in 1Q12), although products like Dry Finish and Max have done well lately and should help stop the market share loss Price Performance from 2013. Without a meaningful improvement in its beer market share or better (%) 1M 6M 12M Absolute -6.9 34.4 12.0 visibility in its overseas operations, we believe the counter lacks a strong catalyst for Relative -12.7 29.4 0.5 a sustained rally.

Share price FY Revenues OP OP Margin NP EPS EBITDA FCF ROE P/E P/B EV/EBITDA 130 KOSPI (Wbn) (Wbn) (%) (Wbn) (Won) (Wbn) (Wbn) (%) (X) (X) (X) 120 110 12/10 1,066 122 11.4 48 1,136 167 -36 7.0 31.2 2.2 10.3 100 12/11 1,374 137 10.0 70 1,396 194 -108 6.9 18.0 1.2 15.7 90 12/12F 2,004 193 9.6 88 1,247 207 -7 6.2 24.3 1.4 16.7 80 70 12/13F 2,201 207 9.4 106 1,495 269 120 7.3 20.2 1.4 12.8 60 12/14F 2,298 227 9.9 120 1,702 291 109 8.0 17.8 1.3 11.9 12/11 4/12 8/12 12/12 Note: All figures are based on consolidated K-IFRS; NP refers to net profit attributable to controlling interests Source: Company data, KDB Daewoo Securities Research estimates

Table 1. Hite JinroÊs soju price hike (2012.12.22) (W, %) Previous Revised Liquor tax rate 72% 72% Pretax price 417.4 451.6 Liquor tax 300.5 325.1 Education tax 90.2 97.5 Supply price 808.1 874.3 Surtax 80.8 87.4 Total tax 471.5 510.1 Ex-factory price 888.9 961.7 Total tax rate (%) 53.0 53.0 Distribution margin 177.8 192.3 Retail margin 213.3 230.8 Consumer price 1,280.0 1,384.8 Pretax price growth (%) - 8.2 Ex-factory price growth (%) - 8.2 Consumer price growth (%) - 8.2 Note: Based on Chamisul (360ml) Pretax price= Price that includes labor costs, manufacturing costs and margin Ex-factory price=Price for wholesaler including tax Distribution margin= Ex-factory price * 20% Retail margin= (Ex-factory price + Distribution margin) * 20% Consumer price= Ex-factory price + Distribution margin +Retail margin (estimated) Source: KDB Daewoo Securities Research

Table 2. Hite JinroÊs quarterly earnings forecasts (Wbn, %) 2012F 2013F 2012F 2013F 2014F 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Annual Annual Annual Revenues 442 538 549 475 490 590 624 497 2,004 2,201 2,298 Operating profit 39 94 59 0 42 65 65 36 193 207 227 Pretax profit 24 76 43 -13 29 51 50 26 130 155 177 Net profit 18 54 30 -13 20 34 34 17 88 106 120 OP margin 8.8 17.5 10.8 0.1 8.5 10.9 10.4 7.2 9.6 9.4 9.9 NP margin 4.0 10.0 5.4 -2.7 4.0 5.8 5.5 3.5 4.4 4.8 5.2 Revenue growth 80.9 88.1 50.9 -1.0 10.8 9.6 13.6 4.8 45.9 9.8 4.4 OP growth 27.4 80.1 65.3 -98.0 7.2 -31.4 8.8 - 41.1 7.2 9.5 Pretax profit growth -15.7 45.1 42.5 TTR 21.6 -33.3 16.8 TTB 16.8 19.9 13.8 Net profit growth -12.0 29.3 43.3 TTR 11.9 -35.8 14.3 TTB 25.5 19.9 13.8 Source: Company data, KDB Daewoo Securities Research

2 Company December 21, 2012

Securities Korea Investment Holdings (071050 KS) Daewoo Securities Co., Ltd. Stable performance regardless of market conditions Gil-won Jeong +822-768-3256 3QFY12 preview: Robust results and stable operating performance [email protected] For 3QFY12 (fiscal year ends in March), we project Korea Investment HoldingsÊ (KIH) Hae-deun Kim net profit to come in at W76.9bn (W77.2bn for its major subsidiary, Korea Investment & +822-768-4180 [email protected] Securities (KIS)), exceeding the market consensus of W54.9bn. This would represent a significant improvement from W26.1bn in 2QFY12 (W28.2bn at KIS).

