February 21, 2018

KOREA Morning Focus

Company News & Analysis Major Indices Close Chg Chg (%) Innox Advanced Materials (272290/Buy/TP: W100,000) Initiate coverage KOSPI 2,415.12 -27.70 -1.13 A multi-faceted OLED materials supplier KOSPI 200 312.83 -3.78 -1.19 KOSDAQ 864.41 -11.40 -1.30 Pearl Abyss (263750/Buy/TP: W300,000) Initiate coverage Aspiring to become a multi-player Turnover ('000 shares, Wbn) Volume Value KOSPI 416,872 5,071 KOSPI 200 55,142 2,924 KOSDAQ 786,529 5,460

Market Cap (Wbn) Value KOSPI 1,603,559 KOSDAQ 276,389

KOSPI Turnover (Wbn) Buy Sell Net Foreign 1,138 1,109 29 Institutional 751 1,046 -296 Retail 3,166 2,907 258

KOSDAQ Turnover (Wbn) Buy Sell Net Foreign 356 496 -140 Institutional 214 284 -70 Retail 4,903 4,678 225

Program Buy / Sell (Wbn) Buy Sell Net KOSPI 896 978 -81 KOSDAQ 181 304 -123

Advances & Declines Advances Declines Unchanged KOSPI 318 503 63 KOSDAQ 556 618 79

KOSPI Top 5 Most Active Stocks by Value (Wbn) Price (W) Chg (W) Value Electronics 2,370,000 -49,000 480 KODEX KOSDAQ150 22,920 -1,075 390 LEVERAGE Celltrion 304,000 -12,500 333 DongsungPharm 21,300 3,500 290 KODEX LEVERAGE 16,270 -430 201

KOSDAQ Top 5 Most Active Stocks by Value (Wbn) Price (W) Chg (W) Value AHNLAB 79,100 16,100 371 Sam Chun Dang Pharm 37,500 -8,000 251 Celltrion Healthcare 125,500 -4,400 188 SillaJen 91,000 -3,600 159 Alpha Holdings 35,650 -100 144 Note: As of February 20, 2018 Mirae Asset Daewoo Research This document is a summary of a report prepared by Mirae Asset Daewoo Co., Ltd. (“Mirae Asset Daewoo”) and published on our website. Please review the compliance notices contained in the original report. Information and opinions contained herein have been compiled in good faith from sources deemed to be reliable. However, the information has not been independently verified. Mirae Asset Daewoo makes no guarantee, representation or warranty, express or implied, as to the fairness, accuracy or completeness of the information and opinions contained in this document. Mirae Asset Daewoo accepts no responsibility or liability whatsoever for any loss arising from the use of this document or its contents or otherwise arising in connection therewith. Information and opinions contained herein are subject to change without notice. This document is for informational purposes only. It is not and should not be construed as an offer or solicitation of an offer to purchase or sell any securities or other financial instruments. This document may not be reproduced, further distributed or published in whole or in part for any purpose.

Innox Advanced Materials (272290 KQ) A multi-faceted OLED materials supplier

Technology A smartphone/OLED materials supplier Initiation Report Innox Advanced Materials manufactures materials used in smartphone and OLED February 21, 2018 production. Its main businesses are: 1) FPCB materials (35% of 2017 revenue), 2) semiconductor materials (14%), 3) SmartFlex (new material; 31%), and 4) OLED materials (20%). The company uses PI films, copper foil, and PET as key raw materials, and manufactures and supplies films tailored to customer needs. The company has a diversified customer base that includes OLED panel makers and FPCB suppliers. (Initiate) Buy Investment point 1: Poised to benefit from both large and small/mid-sized Target Price(12M, W) 100,000 OLED markets The OLED TV market is continuing to grow. Because OLED TVs are much more Share Price (02/20/18, W) 73,400 profitable than LCD TVs, many TV set makers are seeing an increasing need to enter the market. We believe LG Display’s (LGD) large-sized OLED panel shipments will grow Expected Return 36% from 1.73mn units in 2017 to 2.75mn units in 2018 and 3.63mn units in 2019.

