J Contentree (036420 KQ ) Look beyond 4Q18 to 2019

3Q18 review: Megabox margin improvement; Amortization of old dramas Media For 3Q18, J Contentree delivered consolidated revenue of W157bn (+35.6% YoY; all growth figures hereafter are YoY) and operating profit of W18.2bn (+71.3%). The results were slightly below our estimate and the consensus, but were still better than Results Comment initiall y feared. By business segment, operating profit was W15bn for multiplex and November 7, 2018 W3.3bn for broadcasting. The latest results showed improved margins at Megabox and included amortization expenses for older drama titles (around W3bn). Multiplex: Revenue and ope rating profit were W102.2bn (+35.6%) and W15bn (+64.6%), respectively. The overall market grew 11.5% in the quarter, thanks to higher ticket prices (+6.7%) and Chuseok-related theater attendance growth (+4.5%). While the Chuseok (Maintain) Buy effects were more muted than expected, Megabox’s theater attendance at directly- operated sites expanded 16.6% on market share gains (+1.1%p). Encouragingly, margins Target Price(12M, W) ▼ 6,500 improved on cost efficiency (OP margin of 14.7%), and the film On Your Wedding Day (distributed by Megabox) contributed to profits. Share Price (11/06/18, W) 4,650 Broadcasting (JTBC Content Hub + parent): Revenue and operating profit were W55.5bn (+49.4%) and W3.3bn (+49.1%), respectively. Revenue and profit continued to Expected Return 40% grow, supported by the addition of Monday/Tuesday drama slots. Licensing sales included the sale of Life (to Netflix [NFLX US/CP: US$315.44]) and the overseas sale of Misty . As in 2Q18, there was some early amortization of older titles (around W3bn) in 3Q18. We believe that, in light of strong sales in the quarter, the company decided to OP (18F, Wbn) 43 book some expenses early to smooth out potential earnings volatility. (E arly Consensus OP (18F, Wbn) 48 amortization should lead to fewer amortization expenses in the future.) We see such cases gradually decreasing going forward, given the company’s strengthening EPS Growth (18F, %) 216.0 production capabilities and diversifying demand base. Market EPS Growth (18F, %) 11.6 P/E (18F, x) 27.6 Look beyond 4Q18 to 2019 Market P/E (18F, x) 8.4 We remain optimistic on the growth of the broadcasting business in 2019. It looks KOSDAQ 691.55 increasingly likely JTBC will add dramas to its Wednesday/Thursday programming. Key variables for bot h top line (number of titles produced) and profits (licensing sales) also Market Cap (Wbn) 670 look favorable. Proceeds from the recent share issue should give the company the ability to respond to JTBC’s increasing programming, while the company should also be Shares Outstanding (mn) 144 able to demand higher prices for its tentpole content. Free Float (%) 65.6 Foreign Ownership (%) 2.3 According to the company’s disclosure, J Contentree plans to spend more than half (W63.3bn) of its equity issue proceeds next year. The company will dedicate 76% Beta (12M) 0.98 (W48.3bn) of this to securing web novel/webtoon intel lectual property (IP) and to 52-Week Low 3,946 investing in writers/producers. Indeed, the company is currently working on two or 52-Week High 8,054 more tentpole titles and is actively looking to acquire production companies. Given the much shorter cycle of drama production/programming (six to eight months) compared (%) 1M 6M 12M to films, we could see earnings leverage from increased production budgets next year. Absolute -21.2 -31.3 17.8 That said, Megabox faces a tough comparison in 4Q18, due to the difference in timing of Relative -11.8 -15.0 19.9 the Chuseok holiday and the strong box-office performan ce of several films late last year. While market share and profit margins remain well-managed, we have revised down our

230 J Contentree KOSDAQ box-office market forecast. Meanwhile, we see a strong chance of additional overseas licensing sales of Something in the Rain , as well as the sale of Life in Japan in 4Q18. 180 Cut TP, but maintain Buy 130 We cut our target price on J Contentree to W6,500, but maintain our Buy rating. We lowered our valuation of the multiplex business to reflect the sector de-rating stemming 80 from platform diversification and the softness of the domestic market. That said, we 10.17 2.18 6.18 10.18 believe the three key components of the broadcasting business—demand, investment, and sales—will be supportive in 2019. If any positive changes emerge, such as drama slot Mirae Asset Daewoo Co., Ltd. additions and sales to new markets, this would prompt us to raise our 2019 estimates.