One off proprietary trading gains of around W50bn should be the biggest contributor to earnings growth. In November, valuation losses on foreign currency-denominated marketable securities recorded in 2008 from principal investments (US$200mn as a Buy (Maintain) financial investor for Doosan InfracoreÊs acquisition of Bobcat) were reversed to gains. Target Price (12M, W) 58,000 Share Price (12/20/12, W) 42,500 KISÊs operating results are anticipated to remain largely unchanged QoQ, as: 1) the firm Expected Return (%) 36.5 has maintained its market share (based on brokerage commissions) at 6.0%, which is EPS Growth (12F, %) -30.4 comparable to top-tier players, 2) ELS issuance is recovering with cumulative 3QFY12 Market EPS Growth (12F, %) 9.8 issuance as of end-November already reaching 2QFY12 levels (W620bn in 2Q vs. P/E (12F, x) 14.3 W610bn in 3Q as of end-November), and 3) income from the asset management and IB Market P/E (12F, x) 10.7 businesses remaining flat. KIHÊs asset management subsidiaries are projected to record KOSPI 1,999.50 W15bn in combined pretax profit with a savings bank recording W4bn. Market Cap (Wbn) 2,368 Shares Outstanding (mn) 62 Other factors that are expected to sway 3Q earnings include the following. First, Avg Trading Volume (60D, '000) 99 securities companies typically incur ELS valuation losses in 3Q as listed companies with Avg Trading Value (60D, Wbn) 4 fiscal year ending in December go ex-dividend in the quarter. However, the losses are Dividend Yield (12F, %) 2.1 reversed to gains in 4Q. Second, losses from Woongjin HoldingsÊ bonds and gains from Free Float (%) 71.9 the disposal of commodity funds that affected 2Q earnings appear to have dissipated in 52-Week Low (W) 31,300 52-Week High (W) 48,950 3Q. Beta (12M, Daily Rate of Return) 1.57 Maintain Buy and TP of W58,000 Price Return Volatility (12M Daily, %, SD) 2.6 Foreign Ownership (%) 37.7 We maintain our Buy call on KIH and our target price of W58,000. Although securities Major Shareholder(s) shares have been out of favor due to weak market conditions and sluggish earnings, Kim Nam Ku et al. (22.95%) their valuations remain attractive. In light of sound asset quality and profit structure Platinum Investment Mgt (9.16%) (book value highly unlikely to further erode), share prices below a P/B of 1x should Orbis Investment Mgt (8.02%) Price Performance present a buying opportunity. (%) 1M 6M 12M Absolute 16.6 14.1 24.6 Relative 10.8 9.1 13.1 Key Business A financial holding company with a diversified business portfolio, including securities, asset management, venture capital, and banking.

Net Dividend Stockholde operating OP NP EPS BPS P/E P/B ROE FY yield rsÊ equity revenue (Wbn) (Wbn) (W) (W) (x) (x) (%) (%) (Wbn) Share price (Wbn) 140 KOSPI 03/11 794 239 176 2,856 36,172 14.7 1.2 8.1 1.7 2,228 130 120 03/12 919 317 270 4,286 40,684 8.5 0.9 11.2 1.6 2,505 110 03/13F 826 251 186 2,981 43,022 14.3 1.0 7.1 2.1 2,649 100 03/14F 964 359 271 4,406 46,516 9.6 0.9 9.8 2.4 2,865 90 03/15F 1,007 388 293 4,763 49,976 8.9 0.9 9.9 2.4 3,078 80 12/11 4/12 8/12 12/12 Note: All figures are based on consolidated K-IFRS; NP refers to net profit attributable to controlling interests Source: Company data, KDB Daewoo Securities Research estimates

Overweight Holding companies Daewoo Securities Co., Ltd. Dae-ro Jeong Park will seek to curb growing influence of chaebols +822-768-4160 [email protected] Under the banner of “economic democratization”

President-elect Park Geun-hye is expected to promote „economic democratization‰ policies to enhance competition and curb the alleged malfeasance of big businesses. To do so, she will likely: 1) reform the ownership structure of business

conglomerates (chaebols), and 2) tighten regulations on their unfair trade practices. Park will also likely try to minimize the adverse effects of economic democratization on growth and entrepreneurship.