Alongside LG Chem, Innox Advanced Materials currently supplies encapsulation films OP (17F, Wbn) 22 for large-sized OLED panels to LGD. Driven by the expansion of the OLED TV market, Consensus OP (17F, Wbn) - we forecast the company’s large-sized OLED materials revenue to grow to W78bn in 2018, from W56bn in 2017 and W33bn in 2016. We also expect the company to begin EPS Growth (17F, %) - supplying new products for small/mid-sized OLED panels this year. Market EPS Growth (17F, %) 45.4 P/E (17F, x) 23.0 Investment point 2: Higher revenue mix of products unexposed to PI films Market P/E (17F, x) 20,174.0 Rising prices of PI films have raised worries about margin erosion. PI films have been KOSDAQ 864.41 in shortage since 3Q17, and many domestic and foreign PI film suppliers have begun to raise prices in January 2018. Market Cap (Wbn) 636 Shares Outstanding (mn) 9 However, we believe the revenue share of products that do not use PI films—i.e., Free Float (%) 65.5 semiconductor and OLED materials—will increase from 32% in 2017 to 56% in 2019. Foreign Ownership (%) 11.3 Given that such products have a higher percentage of fixed costs, volume growth is Beta (12M) 0.71 likely to generate leverage effects. All in all, we believe the positive impact of product 52-Week Low 62,858 mix improvements on overall OP margin will outweigh the negative impact of higher 52-Week High 94,627 cost pressures.

(%) 1M 6M 12M Initiate with Buy rating and TP of W100,000 Absolute 5.6 2.5 0.0 We initiate our coverage on Innox Advanced Materials with a Buy rating and target Relative 7.5 -23.7 0.0 price of W100,000. We derived our target price by applying to our 12-month forward 150 Innox Advanced Materials EPS a P/E of 18x, the average multiple of domestic OLED materials suppliers. In 2018, KOSDAQ we expect the revenue and operating profit contribution of OLED materials to sharply 130 increase to 38% (from 20% in 2017) and 14% (from 1% in 2017), respectively. In our 110 view, the company deserves to be re-rated as it makes the shift from FPCB materials to

90 OLED materials.

70 2.17 6.17 10.17 2.18

Mirae Asset Daewoo Co., Ltd.

[ Display] FY (Dec.) 12/14 12/15 12/16 12/17F 12/18F 12/19F Revenue (Wbn) - - - 193 423 491 Chuljoong Kim +822-3774-1464 OP (Wbn) - - - 22 60 78 [email protected] OP margin (%) - - - 11.4 14.2 15.9

NP (Wbn) - - - 17 48 62 EPS (W) - - - 3,724 5,364 6,956 ROE (%) - - - 13.4 32.6 30.8

P/E (x) - - - 23.0 13.7 10.6 P/B (x) - - - 6.2 3.8 2.8 Dividend yield (%) - - - 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

Analysts who prepared this report are registered as research analysts in Korea but not in any other jurisdiction, including the U.S. PLEASE SEE ANALYST CERTIFICATIONS AND IMPORTANT DISCLOSURES & DISCLAIMERS IN APPENDIX 1 AT THE END OF REPORT.

Pearl Abyss

(263750 KQ) Aspiring to become a multi-player

Game Initiate coverage with Buy and TP of W300,000 Initiation Report We initiate our coverage on Pearl Abyss with a Buy rating and target price of W300,000. Founded in 2010, Pearl Abyss is a game developer well known for its February 21, 2018 flagship title Black Desert (PC online MMORPG). Our investment recommendation is based on three key points: 1) platform expansion; 2) intellectual property (IP) diversification; and 3) an inexpensive valuation.

2018 will mark beginning of platform expansion into mobile and console (Initiate) Buy We believe 2018 will mark the beginning of the company’s full-fledged platform expansion. Target Price(12M, W) 300,000 PC online: Pearl Abyss kicked off its PC online game business with the domestic launch Share Price (02/20/18, W) 242,900 of Black Desert in December 2014. The title’s overseas service began in the following year. The company initially relied on outside publishers to service the game in Expected Return 24% Japan/Russia (2015) and the US/Europe (2016). In 2017, however, the company shifted its strategy to direct publishing and currently services the game through its local subsidiaries in markets like Taiwan, Latin America, Turkey/Middle East, and Thailand/Southeast Asia. In 2017, the company derived its entire revenue from Black OP (18F, Wbn) 234 Desert, with 84% coming from overseas. This year, the game will also become available Consensus OP (18F, Wbn) 182 in China.