[ Media ] FY (Dec.) 12/14 12/15 12/16 12/17 12/18F 12/19F Revenue (Wbn) 369 306 335 420 514 628 Jeong -yeob Park +822 -3774 -1652 OP (Wbn) 36 33 29 33 43 65 [email protected] OP Margin (%) 9.8 10.8 8.7 7.9 8.4 10.4

NP (Wbn) 0 11 19 6 21 27 EPS (W) -1 121 159 53 168 189 ROE (%) -0.1 15.0 26.3 5.3 12.7 14.1

P/E (x) - 44.2 23.1 97.5 27.6 24.6 P/B (x) 2.3 9.6 5.0 3.8 3.6 3.2 Dividend Yield (%) 0.0 0.0 0.0 0.0 0.0 0.0 Note: All figures are based on consolidated K-IFRS; NP refers to net profit attributable to controlling interests Source: Company data, Mirae Asset Daewoo Research estimates

November 7, 2018 J Contentree

Earnings forecasts and valuation

Table 1. Target price calculation (Wbn, x) Valuation - SOTP (2019F) Current share price (W) 4,650 Share count (mn shares) 144.1 Includes issuance of 30mn new shares Market value 670.1 (a) Megabox 346 Based on 77% equity stake 2019F EBITDA 50.0 Target EV/EBITDA 9.0 (b) Broadcasting 756 2019F EBIT (controlling interests) 23.6 Based on 42.4% stake in JTBC Content Hub Target EV/EBIT 32.0 20% discount to 2019F target EV/EBIT for Studio Dragon Controlling interests (42.4%) 9.8 2019F EBIT (IP) 13.8 Fair EV 1,103 (a) + (b) Net debt 173 Deducted debt repayment (W40bn) after share issue Fair market value 930 Target price (W) 6,500 Cut TP to W6,500 Source: Mirae Asset Daewoo Research estimates

Figure 1. Proceeds from rights issue to be spent in 2019

(Wbn) 70 Domestic/overseas platforms Original IP (writers, producton studios, etc.) 60 5 Film content 50 Drama content 16.3 10 40 10 10 30 9.5 20 32 10 10 19

0 3 2018 2019 2020

Source: Company data, Mirae Asset Daewoo Research estimates

Mirae Asset Daewoo Research 2 November 7, 2018 J Contentree

Table 2. Consolidated quarterly and annual earnings (Wbn, %, mn ) 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18P 4Q18F 2017 2018F 2019F Revenue 87 97 116 121 110 111 157 136 420 514 628 Megabox 68 57 84 81 70 65 102 75 291 312 319 Box office 39 33 45 46 40 39 56 43 163 178 181 Concession 12 10 13 14 12 12 17 13 49 53 54 Screen ads 9 7 10 10 9 9 12 9 36 39 40 Other 8 7 16 11 9 6 17 10 43 42 43 Broadcasting 20 54 37 50 48 64 55 69 162 236 342 JTBC Content Hub 17 41 28 41 30 50 36 45 127 161 229 J Contentree (IP) 4 13 9 9 17 14 20 24 35 75 113 Operating profit 5.2 8.9 10.7 8.6 4.0 8.2 18.2 12.6 33.3 43.1 65.0 OP margin (%) 6.0 9.2 9.2 7.1 3.7 7.4 11.6 9.3 7.9 8.4 10.4 Megabox 4.3 0.0 9.1 12.5 3.1 1.7 15.0 6.6 25.9 26.3 28.5 Broadcasting 1.0 9.0 2.2 -0.5 1.1 6.6 3.3 6.1 11.7 17.1 37.0 JTBC Content Hub 1.0 6.9 2.2 -0.2 0.9 4.8 2.5 4.3 9.9 12.5 23.2 J Contentree (IP) -0.1 2.2 0.0 -0.3 0.2 1.8 0.8 1.8 1.8 4.6 13.8 Pretax profit 5.1 8.8 8.1 2.4 7.9 9.3 16.1 11.5 24.4 44.8 60.8 Net profit 3.8 6.3 1.7 -0.9 6.6 6.6 12.7 8.8 10.9 34.6 46.2 Net margin (%) 4.4 6.5 1.5 -0.8 6.0 5.9 8.1 6.4 2.6 6.7 7.4 Net profit attributable to 3.5 3.2 -1.0 0.8 4.6 2.5 9.7 4.6 6.4 21.5 27.2 controlling interests YoY Revenue -5.3 21.2 9.6 108.6 26.2 15.2 35.6 12.6 25.4 22.3 22.1 Megabox 6.5 11.5 7.9 31.9 3.1 13.1 21.0 -7.8 14.0 7.2 2.2 Broadcasting 6.2 178.8 101.7 91.0 134.6 18.3 49.1 37.8 94.4 46.0 44.8 JTBC Content Hub -13.3 113.1 52.7 55.6 82.0 21.4 26.3 10.1 52.6 26.8 42.1 J Contentree (IP) - - - - 368.2 8.1 120.1 159.5 - 116.0 50.6 Operating profit -56.8 404.7 -30.9 TTB -22.8 -7.6 71.3 46.7 15.2 29.3 50.8 Net profit -42.8 TTB -85.9 TTR 74.4 4.7 630.6 TTB -51.4 218.1 33.4 Key assumptions Domestic attendance 52.3 45.0 64.0 58.6 51.3 45.1 66.8 50.4 219.9 213.6 213.6 Growth (%) 5.7 -0.3 -11.6 17.2 -1.9 0.1 4.5 -14.0 1.3 -2.8 0.0 Megabox attendance 10.2 8.6 12.2 11.7 10.2 9.1 13.7 10.3 42.7 43.3 43.7 Megabox share 19.6 19.2 19.0 20.0 20.0 20.1 20.5 20.5 19.4 20.3 20.5 Source: Company data, Mirae Asset Daewoo Research estimates