To reform the ownership structure of chaebols, President-elect Park plans to: 1) ban fresh cross-shareholding arrangements, and 2) strengthen the separation between financial and non-financial industries. The ban on new circular equity investment is unlikely to affect the chaebol ownership structure significantly as chaebol affiliates are likely to be allowed to maintain existing cross-shareholdings.

As for the separation of banking and non-banking industries, she has proposed to: 1) lower the ceiling for non-banking companiesÊ ownership in banks, 2) reduce financial affiliatesÊ voting rights in non-financial affiliates from 10% of equity to 5% by 2017 (by 1%p per year), and 3) mandate that intermediate holding companies be used to separate non-financial firms from financial subsidiaries. If those proposals are implemented, the costs of keeping affiliates under the same umbrella could be very high.

Economic democratization has been a catchword during the presidential race for both the ruling and opposition parties. Given the growing public anger against the abuse of economic power by chaebols, we believe ParkÊs economic policy proposals will prove to be more than just empty campaign trail promises. But since ParkÊs conservative Saenuri party has long been identified with big businesses and the establishment, she is unlikely to get as tough on the chaebol issue as her rival candidate might have were he elected. The presidential transition committee is expected to draw up a detailed chaebol reform plan in January or February.

Changes to large conglomerate-related policies (history and 2013F) 1986 1999 2000 2001 2004 2007 2012 2013~ Permission of holding company structure (2/99~)

Ban on holding company structure Enactment of FHCA

Eased subsidiary New shareholding requirement shareholding requirement for second-tier subsidiaries Ⅰ. Holding (50%→30%) (Listed: 20%, Unlisted: 40% companies New shareholding requirement for second-tier subsidiaries (Listed: 30%, Unlisted: 50%) LG (4/01~) GS (7/04~) SK (7/07~) LS (7/08~) Hankook Tire CJ (9/07~) Doosan (1/09~) Aekyung Petrochemical Kolon (1/10~) Dong-A Pharmaceutical

Ⅱ. Equity investment ceiling Introduction Abolition Reintroduction Re-abolition (12/86~) (2/98~) (4/01~) (3/09~)

Limitation on mutual investments Ⅲ. Ban on circular shareholding (12/862~) Ban on new circular shareholding Ban on the voting rights Limitation of the voting rights of financial Limitation of voting rights: of financial or insurance companies or insurance Companies ('02.1~): (12/86~) 15% → 5% Ⅳ. Separation of financial :30%→25~20%→15% and non-financial companies Raise ceiling for non-financials' Ceiling on non-financials' bank ownership 4% (82~) Lower ceiling on bank ownership non-financials' bank ownership Introduction of intermediate 4% → 9% ('09~) holding company Source: KDB Daewoo Securities Research

Neutral Construction Daewoo Securities Co., Ltd. Leadership change to improve sentiment well into 1H13 Daniel Song +822-768-2122 [email protected] Fundamentals continue to weaken in Seoul metro real estate market The average price of apartments in Seoul fell 5.3% from end-2011, to

W16.62mn/3.3㎡ (including apartments expected to undergo reconstruction), which

is lower than the previous low of W17.3mn/3.3m2 during the financial crisis in 2008. Furthermore, this decrease is sharper than during the financial crisis. The value of apartments expected to undergo reconstruction in Seoul plunged 9.7% from end-

2011 to W27.07mn/3.3m2, driving down overall apartment prices.