EPS Growth (18F, %) 288.5 Mobile: The company plans to release Black Desert Mobile (mobile MMORPG) on Market EPS Growth (18F, %) 8.6 February 28th. Since preregistrations started on November 23rd, 2017, Black Desert P/E (18F, x) 14.6 Mobile has attracted four million preregistrations—the second highest number for a th Market P/E (18F, x) 9.3 domestic mobile title. During a three-day closed beta test (CBT) from February 9 to th KOSDAQ 864.41 11 , the mobile game gained positive response for its graphics, character customizing, and combat/attack effects. Black Desert Mobile will initially feature five characters, but Market Cap (Wbn) 2,931 is likely to add more through content updates, considering that the PC title has a total Shares Outstanding (mn) 12 of 16 characters. The addition of characters should help extend the game’s longevity. Free Float (%) 46.1 Console: Black Desert will be launched on Microsoft’s Xbox in North America/Europe Foreign Ownership (%) 5.8 during 1H18. The game’s console version will subsequently become available on other Beta (12M) 0.84 platforms and in other regions. Console games represent 23% of the global game 52-Week Low 98,900 market, with North America/Europe making up the bulk (76%) of the global console 52-Week High 269,600 market. Pearl Abyss is developing new PC online titles with console versions in mind.

(%) 1M 6M 12M Focus on Black Desert Mobile in the short term and game diversification in Absolute -6.1 0.0 0.0 the medium/long term Relative -4.5 0.0 0.0 In the near term, we believe share price momentum will be determined by the potential success of Black Desert Mobile’s domestic release. With expectations on the 330 PearlAbyss Corp. KOSDAQ title already priced into share prices, if the title does better than expected, valuation 280 would become cheaper, fueling further share price gains. In the medium and long

230 term, we think business diversification and fundamental enhancement via the release of multi-platform (PC/mobile/console) titles and new IP titles will drive share price 180 momentum. 130

80 2.17 6.17 10.17 2.18

Mirae Asset Daewoo Co., Ltd.

[Internet/Game/Advertising] FY (Dec.) 12/15 06/16 12/17P 12/18F 12/19F 12/20F Revenue (Wbn) 0 34 117 431 438 447 Jee-hyun Moon +822-3774-1640 OP (Wbn) 0 28 64 234 236 238 [email protected] OP margin (%) - 82.4 54.7 54.3 53.9 53.2 NP (Wbn) 0 24 52 200 201 203 EPS (W) 0 2,379 4,276 16,614 16,678 16,785 ROE (%) 0.0 112.9 36.5 55.5 35.8 26.5 P/E (x) - - 57.9 14.6 14.6 14.5 P/B (x) - - 11.4 6.3 4.4 3.4 Dividend yield (%) - - 0.0 0.0 0.0 0.0 Note: All figures are based on consolidated K-IFRS; NP is attributable to controlling interests; annual figures are based on fiscal year ending in December and are annualized; figures before 2017 are based on fiscal year ending in June Source: Company data, Mirae Asset Daewoo Research estimates Analysts who prepared this report are registered as research analysts in Korea but not in any other jurisdiction, including the U.S. PLEASE SEE ANALYST CERTIFICATIONS AND IMPORTANT DISCLOSURES & DISCLAIMERS IN APPENDIX 1 AT THE END OF REPORT.

February 21, 2018 Pearl Abyss

Earnings forecast

Direct servicing and mobile title launch will lead to structural changes in earnings

There are two factors to consider when analyzing Pearl Abyss’s earnings.

1) PC online game service approach: The company has adopted a direct publishing approach (instead of using outside publishers) for Black Desert in countries it has entered since 2017. As a result, revenue recognition for the title has also changed from a net basis to a gross basis.

2) Mobile game launch: Black Desert Mobile, which will debut on February 28th, will be directly serviced by the company, meaning revenue will be booked on a gross basis. In terms of operating expenses, this will likely lead to structurally higher commission fees (paid to app stores) and marketing spending than before.