Table 3. Earnings forecast revisions (Wbn, %, %p) Previous Revised Change 18F 19F 18F 19F 18F 19F Revenue 506 613 514 628 1.5 2.3 Operating profit 47 68 43 65 -7.9 -4.5 Net profit 21 28 21 27 0.5 -3.9 OP margin 9.2 11.1 8.4 10.4 -0.9 -0.7 Net margin 4.2 4.6 4.2 4.3 0.0 -0.3 Note: Based on consolidated K-IFRS Source: Company data, Mirae Asset Daewoo Research estimates

Mirae Asset Daewoo Research 3 November 7, 2018 J Contentree

Figure 2. Drama production costs average W500mn/episode Figure 3. Selling prices of Netflix-bound Korean dramas

(Wbn) (Wbn) s (%) 2.1 35 Estimated price (L) 80 % of production costs (R) 1.8 30 70 1.5 25

1.2 20 60 0.9 15

0.6 10 50 0.3 5 0.0 0 40 Man to Man, Something in Mr. Sunshine (tvN) Memories of the Alhambra the Rain, Life (JTBC) (tvN) Stranger (4/17-) Man to Man (4/17-) A Korean Odyssey Mr. Sunshine (12/17-) (7/18-)

Source: Press reports, Mirae Asset Daewoo Research Source: Press reports, Mirae Asset Daewoo Research

Figure 4. Recent drama The Beauty Inside on track to becoming a hit

(%) 10 Strong Girl Bong-soon (JTBC) 8 Misty (JTBC)

Something in the Rain (JTBC) 6 Gangnam Beauty (JTBC) Life (JTBC) 4 The Beauty Inside (JTBC) Man to Man (JTBC)