The average apartment price in the Gyeonggi province declined 2.9% from end- 2011, to W9.19mn/3.3㎡ (including apartments eligible for reconstruction). The price of apartments eligible for reconstruction in this area also went down 7.2% from end-2011.

Prices in Gangdong-gu, Gangnam-gu, Songpa-gu, Seocho-gu, Yangcheon-gu, and Gangseo-gu have fallen by 9.0%, 8.1%, 6.5%, 6.0%, and 5.8%, respectively, this year. In the Gyeonggi area, prices in Gwacheon, Bundang, Yongin/Suji, Anyang, and Goyang/Ilsan have declined 11.0%, 6.1%, 4.9%, 4.7% and 4.5%, respectively.

Seoul apartment prices were down 1.4% in 2008, up 6.0% in 2009, down 2.2% in 2010, down 2.1% in 2011, and down 5.2% in 2012. Gyenggi apartment prices were down 4.9% in 2008, up 1.8% in 2009, down 2.8% in 2010, up 0.1% in 2011, and down 2.9% in 2012.

New gov’t set its eyes on the middle class and household debt problems President-elect Park Geun-hye acknowledged the severity of KoreaÊs household debt problems (close to W1,000tr), and vowed to make the issue a top priority. To help 3.22mn delinquent borrowers repair their credit, the new government plans to set up an W18tr fund (W5.63mn per person). The fund will be used to purchase delinquent consumer debt held by financing companies and private asset management firms, reschedule debt for credit recovery program applicants, and encourage long-term debt repayments. Debt rescheduling includes an up to 50% reduction in debts for general obligors, and up to 70% for low-income earners including those on welfare.

The W18tr fund will be a quick fix to keep the household debt problem from turning into a full-blown crisis. Once the short-term risk is mitigated, the government plans to come up with more fundamental, longer-term solutions. Given that tackling the household debt issue is a top priority for the new government, we expect the problem-solving process to proceed quickly. Although real estate market fundamentals should continue to weaken until 1H13, investor sentiment for construction stocks is projected to improve in anticipation of government policies aimed at propping up the real estate market.

Overweight Media Daewoo Securities Co., Ltd. Jee-hyun Moon Media stocks to benefit from new administration +822-768-3615 [email protected] New administration to support ICT industry

On her way to the Blue House, President-elect Park Geun-hye has advocated economic policies based on her vision of building a „creative economy.‰ She has pledged to help transform „the information, communication, and broadcasting ecosystem into a new

growth engine and thus create jobs and build a creative economy.‰ Indeed, we believe the new administration will provide policy support not only to KoreaÊs already globally competitive manufacturing industry but to service industries as well. More specifically, we think media stands to benefit the most given its relatively strong resilience to public pressures and ability to create added value. Over the past year, media stocks have delivered positive performances on the back of eased regulations and stronger individual competitiveness. Terrestrial broadcasters benefited from tailwinds such as the introduction of the private media representative system and airtime extensions, while pay-TV operators saw an increase in subscribers for IPTV and satellite television, which are free from regional coverage and market share regulations. As part of her proposed policies for the ICT industry, Park has pledged to foster broadcasting into a future growth driver, mainly through deregulation. More detailed policies include standardizing/integrating the pay-TV legal framework, boosting smart media services (i.e., convergences between broadcasting and mobile/internet), lowering entry barriers, and loosening business regulations. It should be noted that most of these proposed measures would likely require revisions to KoreaÊs Broadcasting Act and other related laws.

Watch for media deregulation On the campaign trail, Park pledged to designate broadcasting as the core of the media industry and foster it into a future growth engine. Given this special interest, we believe that changes are in store for broadcasting.

