Kiwoom Securities

April 17, 2012

KOREA

Morning

Company News & Analysis Major Indices Close Chg Chg (%) Kia Motors (Buy/TP: W103,000) Raise TP KOSPI 1,992.63 -16.28 -0.81 Strong sales and earnings momentum to continue into 2Q KOSPI 200 264.49 -2.37 -0.89 KOSDAQ 501.09 1.63 0.33 Samsung Heavy Industries (Buy/TP: W44,000) Keep an eye on offshore structure business Turnover ('000 shares, Wbn) Volume Value Industrial Bank of Korea (Buy/TP: W18,500) KOSPI 447,291 3,847 Likely to regain investor confidence KOSPI 200 56,459 2,864 KOSDAQ 491,081 1,666

Korea Life Insurance (Buy/TP: W9,100) Market Cap (Wbn) Opportunities expected to re-emerge Value KOSPI 1,145,623 Kiwoom Securities (Buy/TP: W86,000) KOSDAQ 108,018 Relatively solid share performance on book value growth KOSPI Turnover (Wbn) Buy Sell Net Economy & Strategy Update Foreign 847 1,015 -168 Institutional 692 727 -35 Fixed Income Weekly Retail 2,215 1,835 380 Long-term yields have yet to bottom KOSDAQ Turnover (Wbn) Buy Sell Net Foreign 47 64 -17 Institutional 40 45 -5 Retail 1,592 1,569 23

Program Buy / Sell (Wbn) Buy Sell Net KOSPI 441 822 -381 KOSDAQ 7 9 -3

Advances & Declines Advances Declines Unchanged KOSPI 334 470 89 KOSDAQ 517 398 90

KOSPI Top 5 Most Active Stocks by Value (Wbn) Price (W) Chg (W) Value Samsung Electronics 1,259,000 -9,000 380 KODEX LEVERAGE 13,520 -250 216 Hyundai Motor 263,000 5,000 179 Hyundai Mobis 290,000 -6,000 137 Hynix 29,250 250 121

KOSDAQ Top 5 Most Active Stocks by Value (Wbn) Price (W) Chg (W) Value EG 70,500 2,500 157 Agabang 15,200 150 80 Barunson 6,130 240 69 AHNLAB 128,200 16,700 63 Ewha Technologies 1,025 119 34 Information Note: As of April 16, 2012 This document is a summary of a report prepared by Daewoo Securities Co., Ltd. („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. 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. 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.

Company April 17, 2012

Auto Kia Motors (000270 KS) Daewoo Securities Co., Ltd. Michael Yun Strong sales and earnings momentum to continue into 2Q +822-768-4169 [email protected] Raise TP to W103,000; Maintain Buy rating Young-ho Park +822-768-3033 We maintain our Buy rating on Kia Motors and raise our 12-month target price by 7.3% [email protected] to W103,000 (from W96,000). We adjusted our target price because we 1) raised our