2

0 Ep. 1 Ep. 2 Ep. 3 Ep. 4 Ep. 5 Ep. 6 Ep. 7 Ep. 8 Ep. 9 Ep. 10 Ep. 11 Ep. 12 Ep. 13 Ep. 14 Ep. 15 Ep. 16

Source: AGB Nielsen, Mirae Asset Daewoo Research

Figure 5. Drama viewership on an uptrend following IP investments

(%) 15 Direct investment in drama IP 12 Avg = 5.7% Avg = 2.9% 9 6 3 0

Source: AGB Nielsen, Mirae Asset Daewoo Research

Mirae Asset Daewoo Research 4 November 7, 2018 J Contentree

Table 4. Major box-office hits in 3Q17 Quarterly revenue Quarterly admissions Total revenue Total admissions Release date Title Distributor (Wbn) (mn) (Wbn) (mn) Aug. 2nd A Taxi Driver Showbox 95.8 12.2 95.9 12.2 Jul. 5th Spider-Man: Homecoming Sony Pictures 59.1 7.3 59.1 7.3 Jul. 26 th The Battleship Island CJ E&M 50.5 6.6 50.5 6.6 Aug. 9th Midnight Runners Lotte 44.4 5.7 44.4 5.7 Jul. 26 th Despicable Me 3 Universal Pictures 24.2 3.3 24.2 3.3 Jul. 20 th Dunkirk CJ E&M 24.5 2.8 24.6 2.8 Sep. 6th Memoir of a Murderer Showbox 20.9 2.6 21.4 2.7 Aug. 15 th War for the Planet of the Apes 20 th Fox 16.8 2.1 16.9 2.1 Aug. 10 th Annabelle: Creation Warner Bros. 15.5 1.9 15.5 1.9 Jun. 28 th Anarchist from Colony Megabox Plus M 14.3 1.8 18.1 2.4 Source: KOFIC, Mirae Asset Daewoo Research

Table 5. Major box-office hits in 3Q18 Quarterly revenue Quarterly admissions Total revenue Total admissions Release date Title Distributor (Wbn) (mn) (Wbn) (mn) Aug. 1st Along With the Gods: The Last 49 Days Lotte 102.6 12.3 102.6 12.3 Jul. 25 th Mission: Impossible – Fallout Lotte 55.9 6.6 55.9 6.6 Jul. 4th Ant-Man and the Wasp Disney 47.5 5.4 47.5 5.4 Aug. 8th The Spy Gone North CJ E&M 42.8 5.0 42.8 5.0 Sep. 19 th The Great Battle NEW 38.9 4.5 39.6 4.6 Jul. 18 th Incredibles 2 Disney 24.6 3.0 24.6 3.0 Aug. 29 th Searching Sony Pictures 25.0 2.9 25.1 2.9 Aug. 22 nd On Your Wedding Day Megabox Plus M 23.7 2.8 23.7 2.8 Jun. 27 th The Witch: Part 1. The Subversion Warner Bros. 21.7 2.5 27.2 3.2 Aug . 15 th The Witness NEW 21.7 2.5 21.7 2.5 Source: KOFIC, Mirae Asset Daewoo Research

Table 6. Major box-office hits in 4Q17 Quarterly revenue Quarterly admissions Total revenue Total admissions Release date Title Distributor (Wbn) (mn) (Wbn) (mn) Dec. 20 th Along With the Gods: The Two Worlds Lotte 68.4 8.5 115.7 14.4 Oct. 3rd The Outlaws Megabox Plus M 56.1 6.9 56.3 6.9 Oct. 25 th Thor: Ragnarok Disney 39.2 4.9 39.2 4.9 Nov. 22 nd The Swindlers Showbox 31.3 4.0 31.3 4.0 Dec. 14 th Steel Rain NEW 32.0 4.0 35.5 4.5 Oct. 3rd The Fortress CJ E&M 31.1 3.8 31.2 3.8 Sep. 27 th Kingsman: The Golden Circle 20 th Fox 27.4 3.2 41.0 4.9 Dec. 27 th 1987: When the Day Comes CJ E&M 15.3 1.9 58.2 7.2 Sep. 21 st I Can Speak Lotte 14.6 1.9 25.5 3.3 Nov. 15 th Justice League Warner Bros. 14.6 1.8 14.6 1.8 Source: KOFIC, Mirae Asset Daewoo Research

Table 7. Most-anticipated titles in 4Q18 Period Release Title Distributor Director Cast 4Q18 Oct. 3rd Venom Sony Ruben Fleischer Tom Hardy, Michelle Williams Oct. 18 th First Man UPI Damien Chazelle Ryan Gosling Oct. 24 th Rampant NEW Kim Seong-hun Hyun Bin, Jang Dong-gun Nov. National Bankruptcy Day Warner Bros. Choi Kook-hee Kim Hye-soo, Yoo Ah-in

Dec. 12 th Spider-Man: Into the Spider-Verse Lotte Peter Ramsey

Dec. 12 th Take Point CJ E&M Kim Byung-woo Ha Jung-woo, Lee Sun-kyun Dec. 26 th Drug King Showbox Woo Min-ho Song Kang-ho, Jo Jung-suk Source: KOFIC, Mirae Asset Daewoo Research