Deregulation boosts media sector index; Pattern to continue next year

(1/12 = 100) After profit-taking at year-end, 130 Media sector index deregulation should provide KOSPI momentum in 2013 2012 rally 120 Deregulation of terrestrial broadcasting Competition heats up in pay TV market Overseas M&As by ad companies 110

100

80 1/12 3/12 5/12 7/12 9/12 11/12

Source: Thomson Reuters, KDB Daewoo Securities Research

With regard to public broadcasters, we believe governance reform is in store, with issues like KBSÊ license fee hike and the privatization of MBC likely to be repeatedly raised. In the private broadcasting segment, we expect greater promotion of market competition (via deregulation) aimed at strengthening private broadcastersÊ competitiveness. This should prove positive to SBS (034120 KS/Buy/TP: W50,000), as deregulation could offer additional revenue sources and thus renew interest in the stockÊs low valuation. In the pay-TV market, we expect to see a realignment of related laws, deregulation, and the promotion of media convergence, all of which should provide tailwinds to pay TV operators like KT Skylife (053210 KS/Buy/TP: W36,000), which has introduced a dish convergence solution service, CJ HelloVision (037560 KS), and Hyundai HCN (126560 KS). In addition to net subscriber additions, mergers and acquisitions between cable system operators and the planned renegotiation of home shopping transmission commissions in 2Q13 are also likely to boost momentum for pay-TV players. Government support for „Korean style‰ content could serve as a catalyst to CJ E&M (130960 KQ/Buy/TP: W36,000). We believe the aforementioned support measures for the media industry and, more broadly, economic stimulus could also provide a boost to the domestic advertising industry. Thus, we recommend keeping a close eye on Cheil Worldwide (030000 KS/Buy/TP: W28,000) A range of government measures to support smart media services also seem to be in the offing. We expect support measures to initially target N-Screen services (which allow users to watch content using a variety of devices), in line with the growth of LTE subscribers (15mn as of 2012F) and a string of N-Screen service releases by major media and telecom companies. Although N-Screen revenues have been somewhat more sluggish than initially expected (in light of the rapid changes in viewersÊ behavior and habits), we believe N-Screen could serve as a stable source of video content revenues sooner than anticipated on the back of policy support. We highlight video content owners SBS and CJ E&M and content distributors SBS Contents Hub (046140 KQ) and iMBC (052220 KQ).

Key Universe Valuations December 21, 2012

※All data as of close December 20, 2012, unless otherwise noted.

