September 21, 2012

KOREA

Company News & Analysis Major Indices Close Chg Chg (%) Simmtech (Buy/TP: W20,000) Raise TP KOSPI 2,002.37 12.04 0.60 Mobile revenues growing at full speed KOSPI 200 263.41 1.54 0.59 KOSDAQ 531.49 3.43 0.65 (Buy/TP: W285,000) Lower TP Taking on new challenges Turnover ('000 shares, Wbn) Volume Value KOSPI 642,062 4,904 KOSPI 200 74,083 3,308 KOSDAQ 911,594 3,368

Market Cap (Wbn) Value KOSPI 1,153,158 KOSDAQ 116,068

KOSPI Turnover (Wbn) Buy Sell Net Foreign 1,208 1,040 168 Institutional 1,118 1,138 -20 Retail 2,557 2,700 -143

KOSDAQ Turnover (Wbn) Buy Sell Net Foreign 108 94 13 Institutional 139 98 41 Retail 3,122 3,171 -49

Program Buy / Sell (Wbn) Buy Sell Net KOSPI 1,058 787 271 KOSDAQ 19 19 0

Advances & Declines Advances Declines Unchanged KOSPI 463 356 79 KOSDAQ 479 465 58

KOSPI Top 5 Most Active Stocks by Value (Wbn) Price (W) Chg (W) Value Electronics 1,302,000 15,000 388 KODEX LEVERAGE 12,940 120 275 WillBes 3,520 -115 181 LG Display 28,500 -800 118 Hynix 23,850 -50 115

KOSDAQ Top 5 Most Active Stocks by Value (Wbn) Price (W) Chg (W) Value AHNLAB 99,800 -17,500 162 Solco Biomedical 2,260 -395 146 YG Entertainment 79,000 7,000 122 SaraminHR 27,200 2,400 110 S Connect 1,910 -75 89 Note: As of September 21, 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 September 21, 2012

Semiconductor Simmtech (036710 KQ) Daewoo Securities Co., Ltd. James Song Mobile revenues growing at full speed +822-768-3722 [email protected] What’s new: Earnings momentum to accelerate in 3Q

For 3Q, we project Simmtech to post revenues of W177.2bn (up 9.1% QoQ; up 23.3% YoY), an operating profit of W16.6bn (up 18.0% QoQ; up 52.5% YoY; OP

margin of 9.4%). In particular, we believe mobile device-related printed-circuit boards (PCB; e.g., multi-chip packaging (MCP)) have begun to show meaningful revenue growth. We estimate the proportion of mobile-related products (out of overall revenues) to increase to 25.7% in 3Q (vs. 16.8% in 3Q). Buy (Maintain) Target Price (12M, W) 20,000 Margins of mobile device-related PCBs and server modules are double those of PC- Share Price (09/20/12, W) 12,000 related PCBs. We expect the proportion of these high-margin products (out of Expected Return (%) 66.7 overall revenues) will further expand to 30% in 3Q and 34% in 4Q. For 4Q, we EPS Growth (12F, %) 12.1 forecast SimmtechÊs revenues and operating profit to reach W188.7bn (up 6.5% Market EPS Growth (12F, %) 12.2 QoQ; up 13.8% YoY) and W19.2bn (up 16.1% QoQ; up 24.1% YoY; OP margin of P/E (12F, x) 7.5 10.2%). Simmtech will likely generate earnings momentum in 2H. Market P/E (12F, x) 10.8 KOSDAQ 528.06 Catalyst: MCP and FC-CSP units to grow full-speed in 2013 Market Cap (Wbn) 372 Shares Outstanding (mn) 31 SimmtechÊs growth potential has been overshadowed by the companyÊs significant Avg Trading Volume (60D, '000) 321 PC-related PCB revenues. However, it should be noted that the companyÊs mobile- Avg Trading Value (60D, Wbn) 4 related MCP revenues have grown steadily. Furthermore, its MCP business is likely Dividend Yield (12F, %) 1.7 to achieve economies of scale starting in 2013 (MCP revenues are forecast to Free Float (%) 72.3 52-Week Low (W) 9,700 increase from W25.1bn in 2009, to W49.1bn in 2010, to W73.3bn in 2011, to 52-Week High (W) 15,600 W107.3bn in 2012, and to W168bn in 2013). Beta (12M, Daily Rate of Return) 1.23 Simmtech is slated to enter the flip-chip chip-scale-package (FC-CSP) business in 2H. Price Return Volatility (12M Daily, %, SD) 3.2 Foreign Ownership (%) 9.0 FC-CSPs can be used to produce a variety of mobile-related PCB products. Major Shareholder(s) Simmtech plans to produce: 1) RF chip-related products (starting in 2H12); 2) S.H. Jeon (25.93%) baseband-related products (1H13); and 3) mobile-device application processor (AP) M.J. Lee (9.5%) FC-CSP products (2H13). FC-CSPs are 2~4 times the price of MCPs. National Pension Service (8.61%) Price Performance Valuation: Raise TP to W20,000; Mobile-driven growth should lead to a re-rating (%) 1M 6M 12M Absolute 9.1 -18.9 -4.8 For 2012, we expect Simmtech to post revenues of W686.5bn (up 12.1% YoY) and Relative 6.8 -16.4 -13.1 an operating profit of W62.6bn (up 2.5% YoY; OP margin of 9.1%). The companyÊs Key Business annual earnings are likely to recover in 2013 on the back of robust mobile-related Simmtech manufactures and sells memory revenues. We project the companyÊs 2013 revenues and operating profit to reach module PCBs and semiconductor W781.8bn (up 13.9% YoY) and W80bn (up 27.7% YoY; OP margin of 10.2%). packaging substrates. We maintain our Buy call on Simmtech and raise our target price by 11% to W20,000 (from W18,000; based on a 2013F P/E of 10x). We upwardly revised our 2013 net profit estimate by 7.3%. We estimate the companyÊs EPS to grow 26%