Table 1. Earnings trends and forecast (Wbn, %) 1Q17 2Q17 3Q17 4Q17 1Q18F 2Q18F 3Q18F 4Q18F 2016 2017 2018F Revenue 32 33 28 25 74 130 119 107 62 117 431 Black Desert (PC) 31 32 26 24 28 30 28 34 57 112 120 - Domestic 5 4 4 5 5 5 5 4 16 18 18 - Overseas 26 27 22 19 23 25 23 30 42 94 101 New titles (Black Desert 45 99 90 72 306 Mobile, etc.) Other 1 1 1 1 1 1 1 1 5 5 5 Operating profit 21 22 15 6 34 76 68 56 45 65 234 OP margin 65.7 66.8 54.7 25.6 46.5 57.9 57.2 52.6 72.6 55.1 54.4 Net profit 15 20 14 1 30 66 60 44 40 50 200 Net margin 47.8 59.4 49.1 4.6 41.2 50.5 49.9 41.3 65.7 42.2 46.4 YoY Revenue 91.6 93.1 117.9 62.7 132.7 295.3 332.9 331.0 183.8 90.3 267.6 Black Desert (PC) 84.2 112.9 130.1 67.7 -9.2 -4.8 6.9 42.7 182.4 96.9 6.7 - Domestic 77.9 39.5 -0.2 -7.8 0.9 14.3 9.4 -22.0 14.1 18.7 0.0 - Overseas 85.5 131.8 212.9 113.1 -11.0 -7.7 6.4 59.5 528.2 126.1 8.1 Other - -42.6 0.2 3.5 0.2 -1.7 3.3 -1.7 202.6 7.5 0.0 Operating profit 46.8 58.6 78.3 -22.0 64.9 242.7 352.4 786.3 273.1 44.8 264.3 Net profit 4.7 97.9 112.2 -88.3 100.5 235.6 339.7 3806.7 295.7 22.3 304.1 Notes: All figures are based on consolidated K-IFRS; annual figures are based on fiscal year ending in December and are annualized; figures before 2017 are based on fiscal year ending in June; Black Desert Mobile’s daily average revenue is estimated at W1.5bn in 1Q18, W1.1bn in 2Q18, W0.9bn in 2H18 Sources: Company data, Mirae Asset Daewoo Research estimates

Table 2. Long-term game release plans 1H18 2H18 Upcoming New PC/console game to be released (new IP; MMO Black Desert Mobile will debut in Korea on Feb. 28 games + FPS + AOS genres) Black Desert console version (on Microsoft’s Xbox) New mobile game to be released (new IP; MMO + expected to launch during 1H18 casual genres) 2019 2021 Upcoming New PC/console game (new IP) New PC/console game (new IP) games

Notes: Actual release schedule is subject to change Source: Company data, Mirae Asset Daewoo Research

Mirae Asset Daewoo Research 2 February 21, 2018 Pearl Abyss

Valuation

Revenue diversification through new title release to support re-rating

We present a target price of W300,000 on Pearl Abyss, which we derived by applying the 2018F average P/E of major domestic/Western game companies to our net profit (controlling interest) estimate. Based on the February 20th closing price, the stock is trading at a 2018F P/E of 14.6x, a discount to the global gaming sector. Looking ahead, we believe revenue diversification through new title releases will serve as a catalyst for re-rating.

Table 3. 12-month target price calculation (Wbn, x, W) Valuation Notes Operating value (1) 3,401 2018F NP attributable to Multiple controlling interests Based on 2018F average P/E of 200 17.0 3,401 major domestic/Western game

companies Investment asset value (2) 5 Available-for-sale financial 5 As of 4Q17 assets Investments in affiliates 1 As of 4Q17 Total asset value (1+2=3) 3,406 Net debt (4) -257 As of 4Q17 Net asset value (3-4) 3,663 Total shares outstanding No. of shares (‘000 shares) 12,066 (including treasury stock) Target price 300,000 Source: Mirae Asset Daewoo Research estimates