2012 operating profit and net profit estimates by 0.6% and 2.2%, respectively, to reflect greater-than-expected sales mix improvement and 2) believe that KiaÊs consolidated net debt will decline sharply (turning to net cash in 2013). Our target price was derived by applying a target EV/EBITDA multiple of 6.2x to our Buy (Maintain) 2012 global EBITDA estimate for the company. We believe that Kia will continue to Target Price (12M, W) 103,000 narrow its gap with Hyundai Motor (HMC), as KiaÊs 2012 growth should outshine that of Share Price (04/16/12, W) 79,100 Expected Return (%) 30.2 HMC. EPS Growth (12F, %) 29.3 1Q Preview: Consolidated OP of W1tr and NP of W1.1tr Market EPS Growth (12F, %) 19.2 P/E (12F, x) 7.2 KiaÊs 1Q global production and global retail sales have exceeded our forecasts, reaching Market P/E (12F, x) 9.8 691,264 units (up 11.7% YoY) and 629,732 units (up 11.4% YoY), respectively. Also, we KOSPI 1,992.63 believe that the companyÊs ASP increased by 2.8% in 1Q. We forecast KiaÊs 1Q Market Cap (Wbn) 32,064 revenues to come in at W11.8tr, up 11.0% YoY. Shares Outstanding (mn) 405 Avg Trading Volume (60D, '000) 2,182 We forecast operating profit to come in at W1tr (up 20.2% YoY; OP margin of 8.5%), Avg Trading Value (60D, Wbn) 155 thanks to solid sales in all major regions (which led to a high utilization ratio). Dividend Yield (12F, %) 0.9 Furthermore, despite a fall in domestic sales, we believe that KiaÊs export Free Float (%) 64.3 profitability has improved to offset this sluggishness. Meanwhile, we project KiaÊs 52-Week Low (W) 58,100 52-Week High (W) 84,600 1Q net profit to come in at W1.1tr (up 16.0% YoY). A one-time gain of W60bn on Beta (12M, Daily Rate of Return) 1.0 the disposal of Hyundai Wia shares should be recognized in the quarter. Price Return Volatility (12M Daily, %, SD) 2.3 Foreign Ownership (%) 31.0 2012 NP to increase by 31.8% to W4.5tr Major Shareholder(s) We believe that KiaÊs strong sales and earnings momentum will continue into 2Q with Hyundai Motor et al. (35.62%) the launch of the K9 in the domestic market and the new CeeÊd in Europe. Thus, we are NPS (6.95%) forecasting KiaÊs 2Q operating profit and net profit to come in at W1.24tr and W1.21tr, Price Performance respectively, with global retail sales jumping to 736,000 units. Also, as mentioned above, (%) 1M 6M 12M the new K9 should boost momentum in the weakening domestic market and also help Absolute 9.9 12.5 4.6 improve domestic ASP. Relative 11.9 4.0 11.5 Accordingly, we forecast KiaÊs 2012 net profit to increase by 31.8% to W4.5tr. Key Business KoreaÊs second-largest auto manufacturer. The companyÊs global competitiveness has leveled up following the global economic crisis.

Share price FY Revenues OP OP Margin NP EPS EBITDA FCF ROE P/E P/B EV/EBITDA 120 KOSPI (Wbn) (Wbn) (%) (Wbn) (Won) (Wbn) (Wbn) (%) (X) (X) (X)

100 12/10 42,290 2,836 6.7 2,641 6,724 3,902 3,735 32.6 7.5 2.5 6.3 12/11 43,191 3,525 8.2 3,416 8,556 4,490 2,266 29.7 7.8 2.2 6.4 80 12/12F 51,515 4,407 8.6 4,484 11,066 5,338 2,257 28.6 7.2 2.0 6.1 60 12/13F 55,310 4,881 8.8 4,996 12,330 5,809 2,728 24.8 6.4 1.5 5.3

40 12/14F 58,172 5,242 9.0 5,459 13,471 6,170 3,417 21.7 5.9 1.2 4.5 4/11 8/11 12/11 4/12 Notes: 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

This document is a summary of a report prepared by Daewoo Securities Co., Ltd. („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. 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. 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. Company April 17, 2012

Shipbuilding Samsung Heavy Industries (010140 KS) Daewoo Securities Co., Ltd. Ki-jong Sung Keep an eye on offshore structure business +822-768-3263 [email protected] Maintain Buy call with TP of W44,000 Ryan Kang +822-768-3065 We reiterate our Buy call on Samsung Heavy Industries (SHI) with a target price of [email protected] W44,000. Despite the depressed global economy and the European financial crisis,