Mirae Asset Daewoo Research 5 November 7, 2018 J Contentree

J Contentree (036420 KQ/Buy/TP: W6,500)

Comprehensive Income Statement (Summarized) Statement of Financial Condition (Summarized) (Wbn) 12/16 12/17 12/18F 12/19F (Wbn) 12/16 12/17 12/18F 12/19F Revenue 335 420 514 628 Current Assets 136 208 252 360 Cost of Sales 153 200 252 294 Cash and Cash Equivalents 55 49 73 130 Gross Profit 182 220 262 334 AR & Other Receivables 38 85 96 123 SG&A Expenses 154 187 219 269 Inventories 23 24 27 34 Operating Profit (Adj) 29 33 43 65 Other Current Assets 20 50 56 73 Operating Profit 29 33 43 65 Non-Current Assets 414 454 466 460 Non-Operating Profit 6 -9 2 -4 Investments in Associates 1 0 1 1 Net Financial Income -1 -5 0 0 Property, Plant and Equipment 213 193 206 189 Net Gain from Inv in Associates 7 0 0 0 Intangible Assets 76 84 75 60 Pretax Profit 35 24 45 61 Total Assets 550 662 719 820 Income Tax 9 13 10 15 Current Liabilities 330 289 307 355 Profit from Continuing Operations 26 11 35 46 AP & Other Payables 56 66 74 95 Profit from Discontinued Operations -3 0 0 0 Short-Term Financial Liabilities 235 144 144 145 Net Profit 22 11 35 46 Other Current Liabilities 39 79 89 115 Controlling Interests 19 6 21 27 Non-Current Liabilities 96 138 142 150 Non-Controlling Interests 3 4 13 19 Long-Term Financial Liabilities 66 112 114 114 Total Comprehensive Profit 25 9 35 46 Other Non-Current Liabilities 30 26 28 36 Controlling Interests 22 5 15 17 Total Liabilities 425 426 450 505 Non-Controlling Interests 3 4 19 29 Controlling Interests 84 159 180 207 EBITDA 43 59 82 97 Capital Stock 57 57 57 57 FCF (Free Cash Flow) -73 -36 34 92 Capital Surplus -51 14 14 14 EBITDA Margin (%) 12.8 14.0 16.0 15.4 Retained Earnings 69 75 97 124 Operating Profit Margin (%) 8.7 7.9 8.4 10.4 Non-Controlling Interests 41 77 89 108 Net Profit Margin (%) 5.7 1.4 4.1 4.3 Stockholders' Equity 125 236 269 315

Cash Flows (Summarized) Forecasts/Valuations (Summarized) (Wbn) 12/16 12/17 12/18F 12/19F 12/16 12/17 12/18F 12/19F Cash Flows from Op Activities 18 -4 65 92 P/E (x) 23.1 97.5 27.6 24.6 Net Profit 22 11 35 46 P/CF (x) 11.5 10.2 7.0 7.2 Non-Cash Income and Expense 16 51 50 47 P/B (x) 5.0 3.8 3.6 3.2 Depreciation 13 16 18 17 EV/EBITDA (x) 16.9 14.8 11.0 8.9 Amortization 1 10 21 15 EPS (W) 159 53 168 189 Others 2 25 11 15 CFPS (W) 321 509 663 645 Chg in Working Capital -5 -42 -7 14 BPS (W) 736 1,353 1,284 1,473 Chg in AR & Other Receivables -7 -44 9 -20 DPS (W) 0 0 0 0 Chg in Inventories -10 -1 -3 -8 Payout ratio (%) 0.0 0.0 0.0 0.0 Chg in AP & Other Payables 25 10 -15 5 Dividend Yield (%) 0.0 0.0 0.0 0.0 Income Tax Paid -12 -16 -9 -15 Revenue Growth (%) 9.5 25.4 22.4 22.2 Cash Flows from Inv Activities -66 -75 -43 -36 EBITDA Growth (%) -14.0 37.2 39.0 18.3 Chg in PP&E -91 -33 -31 0 Operating Profit Growth (%) -12.1 13.8 30.3 51.2 Chg in Intangible Assets -1 -1 2 0 EPS Growth (%) 31.4 -66.7 217.0 12.5 Chg in Financial Assets 10 -44 -14 -36 Accounts Receivable Turnover (x) 10.2 9.0 7.9 7.9 Others 16 3 0 0 Inventory Turnover (x) 17.8 17.9 20.4 20.6 Cash Flows from Fin Activities 70 73 1 1 Accounts Payable Turnover (x) 14.6 15.0 14.7 14.2 Chg in Financial Liabilities 40 -44 2 1 ROA (%) 4.5 1.8 5.0 6.0 Chg in Equity 0 65 0 0 ROE (%) 26.3 5.3 12.7 14.1 Dividends Paid 0 0 -1 0 ROIC (%) 8.2 5.0 12.1 19.3 Others 30 52 0 0 Liability to Equity Ratio (%) 340.1 180.8 167.2 160.2 Increase (Decrease) in Cash 23 -6 24 57 Current Ratio (%) 41.4 72.2 82.1 101.5 Beginning Balance 33 55 49 74 Net Debt to Equity Ratio (%) 193.6 73.8 55.0 25.9 Ending Balance 55 49 74 130 Interest Coverage Ratio (x) 3.1 3.8 0.0 0.0 Source: Company data, Mirae Asset Daewoo Research estimates