Table 4. Earnings and valuation comparison of global game companies (Wbn, x, %) Market Revenue Operating profit Net profit P/E EV/EBITDA P/B ROE Company cap 17F 18F 17F 18F 17F 18F 17F 18F 17F 18F 17F 18F 17F 18F Games 12,244 2,425 2,597 510 514 363 365 51.5 39.0 24.7 17.1 3.9 2.8 11.6 7.3 NCsoft 8,600 1,758 2,491 585 998 444 734 22.3 11.8 13.9 6.9 3.6 2.6 19.8 25.5 Pearl Abyss 2,931 117 431 65 234 52 200 57.9 14.6 42.6 10.6 11.4 6.3 36.5 55.5 Com2uS 1,931 512 573 197 211 145 156 12.1 12.4 5.2 5.1 2.2 2.1 20.8 18.6 NHN 1,499 909 1,002 35 58 9 52 86.0 26.3 14.8 13.4 0.9 1.0 1.1 3.8 Entertainment Activision Blizzard 56,967 7,934 8,147 1,480 2,851 309 2,201 43.7 26.8 19.0 17.9 5.1 4.8 2.9 16.1 Electronic Arts 41,492 5,566 5,623 1,406 1,788 1,111 1,424 28.1 29.4 17.2 19.5 6.8 9.0 25.9 30.6 Take-Two 13,144 2,045 2,201 105 533 77 425 68.7 33.2 14.1 21.9 6.1 7.9 8.3 26.2 Zynga 3,355 974 996 29 147 30 138 94.3 27.4 50.0 15.3 2.1 1.9 1.7 7.0 Ubisoft 9,975 1,840 2,216 222 378 136 279 40.9 35.7 7.1 9.4 4.0 5.9 10.0 14.4 Nintendo 66,691 5,194 10,339 312 1,595 1,089 1,298 30.3 43.9 57.2 32.9 2.5 4.3 8.5 10.3 Nexon 16,797 2,369 2,621 913 1,115 572 882 25.4 19.3 11.1 11.3 3.1 3.1 13.5 17.8 Square Enix 5,368 2,698 2,574 332 398 213 263 19.2 20.1 7.0 8.9 2.1 2.7 11.4 13.9 DeNA 2,927 1,527 1,419 246 273 327 206 10.6 14.0 7.3 5.6 1.4 1.1 14.7 8.3 Gungho Online 3,484 931 825 347 292 226 184 9.8 14.7 4.6 10.2 3.7 3.7 45.1 26.0 GREE 1,613 684 841 84 122 127 80 19.0 19.5 14.7 5.8 2.1 1.3 11.4 7.2 Tencent 581,067 40,254 56,282 14,143 17,358 10,931 14,336 52.2 39.9 37.3 28.7 14.5 10.7 30.9 30.1 NetEase 42,954 9,060 11,922 2,035 2,263 1,793 2,310 27.7 19.4 19.8 14.9 6.4 4.4 25.5 24.5 Kingsoft 4,844 887 1,233 147 241 201 283 18.7 17.7 18.7 12.8 2.7 2.4 13.5 13.2 Youzu Interactive 3,080 579 753 126 177 131 180 21.8 16.1 19.6 14.4 5.3 4.1 24.7 26.9 Changyou 1,527 656 592 102 130 123 138 11.2 10.5 2.0 3.6 1.5 1.2 9.0 11.1 Average 30.1 23.4 19.4 13.6 4.3 4.0 16.5 18.8 Notes: Data for domestic companies are based on Mirae estimates; data for overseas companies are based on consensus Source: Bloomberg, Mirae Asset Daewoo Research estimates

Mirae Asset Daewoo Research 3 February 21, 2018 Pearl Abyss

Risk factors

Key risk factors are new title-related volatility and rival games

New title performance: The biggest source of momentum for game stocks is expectations on new titles. However, it is difficult to predict how well a new game will do. That said, a number of pre-launch events, such as preregistrations, closed beta tests (CBT), and open beta tests (OBT), have lately been utilized for marketing purposes to raise the likelihood of success. If Pearl Abyss’s new title flops, it could fail to recover its investments (marketing and development expenses). And even if its new title proves successful, the stock could come under profit-taking pressures as investors confirm the title’s performance, as bullish expectations have already been priced in.

Competition: The mobile game industry currently faces intense competition. In the domestic market, the number of new mobile titles by major game companies is set to double YoY, with many of them geared towards large-scale MMORPGs. Gamevil and Nexon have already launched new MMORPGs in January, while upcoming mobile releases by Netmarble Games and NCsoft are also large-scale MMORPGs. Furthermore, several foreign mobile games from China, the US, and Japan are beginning to enter the top ranks on domestic charts. Marketing spending is also increasing as companies promote their games on both the online and offline (TV, billboards, etc.) channels.

Rising expenses: Compared to online game revenue, mobile game revenue tends to lead to a structural increase in variable expenses, such as commission fees to app stores and marketing expenses. The growing scale of mobile titles and content updates aimed at extending longevity are also driving up hiring and labor expenses, which could rise even further due to new title developments. That said, the increase in expenses could be offset by the success of a new title, a long lifecycle, and overseas revenue.