the company is expected to win large-scale orders in 2012, just as it did in 2011. On the back of stable cash flow, we believe that SHIÊs 1Q earnings will be similar to market consensus estimates. Considering the companyÊs solid fundamentals and positive outlook for new orders, its shares look attractive. Buy (Maintain) Target Price (12M, W) 44,000 Investments in both onshore and offshore energy development are expanding, Share Price (04/16/12, W) 38,850 thanks to perpetually high oil prices. Indeed, global financing is moving into energy- Expected Return (%) 13.3 related industries. Furthermore, ship financing loans are highly likely to increase, as EPS Growth (12F, %) 7.9 some mid- to small-sized and several Asian banks are entering the market. Market EPS Growth (12F, %) 19.2 P/E (12F, x) 9.8 1Q Preview: Revenues and OP forecast at W3.4tr and W186.6bn Market P/E (12F, x) 9.8 KOSPI 1,992.63 For 1Q, we forecast SHI to post revenues of W3.4tr and an operating profit of Market Cap (Wbn) 8,970 W186.6bn, under consolidated K-IFRS. We expect OP margin to come in at 5.5%, Shares Outstanding (mn) 231 falling 5.7%p YoY and 0.4%p QoQ. Avg Trading Volume (60D, '000) 1,526 Avg Trading Value (60D, Wbn) 58 SHIÊs weak performance should be attributable to: 1) the increased recognition of Dividend Yield (12F, %) 0.0 low-priced orders taken during 2009~2010 and 2) the fact that recent raw material Free Float (%) 69.5 price drops are unlikely to have been reflected in 1Q. 52-Week Low (W) 23,000 52-Week High (W) 49,900 2Q Key: Potential orders from Nigeria’s Egina FPSO project Beta (12M, Daily Rate of Return) 1.7 Price Return Volatility (12M Daily, %, SD) 3.4 One of the most important factors for SHI in 2Q is the possibility of winning new Foreign Ownership (%) 30.3 orders from NigeriaÊs Egina floating production, storage, and offloading (FPSO) Major Shareholder(s) project. The project is being run by Total, one of the worldÊs largest energy Samsung Electronics et al. (24.41%) companies. Potential orders are estimated to be worth US$2bn, similar to the FPSO Treasury shares (6.13%) project which was obtained by Daewoo Shipbuilding & Marine Engineering last Korea Investment Management et al. (5.2%) month. If SHI is able to win orders from the Egina project, its fundamentals could Price Performance see improvement once again. (%) 1M 6M 12M Absolute -3.1 31.7 -13.0 One of the other bidders on the Egina FPSO project is Hyundai Heavy Industries, Relative -1.1 23.1 -6.1 which boasts global brand recognition and more relevant experience than SHI. Key Business Samsung Heavy Industries is diversifying However, considering SHIÊs performance over the past few years, we believe that its business areas to include shipbuilding, the company has a solid shot at winning the project. offshore structures, construction, and wind power generation. The company is a competitive player in the offshore market, and related sales account for more than 50% of its total sales.

Share price FY Revenues OP OP Margin NP EPS EBITDA FCF ROE P/E P/B EV/EBITDA 120 KOSPI (Wbn) (Wbn) (%) (Wbn) (Won) (Wbn) (Wbn) (%) (X) (X) (X)

100 12/10 13,090 1,049 8.0 888 3,846 1,403 518 26.7 10.7 2.6 8.8 12/11 13,392 1,160 8.7 851 3,685 1,455 1,859 20.1 7.6 1.4 5.4 80 12/12F 14,903 903 6.1 919 3,977 1,184 1,412 18.6 9.8 1.7 7.7 60 12/13F 16,024 1,220 7.6 1,174 5,084 1,480 973 20.8 7.6 1.5 5.6

40 12/14F 17,230 1,364 7.9 1,270 5,500 1,602 1,401 19.3 7.1 1.3 4.3 4/11 8/11 12/11 4/12 Notes: 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