Mirae Asset Daewoo Research 6 November 7, 2018 J Contentree

APPENDIX 1

Important Disclosures & Disclaimers 2-Year Rating and Target Price History

Company (Code) Date Rating Target Price (W) J Contentree J Contentree(036420) 11/07/2018 Buy 6,500 10,000 08/02/2018 Buy 8,400 8,000 07/05/2018 Trading Buy 7,988 05/13/2018 Trading Buy 8,368 6,000 07/23/2017 Buy 5,515 4,000 04/17/2017 Buy 4,755 01/03/2017 No Coverage 2,000

11/14/2016 Buy 4,755 0 08/17/2016 Buy 4,659 11 16 11 17 11 18

Stock Ratings Industry Ratings Buy : Relative performance of 20% or greater Overweight : Fundamentals are favorable or improving Trading Buy : Relative performance of 10% or greater, but with volatility Neutral : Fundamentals are steady without any material changes Hold : Relative performance of -10% and 10% Underweight : Fundamentals are unfavorable or worsening Sell : Relative performance of -10% Ratings and Target Price History (Share price (─), Target price (▬), Not covered ( ■), Buy (▲), Trading Buy (■), Hold (●), Sell ( ◆)) * Our investment rating is a guide to the relative return of the stock versus the market over the next 12 months. * Although it is not part of the official ratings at Mirae Asset Daewoo Co., Ltd., we may call a trading opportunity in case there is a technical or short-term material development. * The target price was determined by the research analyst through valuation methods discussed in this report, in part based on the analyst’s estimate of future earnings. * The achievement of the target price may be impeded by risks related to the subject securities and companies, as well as general market and economic conditions.

Equity Ratings Distribution & Investment Banking Services Buy Trading Buy Hold Sell Equity Ratings Distribution 73.71% 13.92% 12.37% 0.00% Investment Banking Services 82.61% 4.35% 13.04% 0.00% * Based on recommendations in the last 12-months (as of September 30, 2018)

Disclosures As of the publication date, Mirae Asset Daewoo Co., Ltd. and/or its affiliates do not have any special interest with the subject company and do not own 1% or more of the subject company's shares outstanding.

Analyst Certification The research analysts who prepared this report (the “Analysts”) are registered with the Korea Financial Investment Association and are subject to Korean securities regulations. They are neither registered as research analysts in any other jurisdiction nor subject to the laws or regulations thereof. Each Analyst responsible for the preparation of this report certifies that (i) all views expressed in this report accurately reflect the personal views of the Analyst about any and all of the issuers and securities named in this report and (ii) no part of the compensation of the Analyst was, is, or will be directly or indirectly related to the specific recommendations or views contained in this report. Mirae Asset Daewoo Co., Ltd. (“Mirae Asset Daewoo”) policy prohibits its Analysts and members of their households from owning securities of any company in the Analyst’s area of coverage, and the Analysts do not serve as an officer, director or advisory board member of the subject companies. Except as otherwise specified herein, the Analysts have not received any compensation or any other benefits from the subject companies in the past 12 months and have not been promised the same in connection with this report. Like all employees of Mirae Asset Daewoo, the Analysts receive compensation that is determined by overall firm profitability, which includes revenues from, among other business units, the institutional equities, investment banking, proprietary trading and private client division. At the time of publication of this report, the Analysts do not know or have reason to know of any actual, material conflict of interest of the Analyst or Mirae Asset Daewoo except as otherwise stated herein.