Stock supply/demand: Pearl Abyss was listed on the KOSDAQ on September 14th, 2017. On March 14th, 28.5% of the company’s shares will become available for sale due to the expiry of a six-month lockup. On March 31st, 6.1% of the company’s shares will become available for employee stock options (total shares available for stock options are 9.8%; the rest will be exercisable in June 2018 and March 2019). Some of these shares could be unloaded, putting upside pressures on supply. That said, this could be partly absorbed by the company’s current share repurchase program (W20bn for a six-month period starting February 13th).

Mirae Asset Daewoo Research 4

Mirae Asset Daewoo Research Key Universe Valuations February 21, 2018

※All data as of close February 19, 2018, unless otherwise noted.

18F Earnings growth Mkt Cap Price P/E (x) P/B (x) ROE (%) Ticker Company Div Yield OP EPS (Wbn) (W) (%) 18F 19F 18F 19F 18F 19F 18F 19F 18F 19F 068270 Celltrion, Inc. 37,291 304,000 - - - - 0.0 0.0 005380 Hyundai Motor 33,812 153,500 2.6 7.4 21.1 10.6 20.2 9.8 8.2 0.6 0.6 6.3 7.1 005490 POSCO 31,780 364,500 2.8 18.0 2.5 26.0 2.7 9.0 8.8 0.7 0.6 7.7 7.4 207940 28,120 425,000 1031.1 242.1 - 386.7 652.4 134.0 7.0 6.7 1.1 5.1 105560 KB Financial Group 27,888 66,700 18.2 5.0 3.8 5.0 8.0 7.6 0.8 0.7 9.9 9.6 035420 NAVER 26,601 807,000 0.2 21.4 22.1 28.9 21.7 26.7 21.9 3.9 3.3 19.0 19.3 051910 LG Chem 26,578 376,500 1.6 1.4 20.9 17.0 21.2 13.0 10.7 1.6 1.4 13.2 14.3 032830 Samsung Life 24,000 120,000 - - - - 0.0 0.0 055550 22,856 48,200 16.8 4.6 11.5 4.6 7.0 6.7 0.6 0.6 9.5 9.2 012330 21,708 223,000 1.6 5.2 10.9 44.4 9.0 9.5 8.7 0.7 0.6 7.5 7.6 015760 KEPCO 21,698 33,800 3.0 23.4 42.9 120.3 57.4 7.2 4.6 0.3 0.3 4.2 6.3 034730 SK Holdings 20,545 292,000 1.3 9.6 -0.7 12.3 7.2 9.2 8.6 1.2 1.1 14.5 13.6 017670 SK Telecom 19,783 245,000 4.1 0.1 1.7 13.8 -7.2 6.5 7.0 0.9 0.8 15.9 13.2 018260 Samsung SDS 18,145 234,500 1.1 18.2 12.1 19.5 11.0 28.6 25.8 2.9 2.7 10.8 11.0 096770 SK Innovation 17,985 194,500 4.1 1.5 0.7 9.6 0.6 7.7 7.6 0.9 0.8 12.3 11.4 091990 Celltrion Healthcare 17,259 125,500 64.5 44.1 29.6 56.9 53.2 33.9 14.4 10.1 31.2 34.9 066570 LG Electronics 17,019 104,000 0.7 40.7 20.9 29.7 22.2 8.4 6.9 1.2 1.0 15.2 16.0 051900 LG Household & Health Care 16,977 1,087,000 1.0 7.5 9.9 10.2 10.3 28.8 26.1 5.3 4.6 20.4 19.3 090430 AmorePacific 16,105 275,500 0.7 19.9 