Banks Industrial Bank of Korea (024110 KS) Daewoo Securities Co., Ltd. Taye Shim Likely to regain investor confidence +822-768-4178 [email protected] 1Q Preview: Decent 1Q results to beat consensus estimates Yong-uk Ku +822-768-4494 For 1Q, we expect Industrial Bank of Korea (IBK) to deliver a net profit of W441.0bn, [email protected] which is 6% higher than the consensus estimate of W416.7bn. Contrary to market concerns, we do not expect IBKÊs top line to be significantly hampered by its SME loan spread cut initiatives. We believe that loan officers at the branch level are likely to have stayed disciplined with regard to the bankÊs pricing policies. We forecast IBK to post flattish loan growth and thin margins, in line with sector trends. And we Buy (Maintain) expect interest earnings and overall operating profit to pick up 1% QoQ and 6% Target Price (12M, W) 18,500 Share Price (12/04/16,W) 13,000 QoQ, respectively. Meanwhile, we forecast the bankÊs cost-to-income ratio and Expected Return (%) 42.3 credit cost ratio to come in at normalized levels (33% and 0.76%, respectively). All EPS Growth (12F, %) 6.5 in all, we expect IBK to post decent results that will lead to improving sentiment on Market EPS Growth (12F, %) 12.4 the bankÊs stock. P/E(12F, x) 5.4 Market P/E(12F, x) 9.3 Investment themes for IBK KOSPI 1,992.63 Market Cap (Wbn) 7,098 In our view, the likelihood that the Ministry of Strategy and Finance will sell off its Shares Outstanding (mn) 546 stake in IBK is low. We still believe there is a large gap between the governmentÊs Avg Trading Volume (60D, '000) 1,789 Avg Trading Value (60D, Wbn) 24 desired price and the current price. Moreover, even if we factor in a potential stake Dividend Yield (12F, %) 3.8 sale by the government, we believe that the lingering discount to IBKÊs valuation is Free Float (%) 29.5 excessive; in fact, we think the current valuation level presents a good entry point 52-Week Low 11,200 for long-term investors. Furthermore, we like the bankÊs unique focus on the SME 52-Week High 20,550 lending market. Currently, IBKÊs market share in SME loans (among KDB Daewoo Beta (12M, Daily Rate of Return) 1.1 Price Return Volatility (12M Daily, %,SD) 2.7 Universe banks; won-denominated lending) stands at 30% as of end-2011. We Foreign Ownership (%) 13.3 believe that this market dominance, combined with regulatory easing and a macro Major Shareholder(s) recovery, should translate into stable revenue generation. Ministry of Strategy and Finance (68.6%) IBKÊs structural productivity should enable the bank to maintain disciplined cost control. Indeed, the bankÊs productivity far exceeds the peer average. As we believe Price Performance that a regulatory squeeze on top-line numbers is a common denominator among (%) 1M 6M 12M Absolute -10.0 -10.7 -30.1 banks, investors should switch their focus from top-line earnings to bottom-line cost Relative -8.0 -19.2 -23.2 management. Key Business Industrial Bank of Korea is a key SME Maintain Buy call with TP of W18,500 lender in Korea. The Ministry of Strategy and Finance holds 69% of its outstanding We maintain our Buy recommendation with a target price of W18,500. Our target shares. price was derived by applying a P/B multiple of 0.8x to our 2012 BPS estimate and implies upside potential of 42%. We believe that current valuations present an attractive opportunity for long-term investors.

Share price FY Total OP PPOP Net OP Pretax NP NP EPS BPS P/E P/B ROE ROA 120 KOSPI 110 (Wbn) (Wbn) (Wbn) (Wbn) (Wbn) (W) (W) (x) (x) (%) (%) 100 12/10 4,826 3,431 1,651 1,711 1,290 2,003 16,288 9.4 1.2 13.1 0.8 90 80 12/11 4,901 3,233 1,940 1,928 1,450 2,251 20,378 5.6 0.6 11.5 0.8 70 12/12F 4,913 3,195 2,040 2,038 1,544 2,397 22,295 5.4 0.6 11.2 0.8 60 50 12/13F 5,306 3,502 2,266 2,264 1,715 2,663 24,372 4.9 0.5 11.4 0.8 40 12/14F 5,805 3,911 2,555 2,554 1,934 3,004 25,967 4.3 0.5 11.9 0.9 4/11 6/11 8/11 10/11 12/11 2/12 4/12 Notes: 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

Insurance Korea Life Insurance (088350 KS) Daewoo Securities Co., Ltd. Opportunities expected to re-emerge Gil-won Jeong +822-768-3256 [email protected] 4QFY11 Preview: Net profit forecast at W161bn (up 1.43% QoQ) Hae-deun Kim For 4QFY11 (fiscal year ending in March), we expect Korea Life InsuranceÊs net +822-768-4180 profit to come in at W161bn (up 1.43% QoQ), in line with our projection (W161.2bn). [email protected] Accordingly, we forecast the companyÊs FY11 full-year net profit to reach W533.2bn, falling short of the companyÊs guidance (W600bn). This shortfall should be attributable to drops in investment yield (affected by a flare-up of the financial crisis).