12F Earnings growth Mkt Cap Price P/E (x) P/B (x) ROE (%) Ticker Company Div Yield OP EPS (Wbn) (W) (%) 12F 13F 12F 13F 12F 13F 12F 13F 12F 13F 005930 Samsung Electronics 221,391 1,503,000 0.6 78.6 25.5 78.0 28.4 10.8 8.4 2.0 1.7 21.7 22.4 005380 Hyundai Motor 49,012 222,500 0.9 16.4 3.7 18.7 1.1 7.0 6.9 1.4 1.2 21.9 18.2 005490 POSCO 30,995 355,500 3.0 -32.1 43.4 -21.4 30.6 12.4 9.5 0.8 0.7 6.5 8.1 012330 Hyundai Mobis 28,668 294,500 0.7 6.3 15.3 16.0 5.8 8.2 7.7 1.8 1.5 22.7 19.7 000270 Kia Motors 23,552 58,100 1.2 24.3 0.6 21.4 1.9 5.6 5.5 1.5 1.2 27.2 22.0 051910 LG Chem 22,466 339,000 1.2 -26.7 24.3 -25.4 21.0 15.7 13.0 2.4 2.0 15.6 16.5 032830 Samsung Life 19,380 96,900 2.0 33.2 0.0 23.0 4.2 16.6 16.0 1.0 0.9 6.2 6.0 055550 Shinhan Financial Group 18,304 38,600 2.0 -18.2 -1.5 -14.1 2.3 8.1 7.9 0.7 0.7 9.2 8.7 009540 Hyundai Heavy Industries 18,278 240,500 -42.4 34.0 -31.5 17.2 10.4 8.9 1.1 1.0 10.2 10.9 000660 SK Hynix 18,256 26,300 - - - - - 15.9 2.1 1.8 - 11.0 096770 SK Innovation 16,181 175,000 1.9 -27.9 31.2 -50.3 20.2 10.4 8.7 1.1 1.0 10.3 11.3 105560 KB Financial Group 14,817 38,350 1.6 -19.5 3.6 -11.8 3.5 7.3 7.0 0.6 0.6 8.5 8.2 010950 S-Oil 12,103 107,500 2.8 -30.0 42.7 -36.3 72.7 16.5 9.6 2.4 2.0 14.4 22.5 066570 LG Electronics 11,897 72,700 0.7 327.2 31.5 - 40.6 19.5 13.9 1.1 1.0 5.2 7.0 033780 KT&G 11,327 82,500 3.7 0.7 8.7 4.2 13.1 13.3 11.8 2.1 1.9 17.1 17.7 003550 LG Corp. 11,233 65,100 1.5 13.8 8.8 22.5 9.1 9.6 8.8 1.0 0.9 10.9 10.9 034220 LG Display 11,218 31,350 0.8 - 161.0 - 218.5 34.5 10.8 1.1 1.1 3.2 9.7 023530 Lotte Shopping 10,761 370,500 0.4 -15.3 11.7 8.4 12.6 10.7 9.5 1.1 1.0 7.0 7.4 035420 NHN 10,420 216,500 0.2 0.2 24.9 10.4 25.5 21.0 16.7 3.8 3.2 28.4 29.2 000810 Samsung F&M 10,328 218,000 2.3 12.6 20.2 17.0 19.2 12.0 10.1 1.3 1.1 11.1 11.7 051900 LG Household & Health Care 10,011 641,000 0.5 19.0 16.6 27.2 19.1 33.7 28.3 31.8 15.0 29.7 27.8 000830 Samsung C&T 9,889 63,300 1.0 18.0 -12.3 19.9 -22.4 21.1 27.2 1.1 1.0 4.9 3.5 010140 Samsung Heavy Industries 8,958 38,800 2.9 2.0 5.2 8.8 10.0 9.2 1.5 1.3 17.8 16.5 086790 Hana Financial Group 8,555 35,200 2.9 49.3 -19.3 66.0 -32.8 4.4 6.6 0.9 0.5 16.1 9.4 086280 HYUNDAIGLOVIS 8,325 222,000 0.9 34.9 22.0 34.7 14.2 20.5 17.9 4.7 3.8 25.2 23.2 000720 Hyundai E&C 8,084 72,600 1.1 -2.5 35.6 -11.1 38.6 14.3 10.3 1.7 1.5 12.7 15.5 003600 SK Holdings 7,984 170,000 1.1 -28.1 20.1 -35.3 27.3 7.5 5.9 2.0 1.4 9.7 11.2 009150 Samsung Electro-Mechanics 7,918 106,000 0.8 101.0 17.4 35.5 20.7 17.4 14.4 2.3 2.1 12.9 14.1 010130 Korea Zinc 7,595 402,500 0.6 -8.7 24.6 -7.8 30.6 11.7 9.0 2.0 1.6 17.6 19.3 004020 Hyundai Steel 7,593 89,000 0.7 -30.6 35.8 0.3 10.8 10.1 9.1 0.8 0.7 7.9 8.2 090430 Amorepacific 7,354 1,258,000 0.5 7.3 14.4 -2.4 16.1 27.2 23.4 3.9 3.3 14.1 14.4 006400 Samsung SDI 7,107 156,000 1.3 742.1 -81.7 376.7 -59.2 4.8 11.8 1.0 0.9 22.5 8.1 028050 Samsung Engineering 7,020 175,500 2.2 6.2 10.0 4.8 12.8 13.1 11.6 3.5 2.8 34.6 30.4 088350 Hanwha Life 6,905 7,950 3.3 - - 11.5 3.5 11.6 11.2 1.0 0.9 8.8 8.6 078930 GS 6,783 73,000 1.7 -11.7 54.7 -30.6 53.4 12.9 8.4 1.2 1.1 8.6 12.2 139480 Emart 6,593 236,500 0.3 55.6 6.5 71.4 5.8 12.6 11.9 1.1 1.0 9.1 8.9 024110 Industrial Bank of Korea 6,525 11,950 3.4 -11.0 -15.4 -13.0 -12.3 6.1 6.9 0.5 0.5 9.3 7.6 035250 Kangwon Land 6,504 30,400 2.9 -17.0 20.5 -18.8 23.3 20.4 16.5 2.5 2.3 13.6 15.6 001800 Orion 6,163 1,033,000 0.3 37.0 23.7 66.1 27.3 37.3 29.3 6.6 5.5 17.4 18.8 034730 SK C&C 5,200 104,000 1.1 13.3 17.5 4.6 28.4 11.3 8.8 1.8 1.5 18.2 18.9 068270 Celltrion 5,056 28,950 17.2 36.3 1.3 30.2 29.2 22.4 7.2 6.0 17.6 19.2 001300 Cheil Industries 4,955 94,500 0.8 35.1 26.3 -6.7 50.0 20.0 13.3 1.6 1.5 7.5 10.4 004940 Korea Exchange Bank 4,843 7,510 2.3 -51.5 -4.8 -55.1 0.0 6.5 6.5 - - - - 034020 Doosan Heavy I&C 4,742 44,800 7.6 3.2 40.2 24.8 12.3 9.9 1.2 1.1 7.9 9.4 097950 CJ CheilJedang 4,639 354,500 0.6 32.8 16.7 11.2 37.2 15.1 11.0 2.7 2.1 11.7 13.9 047050 Daewoo International 4,572 40,150 0.6 18.3 10.5 -45.5 13.0 35.7 31.6 5.2 4.5 6.5 7.0 011210 Hyundai Wia 4,451 173,000 0.9 62.9 15.8 66.5 12.9 11.0 9.8 2.6 2.1 24.6 22.3 047040 Daewoo E&C 4,177 10,050 1.0 1.1 34.6 4.4 58.2 17.7 11.2 1.2 1.1 6.8 10.0 016360 Samsung Securities 4,074 53,300 1.4 9.6 19.4 24.0 18.6 15.8 13.4 1.1 1.1 6.9 7.7 010060 OCI 3,983 167,000 2.0 -77.4 42.3 -86.7 62.5 38.6 23.7 1.2 1.2 3.1 4.9 Source: KDB Daewoo Research