18.0 29.1 16.1 37.4 32.2 4.2 3.8 11.7 12.3 011170 Lotte Chemical 15,527 453,000 1.3 6.0 6.9 8.7 7.5 6.1 5.7 1.1 0.9 19.5 17.7 086790 Hana Financial Group 14,859 50,200 18.3 7.6 12.6 7.9 6.5 6.0 0.6 0.5 9.2 9.1 003550 LG Corp. 14,512 84,100 1.5 3.3 0.0 -7.6 0.0 8.7 8.7 0.9 0.8 10.6 9.7 033780 KT&G 13,716 99,900 4.8 -5.5 0.5 -8.7 -0.7 12.9 13.0 1.6 1.5 13.2 12.3 010950 S-Oil 13,454 119,500 5.6 15.6 30.2 4.6 30.2 11.0 8.4 1.9 1.7 18.0 21.2 000270 Motors 13,296 32,800 3.0 150.6 21.8 110.1 17.0 6.5 5.6 0.5 0.4 7.3 8.0 000810 Samsung F&M 13,289 280,500 - - - - 0.0 0.0 006400 Samsung SDI 12,343 179,500 0.6 319.7 40.6 39.3 14.8 13.4 11.6 1.0 0.9 8.1 8.7 251270 Netmarble Games Corporation 12,244 144,000 0.3 0.8 3.1 0.9 3.4 39.0 37.7 2.8 2.6 7.3 7.1 034220 LG Display 10,913 30,500 1.6 -57.6 100.6 -58.4 104.2 14.5 7.1 0.7 0.7 5.1 9.7 002790 AmoreG 10,307 125,000 0.4 24.5 12.2 30.3 7.7 42.0 39.0 3.3 3.1 8.5 8.5 010130 Korea Zinc 9,812 520,000 1.6 7.9 2.9 20.3 2.8 12.8 12.5 1.5 1.3 12.1 11.3 035720 Corp. 9,379 123,000 0.2 10.4 24.7 2.5 25.0 73.4 58.8 1.6 1.6 2.5 2.7 024110 9,352 16,700 12.2 8.8 10.1 9.4 6.6 6.0 0.5 0.5 8.2 8.3 036570 NCSOFT 8,600 392,000 2.6 70.7 3.7 65.4 3.8 11.8 11.4 2.6 2.2 25.5 22.2 139480 Emart 8,223 295,000 0.5 27.0 9.3 -20.8 12.1 16.9 15.0 1.0 0.9 5.8 6.2 030200 KT 7,324 28,050 2.9 11.1 1.7 21.0 12.8 9.1 8.1 0.5 0.5 6.6 7.0 009540 7,310 129,000 467.0 402.1 - - - 38.7 1.0 1.2 - 3.1 009150 Samsung Electro-Mechanics 7,163 95,900 0.8 80.5 12.1 87.3 15.5 24.6 21.3 1.5 1.5 6.7 7.3 004020 7,006 52,500 1.4 9.4 5.8 9.2 6.9 7.1 6.6 0.4 0.4 5.8 5.9 161390 6,689 54,000 0.9 38.5 13.1 33.2 13.6 8.0 7.1 0.9 0.8 12.1 12.1 021240 Coway 6,449 86,200 3.8 11.6 7.3 12.5 6.3 17.7 16.7 5.1 4.6 34.1 33.1 018880 Hanon Systems 6,379 11,950 - - - - 0.0 0.0 078930 GS Holdings 5,909 63,600 2.4 10.4 9.6 11.8 8.9 6.8 6.3 0.7 0.7 11.2 11.1 088350 Hanwha Life 5,750 6,620 - - - - 0.0 0.0 032640 LG Uplus 5,676 13,000 4.2 4.6 4.2 6.7 4.2 9.9 9.5 1.0 0.9 10.6 10.3 128940 5,670 498,000 -1.4 100.0 14.7 113.1 102.8 48.2 7.3 6.4 7.5 14.3 009830 Hanwha Chemical 5,513 33,450 1.0 -0.9 4.2 -5.4 11.2 5.9 5.3 0.8 0.7 14.1 13.7 086280 4,913 131,000 2.3 1.1 5.3 -13.3 6.0 8.3 7.8 1.1 1.0 13.8 13.1 005830 DB Insurance 4,765 67,300 - - - - 0.0 0.0 047810 Korea Aerospace Industries 4,762 48,850 1.4 - 48.4 - 81.1 88.4 48.8 4.2 4.1 4.7 8.5 Source: Mirae Asset Daewoo Research