Disclaimers This report was prepared by Mirae Asset Daewoo, a broker-dealer registered in the Republic of Korea and a member of the Korea Exchange. Information and opinions contained herein have been compiled in good faith and from sources believed to be reliable, but such information has not been independently verified and Mirae Asset Daewoo makes no guarantee, representation or warranty, express or implied, as to the fairness, accuracy, completeness or correctness of the information and opinions contained herein or of any translation into English from the Korean language. In case of an English translation of a report prepared in the Korean language, the original Korean language report may have been made available to investors in advance of this report. The intended recipients of this report are sophisticated institutional investors who have substantial knowledge of the local business environment, its common practices, laws and accounting principles and no person whose receipt or use of this report would violate any laws or regulations or subject Mirae Asset Daewoo or any of its affiliates to registration or licensing requirements in any jurisdiction shall receive or make any use hereof. This report is for general information purposes only and it is not and shall not be construed as an offer or a solicitation of an offer to effect transactions in any securities or other financial instruments. The report does not constitute investment advice to any person and such person shall not be treated as a client of Mirae Asset Daewoo by virtue of receiving this report. This report does not take into account the particular investment objectives, financial

Mirae Asset Daewoo Research 7 November 7, 2018 J Contentree

situations, or needs of individual clients. The report is not to be relied upon in substitution for the exercise of independent judgment. Information and opinions contained herein are as of the date hereof and are subject to change without notice. The price and value of the investments referred to in this report and the income from them may depreciate or appreciate, and investors may incur losses on investments. Past performance is not a guide to future performance. Future returns are not guaranteed, and a loss of original capital may occur. Mirae Asset Daewoo, its affiliates and their directors, officers, employees and agents do not accept any liability for any loss arising out of the use hereof. Mirae Asset Daewoo may have issued other reports that are inconsistent with, and reach different conclusions from, the opinions presented in this report. The reports may reflect different assumptions, views and analytical methods of the analysts who prepared them. Mirae Asset Daewoo may make investment decisions that are inconsistent with the opinions and views expressed in this research report. Mirae Asset Daewoo, its affiliates and their directors, officers, employees and agents may have long or short positions in any of the subject securities at any time and may make a purchase or sale, or offer to make a purchase or sale, of any such securities or other financial instruments from time to time in the open market or otherwise, in each case either as principals or agents. Mirae Asset Daewoo and its affiliates may have had, or may be expecting to enter into, business relationships with the subject companies to provide investment banking, market-making or other financial services as are permitted under applicable laws and regulations. No part of this document may be copied or reproduced in any manner or form or redistributed or published, in whole or in part, without the prior written consent of Mirae Asset Daewoo.

Distribution United Kingdom: This report is being distributed by Mirae Asset Securities (UK) Ltd. in the United Kingdom only to (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”), and (ii) high net worth companies and other persons to whom it may lawfully be communicated, falling within Article 49(2)(A) to (E) of the Order (all such persons together being referred to as “Relevant Persons”). This report is directed only at Relevant Persons. Any person who is not a Relevant Person should not act or rely on this report or any of its contents. United States: Mirae Asset Daewoo is not a registered broker-dealer in the United States and, therefore, is not subject to U.S. rules regarding the preparation of research reports and the independence of research analysts. This report is distributed in the U.S. by Mirae Asset Securities (USA) Inc., a member of FINRA/SIPC, to “major U.S. institutional investors” in reliance on the exemption from registration provided by Rule 15a-6(b)(4) under the U.S. Securities Exchange Act of 1934, as amended. All U.S. persons that receive this document by their acceptance hereof represent and warrant that they are a major U.S. institutional investor and have not received this report under any express or implied understanding that they will direct commission income to Mirae Asset Daewoo or its affiliates. Any U.S. recipient of this document wishing to effect a transaction in any securities discussed herein should contact and place orders with Mirae Asset Securities (USA) Inc. Mirae Asset Securities (USA) Inc. accepts responsibility for the contents of this report in the U.S., subject to the terms hereof, to the extent that it is delivered to a U.S. person other than a major U.S. institutional investor. Under no circumstances should any recipient of this research report effect any transaction to buy or sell securities or related financial instruments through Mirae Asset Daewoo. The securities described in this report may not have been registered under the U.S. Securities Act of 1933, as amended, and, in such case, may not be offered or sold in the U.S. or to U.S. persons absent registration or an applicable exemption from the registration requirements. Hong Kong: This report is distributed in Hong Kong by Mirae Asset Securities (HK) Limited, which is regulated by the Hong Kong Securities and Futures Commission. The contents of this report have not been reviewed by any regulatory authority in Hong Kong. This report is for distribution only to professional investors within the meaning of Part I of Schedule 1 to the Securities and Futures Ordinance of Hong Kong (Cap. 571, Laws of Hong Kong) and any rules made thereunder and may not be redistributed in whole or in part in Hong Kong to any person. All Other Jurisdictions: Customers in all other countries who wish to effect a transaction in any securities referenced in this report should contact Mirae Asset Daewoo or its affiliates only if distribution to or use by such customer of this report would not violate applicable laws and regulations and not subject Mirae Asset Daewoo and its affiliates to any registration or licensing requirement within such jurisdiction.