Market Data December 21, 2012

※All data as of close December 21, 2012, unless otherwise noted.

Other Major Indices Economic Indicators Close Net Chg 1D (%) YTD (%) Close 1D ago 1M ago 1Y ago MSCI Korea* 428.64 0.37 0.09 19.67 USD/KRW 1,073.40 1,071.80 1,083.00 1,167.10 KOSPI 1,980.42 -19.08 -0.95 8.43 JPY100/KRW 1,272.78 1,273.68 1,326.23 1,499.36 KOSDAQ 478.06 -1.15 -0.24 -5.67 EUR/KRW 1,421.72 1,415.10 1,387.59 1,526.92 Dow Jones* 13,311.72 59.75 0.45 8.96 3Y Treasury 2.85 2.88 2.80 3.36 S&P 500* 1,443.69 7.88 0.55 13.05 3Y Corporate 3.30 3.32 3.33 4.25 NASDAQ* 3,050.39 6.03 0.20 15.16 DDR2 1Gb* 1.18 1.17 1.18 1.15 Philadelphia Semicon* 389.49 0.02 0.01 5.67 NAND 16Gb* 1.89 1.89 1.89 2.84 FTSE 100* 5,958.34 -3.25 -0.05 4.53 Oil (Dubai)* 106.28 105.91 109.59 102.81 Nikkei 225 9,940.06 -99.27 -0.99 16.12 Gold* 1,644.90 1,666.50 1,723.60 1,615.60 Hang Seng* 22,659.78 36.41 0.16 20.04 Customer deposits (Wbn)* 17,393 17,223 16,781 19,050 Taiwan (Weighted) 7,519.93 -75.53 -0.99 8.17 Equity type BC (Wbn)(Dec. 18) 95,165 95,137 95,614 103,867 Note: * as of December 20, 2012 Source: KSDA, Wisefn, DRAMeXchange, MSCI