Share price FY Revenues OP OP Margin NP EPS EBITDA FCF ROE P/E P/B EV/EBITDA 140 KOSDAQ (Wbn) (Wbn) (%) (Wbn) (Won) (Wbn) (Wbn) (%) (X) (X) (X) 130 120 12/10 577 85 14.7 71 2,590 111 124 93.2 5.5 3.0 5.2 110 12/11 612 61 10.0 42 1,435 94 56 27.0 8.5 2.1 5.5 100 12/12F 687 63 9.1 49 1,608 97 56 24.7 7.5 1.7 5.0 90 80 12/13F 782 80 10.2 62 2,025 115 69 24.5 5.9 1.3 3.7 70 12/14F 912 94 10.3 75 2,426 128 73 23.7 5.0 1.1 2.8 9/11 1/12 5/12 9/12 Notes: All figures are based on non-consolidated K-IFRS; NP refers to net profit attributable to controlling interests Sources: 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 September 21, 2012

next year. And its 2013 ROE is estimated at 24.5%. We believe the companyÊs shares are deeply undervalued, trading at a 2012F P/E of only 7.5x, and a 2013F P/E of just 5.9x.

2 Company September 21, 2012

Retail Shinsegae (004170 KS) Daewoo Securities Co., Ltd. Mina Kim Taking on new challenges +822-768-4163 [email protected] Lower TP to W285,000; Maintain Buy call Jieun Lee +822-768-3265 We maintain our Buy call on Shinsegae, but trim our target price by 1.7% to [email protected] W285,000. We are lowering our target price because: 1) we changed the base year