In the quarter, we believe that: 1) Korea Life InsuranceÊs investment yield returned Buy (Maintain) to the 5.6% level after temporarily rising (on the add-back of credit-linked-note- Target Price (12M, W) 9,100 related losses in 3QFY11), 2) the companyÊs loss ratio remained stable at the 85% Share Price (11/07/01,W) 6,930 level, and 3) one-off factors were not incurred. Expected Return (%) 31.3 EPS Growth (11F, %) 11.1 Meanwhile, we forecast the companyÊs FY11 annualized premium equivalents (APE) Market EPS Growth (11F, %) 12.4 to expand 10% YoY, aided by still-robust sales of protection-type plans and the P/E(11F, x) 11.0 recovery of annuity and savings-type plans. Market P/E(11F, x) 9.3 KOSPI 1,992.63 Earnings volatility easing; Focus on new contract growth Market Cap (Wbn) 6,019 Shares Outstanding (mn) 869 We believe that Korea Life InsuranceÊs earnings volatility should diminish going Avg Trading Volume (60D, '000) 618 forward in light of the companyÊs tight control over its loss and expense ratios as Avg Trading Value (60D, Wbn) 6,019 well as the stabilization of investment yield (with the financial crisis easing). Dividend Yield (11F, %) 2.9 Free Float (%) 22.0 As such, for FY12, we are focusing more on the companyÊs new contract growth 52-Week Low 5,430 (than on earnings). We expect the companyÊs APEs to maintain solid growth in FY12, 52-Week High 7,900 considering that: 1) new annuity contracts should expand ahead of the planned Beta (12M, Daily Rate of Return) 0.6 revision to the Korean experience mortality table, and 2) the potential easing of Price Return Volatility (12M Daily, %,SD) 2.0 financial income taxation should boost demand for non-qualified annuities (sold by Foreign Ownership (%) 12.0 life insurers). Major Shareholder(s) Hanwha Group (50.27%) Maintain Buy call with TP of W9,100; Opportunities expected to re-emerge KDIC (24.75%) Lazard Asset Mgmt LLC et al. (7.24%) Currently, Korea Life Insurance shares are trading at a P/B of only 0.85x and a P/EV Price Performance of just 0.59x. Taking into account the companyÊs healthy new contract growth and (%) 1M 6M 12M stable income management, further downside risks appear limited. Absolute -10.0 18.5 -5.2 Relative -7.9 9.9 1.7 We advise investors to accumulate shares before interest rates normalize (rise). Key Business Once rates normalize (relieving the persistent negative margin), life insurance shares KoreaÊs second-largest life insurance should become attractive. We expect Korea Life to become the largest beneficiary company; engaging in protection-type, annuity, and savings-type products. of such a development. It should be noted that, two years ago, a number of Asian life insurers rushed to stage IPOs to benefit from similar interest rate momentum. We maintain our Buy call with a target price of W9,100.

Direct Gross Dividend StockholdersÊ FY Net profit EPS BPS P/E P/B ROE premiums operating profit yield equity Share price 110 KOSPI (Wbn) (Wbn) (Wbn) (W) (W) (x) (x) (%) (%) (Wbn) 100 03/10 10,515 -191 418 492 6,675 17.8 1.3 9.0 1.1 589,978 90 03/11 11,098 -65 481 566 7,239 13.4 1.0 8.1 3.0 637,239 80 70 03/12F 11,713 -79 535 629 7,749 11.0 0.9 8.4 2.9 685,943 60 03/13F 12,356 39 597 702 8,249 9.8 0.8 8.8 3.2 724,053 50 03/14F 13,061 86 624 734 8,711 9.4 0.8 8.7 3.5 763,044 40 4/11 8/11 12/11 4/12 Note: Post-FY11 figures are under non-consolidated K-IFRS Source: Company data, KDB Daewoo Securities Research estimates