Mirae Asset Daewoo Research 8 November 7, 2018 J Contentree

Mirae Asset Daewoo International Network

Mirae Asset Daewoo Co., Ltd. (Seoul) Mirae Asset Securities (HK) Ltd. Mirae Asset Securities (UK) Ltd. Global Equity Sales Team Suites 1109-1114, 11th Floor 41st Floor, Tower 42 Mirae Asset Center 1 Building Two International Finance Centre 25 Old Broad Street, 26 Eulji-ro 5-gil, Jung-gu, Seoul 04539 8 Finance Street, Central London EC2N 1HQ Korea Hong Kong United Kingdom China Tel: 82-2-3774-2124 Tel: 852-2845-6332 Tel: 44-20-7982-8000

Mirae Asset Securities (USA) Inc. Mirae Asset Wealth Management (USA) Inc. Mirae Asset Wealth Management (Brazil) CCTVM 810 Seventh Avenue, 37th Floor 555 S. Flower Street, Suite 4410, Rua Funchal, 418, 18th Floor, E-Tower Building Vila New York, NY 10019 Los Angeles, California 90071 Olimpia USA USA Sao Paulo - SP 04551-060 Brasil Tel: 1-212-407-1000 Tel: 1-213-262-3807 Tel: 55-11-2789-2100

PT. Mirae Asset Sekuritas Indonesia Mirae Asset Securities (Singapore) Pte. Ltd. Mirae Asset Securities (Vietnam) LLC Equity Tower Building Lt. 50 6 Battery Road, #11-01 7F, Saigon Royal Building Sudirman Central Business District Singapore 049909 91 Pasteur St. Jl. Jend. Sudirman, Kav. 52 -53 Jakarta Selatan Republic of Singapore District 1, Ben Nghe Ward, Ho Chi Minh City 12190 Vietnam Indonesia Tel: 62-21-515-3281 Tel: 65-6671-9845 Tel: 84-8-3911-0633 (ext.110) Mirae Asset Securities Mongolia UTsK LLC Mirae Asset Investment Advisory (Beijing) Co., Ltd Beijing Representative Office #406, Blue Sky Tower, Peace Avenue 17 2401B, 24th Floor, East Tower, Twin Towers 2401A, 24th Floor, East Tower, Twin Towers 1 Khoroo, Sukhbaatar District B12 Jianguomenwai Avenue, Chaoyang District B12 Jianguomenwai Avenue, Chaoyang District Ulaanbaatar 14240 Beijing 100022 Beijing 100022 Mongolia China China

Tel: 976-7011-0806 Tel: 86-10-6567-9699 Tel: 86-10-6567-9699 (ext. 3300) Shanghai Representative Office Ho Chi Minh Representative Office 38T31, 38F, Shanghai World Financial Center 7F, Saigon Royal Building 100 Century Avenue, Pudong New Area Shanghai 91 Pasteur St. 200120 District 1, Ben Nghe Ward, Ho Chi Minh City China Vietnam

Tel: 86-21-5013-6392 Tel: 84-8-3910-7715

Mirae Asset Daewoo Research 9