for valuation to 2013 (from 2012); and 2) we cut our 2012 and 2013 EPS estimates by 5.2% and 10.1%, respectively. Our downward revisions to earnings estimates stem from expectations that earnings in ShinsegaeÊs department store unit will be weaker than expected amid an economic slump. Buy (Maintain) Target Price (12M, W) 285,000 Using a sum-of-the-parts methodology, we derived our target price by summing the Share Price (09/20/12, W) 220,000 value of ShinsegaeÊs operations and the value of its equity holdings. The value of the Expected Return (%) 29.5 companyÊs operations (W220,000/sh) was derived by applying a P/E of 10x to our EPS Growth (12F, %) -88.5 2013F EPS. The value of the companyÊs equity holdings (W65,000/sh) was derived Market EPS Growth (12F, %) 12.2 by adding the value of its Samsung Life shares (based on a 50% discount to their P/E (12F, x) 10.5 September 20th closing price of W94,000) to the value of its Shinsegae International Market P/E (12F, x) 10.8 shares (based on their September 20th closing price of W87,000; no discount). KOSPI 1,990.33 Market Cap (Wbn) 2,166 Near term: Department store unit to see recovery in revenue growth Shares Outstanding (mn) 10 Avg Trading Volume (60D, '000) 30 For 3Q, we project Shinsegae to post gross merchandise sales (GMS) of W1.05tr Avg Trading Value (60D, Wbn) 6 (up 8% YoY), net sales of W561.7bn (up 6.4% YoY), and an operating profit of Dividend Yield (12F, %) 0.3 W34.4bn (down 3.3% YoY), vs. market consensus estimates of W1.17tr (up 20.7% Free Float (%) 72.8 52-Week Low (W) 182,500 YoY) for GMS, W571bn (up 8.1% YoY) for net sales, and W37.7bn (up 5.9% YoY) 52-Week High (W) 311,500 for operating profit. The department store unitÊs same-store sales grew 0.7% YoY in Beta (12M, Daily Rate of Return) 0.87 July but slid 5% YoY in August. As of September 20th, we estimate September Price Return Volatility (12M Daily, %, SD) 2.3 same-store sales have only remained flat YoY. However, considering same-store Foreign Ownership (%) 53.4 sales were robust in early September last year (Chuseok fell on September 12th in Major Shareholder(s) 2011), we believe September YoY same-store sales will improve. M.H. Lee et al. (27.13%) Aberdeen Asset Management Asia Limited We expect the department store unitÊs revenue growth to recover in the near term et al. (10.24%) in light of: 1) a low base effect; 2) government measures to inject liquidity into the Oppenheimer Funds, Inc.(OFI) et al. (7.6%) real estate market; and 3) the recently bullish stock market. Price Performance (%) 1M 6M 12M Long term: Growth hinges on the company’s strategies Absolute -2.0 -12.2 -29.0 Relative -4.3 -9.6 -37.3 From a long-term perspective, we do not believe the department store industry will Key Business show robust growth, considering: 1) even if the economy picks up, consumers are Shinsegae operates department stores, an online shopping mall, outlets, shopping likely to continue their preference for reasonably-priced products (consumersÊ malls and specialty stores in Korea. trading-up tendencies are likely to diminish); 2) we project economic growth to be only modest; and 3) aggressive store expansion should be unlikely because of the emergence of new retail channels (e.g., outlets, shopping malls).

FY Revenues OP OP Margin NP EPS EBITDA FCF ROE P/E P/B EV/EBITDA Share price (Wbn) (Wbn) (%) (Wbn) (Won) (Wbn) (Wbn) (%) (X) (X) (X) 120 KOSPI 12/10 1,868 239 12.8 1,088 28,829 351 357 18.6 14.0 2.1 42.5 100 12/11 2,186 268 12.2 3,502 182,729 383 -774 75.7 1.3 1.3 8.7

80 12/12F 2,203 276 12.5 206 20,939 382 -74 9.9 10.5 1.0 5.4 12/13F 2,290 269 11.7 211 21,443 411 -46 9.2 10.3 0.9 5.1 60 12/14F 2,361 272 11.5 215 21,870 438 -22 8.6 10.1 0.8 4.8 40 Notes: All figures are based on consolidated K-IFRS; NP refers to net profit attributable to controlling interests 9/11 1/12 5/12 9/12 Sources: 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 September 21, 2012

In our view, department stores need to diversify their business areas. Indeed, Shinsegae has expanded into the online mall business, the shopping mall business, and the category killer area. ShinsegaeÊs online mall business is focusing on expanding its customer base in partnership with the Emart Mall. And the company is running an outlet with Simon Property Group to benefit from the economic slump. Shinsegae also plans to enter the shopping mall business, which tends to attract good customer traffic.