Securities Kiwoom Securities (039490 KS) Daewoo Securities Co., Ltd. Gil-won Jeong Relatively solid share performance on book value growth +822-768-3256 [email protected] 4QFY11 Preview: Pretax profit to slide 37.8% QoQ to W34bn Hae-deun Kim For 4QFY11 (fiscal year ending in March), we project Kiwoom SecuritiesÊ pretax +822-768-4180 [email protected] profit to come in at W34bn (down 37.8% QoQ), falling short of our projection (W43.7bn). And we forecast KiwoomÊs FY11 full-year net profit to reach W122.9bn

(ROE of 16.5%), which would represent the companyÊs highest figure since the

margin loan restriction was implemented in FY07. In the quarter, we think that Kiwoom recognized one-off expenses (e.g., personnel Buy (Maintain) expenses), and that its brokerage commission income fell due to a decrease in the Target Price (12M, W) 86,000 proportion of retail investors. We also estimate that interest income inched down on Share Price (12/04/16,W) 70,500 Expected Return (%) 22.0 cuts to customersÊ commissions (although the firmÊs margin balance and average EPS Growth (11F, %) 17.1 customer deposit balance are estimated to have remained flat QoQ). However, we Market EPS Growth (11F, %) 12.4 believe that a high base effect was the most significant contributor to KiwoomÊs P/E(11F, x) 11.9 QoQ pretax profit plunge (the company was exempt from paying commissions to Market P/E(11F, x) 9.0 authorities in 3QFY11). KOSPI 1,964.83 Market Cap (Wbn) 1,558 Cost reductions and profit diversification expected for FY12 Shares Outstanding (mn) 22 Avg Trading Volume (60D, '000) 42 We anticipate commissions paid to authorities (e.g., the Korea Exchange) to be cut Avg Trading Value (60D, Wbn) 3 by over 20% (previously, commission exemptions were intermittently made). Given Dividend Yield (11F, %) 1.3 that such commissions account for over 20% of KiwoomÊs brokerage businessÊ Free Float (%) 52.2 costs, we estimate that this development could save the firm in excess of W12bn 52-Week Low 49,550 per year. It should be noted, however, that a controversy over whether or not 52-Week High 73,700 securities firms should pass the savings on to consumers (by cutting brokerage Beta (12M, Daily Rate of Return) 0.9 commissions) is likely to emerge. As such, it remains to be seen whether a cut in Price Return Volatility (12M Daily, %,SD) 2.6 Foreign Ownership (%) 30.5 commissions paid to authorities will directly lead to earnings growth. Still, securities Major Shareholder(s) firms should be able to implement more flexible commission policies. Hanwha Group (50.27%) Meanwhile, we expect Kiwoom to improve its capital efficiency following its KDIC (24.75%) Lazard Asset Mgmt LLC et al. (7.24%) acquisition of a mutual savings bank. Kiwoom is likely to fund the acquisition (worth Price Performance W70bn) with idle capital. And the savings bank has maintained a healthy ROE (five- (%) 1M 2M 3M year average of 15% despite the global crisis). Absolute -4.3 24.8 16.0 Relative -2.3 16.2 22.9 What makes Kiwoom different from its peers? Key Business Lately, KiwoomÊs shares have been solid relative to its peersÊ. Indeed, other A rapidly-growing online brokerage house. securities firms have seen their shares undergo significant corrections when they failed to improve their earnings (following the recoveries of their valuations) However, Kiwoom has built a differentiated profit structure. When the stock market underwent corrections, high volatility boosted brokerage income. And, when the market turned bullish, both interest income and brokerage income expanded.