KOSPI Top 10 Foreign Net Buy / Net Sell (Wbn) KOSPI Top 10 Institutional Net Buy / Net Sell (Wbn) Net Buy Net Sell Net Buy Net Sell SEMCO 58.97 Samsung Electronics 114.53 Hyundai Motor 15.53 SEMCO 73.95 Hyundai Heavy Industries 35.24 Amore Pacific 7.37 Hyundai Mobis 15.52 KODEX 200 33.83 NHN 33.37 POSCO 6.46 KEPCO 14.44 LG Display 29.29 KODEX 200 30.90 HANKOOK TIRE 5.21 Shinhan Financial Group 12.22 Hynix 28.59 Hana Financial Group 29.52 Able C&C 3.90 SK Corp. 7.23 Korea Zinc 27.86 KEPCO 29.39 Daelim Industrial 3.13 KT 6.59 Hana Financial Group 14.73 LG Chem 20.44 FILA KOREA 2.99 Samsung F&M Insurance 6.36 Doosan Corp. 14.10 LG Electronics 15.26 HYUNDAIHOMESHOP 2.72 POSCO 5.52 Honam Petrochemical 13.65 SK Energy 15.26 GS Construction 2.60 Hyundai Steel 5.09 Hyundai Heavy Industries 11.43 KT 15.17 Samsung Fine Chemicals 2.39 GS Construction 4.78 Samsung Electronics 10.98 Source: KSDA, Wisefn

KOSDAQ Top 10 Foreign Net Buy / Net Sell (Wbn) KOSDAQ Top 10 Institutional Net Buy / Net Sell (Wbn) Net Buy Net Sell Net Buy Net Sell Celltrion 4.66 Gamevil 2.18 Daum Communications 2.20 Genic 5.05 Paradise 3.71 Wemade 2.06 Wemade 1.19 Gamevil 3.43 Dongsuh 1.29 Interflex 1.81 Samjung Packing & Aluminum 1.05 Interflex 3.35 KH Vatec 1.19 TK Corp. 0.95 GOLFZON 0.92 Silicon Works 2.26 INICIS 1.01 Pyeong Hwa Automotive 0.84 Techno Semichem 0.83 CJ E&M 1.19 GOLFZON 0.96 Sung Kwang Bend 0.79 ATLASBX 0.73 Dongsuh 1.12 Com2us 0.91 Haatz 0.77 Modetour Network 0.73 INICIS 1.08 Flexcom 0.84 Silicon Works 0.74 YG Entertainment 0.70 Sung Woo HiTech 0.88 HaanSoft 0.84 Openbase 0.71 GS Home Shopping 0.66 TK Corp. 0.88 Sung Woo HiTech 0.71 BITComputer 0.69 Koh Young 0.64 Chemtronics 0.72 Source: KSDA, Wisefn

KOSPI Top 10 by Market Cap (Wbn) KOSDAQ Top 10 by Market Cap (Wbn) Close (W) Chg (W) Mkt Cap Close (W) Chg (W) Mkt Cap Samsung Electronics 1,442,000 -61,000 212,406 Celltrion 28,850 -100 5,038 Hyundai Motor 222,500 0 49,012 CJ O Shopping 267,000 0 1,656 POSCO 351,000 -4,500 30,603 Paradise 16,400 400 1,491 Hyundai Mobis 295,000 500 28,716 SK Broadband 4,525 -40 1,339 Kia Motors 57,800 -300 23,430 Seoul Semiconductor 22,700 -350 1,324 LG Chem 337,500 -1,500 22,366 Daum Communications 88,900 -100 1,201 Samsung Life Insurance 96,600 -300 19,320 Dongsuh 18,950 -150 1,121 Samsung Electronics (P) 840,000 -14,000 19,180 POSCO ICT 7,400 40 1,014 KEPCO 29,850 50 19,163 CJ E&M 25,700 200 975 Hyundai Heavy Industries 244,000 3,500 18,544 GS Home Shopping 145,500 1,600 955 Source: Korea Exchange