Mirae Asset Daewoo Research Market Data February 21, 2018

※All data as of close February 20, 2018, unless otherwise noted.

Other Major Indices Economic Indicators Close Net Chg 1D (%) YTD (%) Close 1D ago 1M ago 1Y ago MSCI Korea* 548.24 8.66 1.60 -1.07 USD/KRW 1,068.00 1,079.90 1,069.40 1,145.30 KOSPI 2,415.12 -27.70 -1.13 -2.60 JPY100/KRW 1,001.74 1,016.62 963.38 1,014.03 KOSDAQ 864.41 -11.40 -1.30 6.40 EUR/KRW 1,325.01 1,341.18 1,309.27 1,216.25 Dow Jones* 3Y Treasury 2.32 2.30 2.17 1.67 S&P 500* 2,582.14 -150.08 -5.49 -4.22 3Y Corporate 2.85 2.84 2.70 2.14 NASDAQ* 6,790.71 -448.76 -6.20 -3.09 DDR2 1Gb* 1.34 1.34 1.33 1.25 Philadelphia Semicon* 1,322.81 4.49 0.34 2.73 NAND 16Gb* 2.89 2.89 2.86 2.01 FTSE 100* 7,247.66 -47.04 -0.64 -5.24 Oil (Dubai)* 61.77 61.67 65.95 54.06 Nikkei 225 21,925.10 -224.11 -1.01 -6.73 Gold* 1,353.20 1,333.10 1,237.60 Hang Seng* Customer deposits (Wbn)* 27,486 26,637 28,703 21,002 Taiwan (Weighted) Equity type BC (Wbn)(Feb. 14) 79,532 71,670 Note: * as of February 19, 2018 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 (P) 45.39 Celltrion 30.86 Korea Zinc 9.06 Samsung Electronics 63.72 Hynix 37.20 Samsung Electronics 23.58 Hanmi Pharm 8.59 Samsung Electronics (P) 42.20 LG Electronics 19.53 NHN 7.75 Hyundai Eng. & Cosnt. 8.19 Hynix 41.68 Honam Petrochemical 10.67 SEMCO 7.58 LG Electronics 7.89 KODEX LEVERAGE 26.20 LG Display 8.51 KODEX KOSDAQ150 LEVERAGE 6.11 KODEX INVERSE 5.96 NCsoft 16.65 KB Financial Group 6.68 Hyundai Heavy Industries 6.08 Hanwha Chemical 5.11 LG Chem 12.51 KEPCO 6.44 LG Chem 5.71 Green Cross Corp. 4.15 NHN 11.78 POSCO 4.84 Hyundai Eng. & Cosnt. 4.82 Korea Gas Corp. 3.65 Celltrion 10.25 SAMSUNG C&T 4.28 KT&G 4.80 STX Pan Ocean 3.35 LG Corp. 10.07 DongsungPharm 4.19 Hyundai Mobis 4.60 SK Telecom 3.27 SEMCO 8.50 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 Jenexine 5.38 Diostech 21.23 INNOX Advanced Materials 7.25 NATURECELL 12.89 Cafe24 Corp. 4.10 Sam Chun Dang Pharm 12.88 Jenexine 5.37 Celltrion Healthcare 10.99 FT EnE 3.10 ViroMed 9.36 PearlAbyss 4.98 SillaJen 5.77 Innocell 2.35 SKPI 6.43 Cafe24 Corp. 4.24 AHNLAB 4.74 INNOX Advanced Materials 1.86 Celltrion Healthcare 6.36 DUK SAN NEOLUX 2.50 Texcell-Netcom 4.50 Clean & Science 1.68 SillaJen 5.56 SundayToz 2.06 CJ E&M 3.25 ATEC T& 1.57 NATURECELL 5.41 PEPTRON 1.91 WONIK IPS 3.01 Nasmedia 1.39 Posco Chemtech 2.98 YG-1 1.70 SK Materials 2.75 KYUNG NAM PHARM 1.27 Seoul Semiconductor 2.96 BH,LTD. 1.54 Sam Chun Dang Pharm 2.57 Interflex 1.20 Texcell-Netcom 2.92 Gamevil 1.52 Celltrion 2.46 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 2,370,000 -49,000 304,276 Celltrion Healthcare 125,500 -4,400 17,259 Hynix 75,500 -1,000 54,964 SillaJen 91,000 -3,600 6,195 Celltrion 304,000 -12,500 37,291 Medy-tox 628,900 -15,100 3,557 Samsung Electronics (P) 2,020,000 -17,000 36,507 ViroMed 215,000 -4,500 3,431 Hyundai Motor 153,500 -1,500 33,812 CJ E&M 85,900 -2,000 3,327 POSCO 364,500 1,000 31,780 Celltrion 91,000 -3,500 3,036 SAMSUNG BIOLOGICS 425,000 -5,000 28,120 TissueGene(Reg.S) 49,100 500 2,975 KB Financial Group 66,700 -100 27,888 PearlAbyss 242,900 -12,100 2,931 NHN 807,000 -13,000 26,601 Posco Chemtech 46,350 -900 2,738 LG Chem 376,500 -7,000 26,578 LOEN 106,100 -2,500 2,683 Source: Korea Exchange