Direct Gross Dividend StockholdersÊ 150 Kiwoom Securities KOSPI FY Net profit EPS BPS P/E P/B ROE premiums operating profit yield equity 130 (Wbn) (Wbn) (Wbn) (W) (W) (x) (x) (%) (%) (Wbn) 110 03/10 10,515 -191 418 492 6,675 17.8 1.3 9.0 1.1 589,978 90 03/11 11,098 -65 481 566 7,239 13.4 1.0 8.1 3.0 637,239 70 03/12F 11,713 -79 535 629 7,749 11.0 0.9 8.4 2.9 685,943

50 03/13F 12,356 39 597 702 8,249 9.8 0.8 8.8 3.2 724,053 11.4 11.8 11.12 12.4 03/14F 13,061 86 624 734 8,711 9.4 0.8 8.7 3.5 763,044 Note: Post-FY11 figures are under non-consolidated K-IFRS Source: Company data, KDB Daewoo Securities Research estimates This document is a summary of a report prepared by Daewoo Securities Co., Ltd. („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. 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. 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. Company April 17, 2012

Furthermore, non-operating risks have dissipated. The persistent rights offering risk facing Kiwoom has eased with the firmÊs savings bank acquisition. And uncertainties over regulatory risks (e.g., cuts to customersÊ commissions and margin loan interest rates) have been relieved.

KiwoomÊs shares have experienced significant volatility due to low trading volume and a number of other issues. However, the companyÊs share price has steadily risen in line with the companyÊs book value expansion. We maintain our Buy call with a target price of W86,000. Kiwoom remains our top pick for the securities segment.

2 Fixed Income April 16, 2012

Daewoo Securities Co., Ltd. Yeo-sam Yoon Fixed Income Weekly Sr. Fixed Income Strategist Long-term yields have yet to bottom +82-2-768-4124 [email protected]

Supportive measures may never be enough

Hardly two months after the latest LTRO, the eurozone may need another dose of

supportive steps. Although the LTRO has reduced the systemic risk for the regionÊs

banks, it wonÊt likely do much for its limping economy. With FranceÊs presidential

election only six days away, candidates remain immersed in populist campaigns as ever,

but blind to reform agendas, such as cutting fiscal spending and lowering taxes. This suggests the country will remain unwilling, and/or unable to tackle its economic problems after the election. Many believe the country will be at the center of the

eurozoneÊs next sovereign debt crisis unless it speeds up reforms.

Chinese and US economies are worsening

ChinaÊs 1Q12 GDP growth came in at 8.1%, vs. consensus estimates of 8.3~8.4%. The country may be tempted to artificially boost growth, but has little room for policy maneuvering given high inflationary pressures. Thus, Chinese policy planners have to think twice before launching fresh boosting measures. As we argued all along, China is hardly in a position to help the global economy. As for the U.S. economy, the Citigroup Economic Surprise Index has recently started to fall again. Unemployment claims last week increased to 380,000, and the latest US Michigan Consumer Sentiment Index edged down, obviously due to high oil prices.

Long-term yields are set to fall further

The 3-year KTB yield fell to 3.49% last week as concerns about the global economy resurfaced. But the street believes that a further fall in the yield will be limited because: 1) the Bank of Korea is increasingly unlikely to cut the base rate anytime soon, and 2) the spread with the base rate has narrowed to less than 25bp. Thus, we expect the KTB yield curve (with maturities of 3 years and longer) to flatten, as long-term bonds will be more responsive to changes in external conditions.

Market Data April 17, 2012

※All data as of close April 16, 2012, unless otherwise noted.

Other Major Indices Economic Indicators Close Net Chg 1D (%) YTD (%) Close 1D ago 1M ago 1Y ago MSCI Korea* 409.49 6.23 1.54 14.32 USD/KRW 1,134.10 1,142.30 1,129.10 1,089.40 KOSPI 1,992.63 -16.28 -0.81 9.10 JPY100/KRW 1,401.85 1,411.90 1,350.76 1,302.64 KOSDAQ 501.09 1.63 0.33 -1.12 EUR/KRW 1,482.55 1,505.78 1,476.86 1,578.10 Dow Jones* 12,849.59 -136.99 -1.05 5.17 3Y Treasury 3.47 3.49 3.59 3.72 S&P 500* 1,370.26 -17.31 -1.25 7.30 3Y Corporate 4.23 4.26 4.39 4.52 NASDAQ* 3,011.33 -44.22 -1.45 13.69 DDR2 1Gb* 1.30 1.30 1.35 1.35 Philadelphia Semicon* 416.43 -7.73 -1.82 12.98 NAND 16Gb* 2.15 2.14 2.34 3.83 FTSE 100* 5,651.79 -58.67 -1.03 -0.84 Oil (Dubai)* 118.43 117.31 123.63 114.09 Nikkei 225 9,470.64 -167.35 -1.74 10.64 Gold* 1,659.10 1,679.50 1,694.20 1,454.90 Hang Seng* 20,701.04 373.72 1.84 9.66 Customer deposits (Wbn)* 18,230 18,015 18,771 16,684 Taiwan (Weighted) 7,729.86 -58.41 -0.75 11.19 Equity type BC (Wbn)(Apr. 12) 97,198 97,196 99,267 99,731 Note: * as of April 13, 2012 Source: KSDA, FnGuide, 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 Hyundai Motor 23.25 Samsung Electronics 40.12 Hynix 29.19 Hyundai Mobis 42.38 SK Energy 10.83 LG Electronics 22.27 GS Holdings 14.33 KODEX LEVERAGE 30.66 GKL 9.71 Hana Financial Group 17.53 Kia Motors 11.91 Korean Air Lines 18.56 KT&G 6.71 Samsung Electronics (P) 11.75 SEMCO 7.13 Kumho Petrochemical 17.10 Woori Finance Group 5.59 GS Holdings 11.46 KODEX INVERSE 7.04 Korea Power Engineering Company, Inc. 10.02 POSCO 4.93 Samsung F&M Insurance 10.85 SK Energy 6.51 LG Electronics 9.85 Hyundai Mobis 4.78 Kangwon Land 10.38 Samsung Heavy Ind. 6.12 Samsung Corp. 9.24 Lotte Shopping 4.61 DSME 9.33 Samsung F&M Insurance 5.36 Honam Petrochemical 8.43 HYUNDAI WIA 4.19 S-Oil 9.18 Samsung Electronics 5.08 Shinhan Financial Group 7.67 Cheil Communications 3.92 OCI 8.46 Hana Financial Group 4.35 LG Uplus 6.89 Source: KSDA, FnGuide

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 Medipost 1.74 NEPES 5.15 Daum Communications 5.07 CJ O Shopping 11.11 Melfas 1.12 Insun ENT 2.52 SM 1.57 Seoul Semiconductor 1.81 Daum Communications 0.97 SEEGENE 1.13 ATTO 1.35 SEEGENE 1.75 Celltrion 0.80 ATTO 1.10 Paradise 0.84 GOLFZON 0.91 Partrion 0.78 DBSM 0.80 Simmtech 0.78 Eugene Technology 0.81 ICD 0.71 Sung Kwang Bend 0.70 Infraware 0.71 NEPES 0.77 Paradise 0.53 Posco Chemtech 0.68 CJ E&M 0.65 KINX 0.64 Soribada 0.42 Speco 0.61 Sung Kwang Bend 0.63 Soribada 0.62 YOUNG JIN INFRA 0.29 Humax 0.55 JCE 0.63 STC 0.55 Simmtech 0.28 BITComputer 0.53 K-MAC 0.61 Kornic Systems 0.52 Source: KSDA, FnGuide

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 1,259,000 -9,000 185,449 Celltrion 36,050 100 4,204 Hyundai Motor 263,000 5,000 57,932 Daum Communications 119,400 800 1,608 POSCO 381,000 -3,500 33,218 Seoul Semiconductor 22,700 -300 1,323 Kia Motors 79,100 500 32,064 AHNLAB 128,200 16,700 1,283 Hyundai Mobis 290,000 -6,000 28,229 CJ O Shopping 203,400 -35,800 1,261 LG Chem 362,000 -7,500 23,990 CJ E&M 28,050 200 1,063 Hyundai Heavy Industries 307,500 -2,500 23,370 POSCO ICT 7,660 -20 1,049 Hynix 29,250 250 20,300 SK Broadband 3,440 0 1,018 Shinhan Financial Group 42,200 -600 20,011 SFA Engineering 55,000 100 987 Samsung Life Insurance 93,500 -1,000 18,700 Dongsuh 32,650 -350 972 Source: Korea Exchange