2

Market Data September 21, 2012

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

Other Major Indices Economic Indicators Close Net Chg 1D (%) YTD (%) Close 1D ago 1M ago 1Y ago MSCI Korea* 403.84 -7.33 -1.78 12.74 USD/KRW 1,118.20 1,117.10 1,135.50 1,150.60 KOSPI 2,002.37 12.04 0.60 9.64 JPY100/KRW 1,428.46 1,425.05 1,430.10 1,504.64 KOSDAQ 531.49 3.43 0.65 4.87 EUR/KRW 1,450.75 1,457.76 1,402.80 1,574.19 Dow Jones* 13,596.93 18.97 0.14 11.29 3Y Treasury 2.84 2.82 2.90 3.50 S&P 500* 1,460.26 -0.79 -0.05 14.35 3Y Corporate 3.34 3.32 3.47 4.30 NASDAQ* 3,175.96 -6.66 -0.21 19.91 DDR2 1Gb* 1.18 1.19 1.21 1.15 Philadelphia Semicon* 394.63 -3.90 -0.98 7.06 NAND 16Gb* 1.77 1.76 1.82 2.92 FTSE 100* 5,854.64 -33.84 -0.57 2.71 Oil (Dubai)* 105.37 109.76 110.67 107.18 Nikkei 225 9,110.00 23.02 0.25 6.42 Gold* 1,767.80 1,769.30 1,620.10 1,806.90 Hang Seng* 20,590.92 -250.99 -1.20 9.08 Customer deposits (Wbn)* 18,956 18,938 18,373 19,457 Taiwan (Weighted) 7,754.59 27.04 0.35 11.54 Equity type BC (Wbn)(Sep. 19) 97,064 97,267 99,566 103,202 Note: * as of September 20, 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 35.76 Orion 21.01 Orion 24.94 LG Electronics 20.71 12.31 NCsoft 8.77 CJ Cheiljedang 21.39 Shipping 19.61 Samsung Corp. 12.05 GKL 8.72 KODEX LEVERAGE 20.85 LG Display 15.89 KB Financial Group 10.66 NHN 6.55 NHN 12.39 Hana Financial Group 13.10 Motors 10.51 CJ Cheiljedang 6.34 Lock&Lock 9.59 Woori Finance Group 12.71 KODEX 200 9.96 Samsung Electronics (P) 5.72 Hyundai Motor 8.23 Kia Motors 12.41 KODEX LEVERAGE 9.46 Amore Pacific 5.60 POSCO 7.88 KB Financial Group 11.09 Samsung SDI 8.84 LG Corp. 5.52 Himart 6.70 Samsung Corp. 9.13 LG Display 8.79 DHICO 5.37 Amore Pacific 6.52 HYUNDAI WIA 8.60 SK Energy 8.75 Nongshim 4.12 GKL 5.97 KODEX 200 8.28 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 CJ E&M 4.16 SM 5.66 SEEGENE 9.09 CJ E&M 5.25 AHNLAB 2.47 Paradise 3.10 Com2us 4.43 YG Entertainment 4.08 Gamevil 2.41 Megastudy 1.65 Paradise 4.41 Semiconductor 2.13 TK Corp. 2.35 YG Entertainment 1.05 SM 3.87 Maeil Dairy Industry 1.77 Interflex 1.69 SK Coms 0.97 Sung Kwang Bend 3.29 HANSUNG ELCOMTEC 1.71 BITComputer 1.51 Digital Optics 0.69 S-MAC 3.05 Interflex 1.66 SBS Contents Hub 1.40 GemVax 0.62 Genic 2.10 NEPES 1.55 Maeil Dairy Industry 1.20 SGA 0.62 Megastudy 2.05 STC 1.11 Kolon Life Science 1.17 Kornic Systems 0.59 Pyeong Hwa Automotive 2.02 Simmtech 0.95 Com2us 1.12 OSSTEM IMPLANT 0.55 Melfas 1.99 BHI 0.92 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 1,302,000 15,000 191,784 29,100 450 5,082 Hyundai Motor 241,000 -1,000 53,087 Paradise 18,000 150 1,637 POSCO 381,000 3,500 33,218 Daum Communications 109,400 900 1,477 318,500 500 31,004 CJ O Shopping 227,600 3,600 1,412 Kia Motors 73,200 200 29,673 Seoul Semiconductor 22,700 -250 1,324 LG Chem 329,500 2,500 21,836 SM 60,100 -700 1,228 258,500 1,500 19,646 CJ E&M 31,100 400 1,180 97,700 1,200 19,540 SK Broadband 3,920 20 1,160 38,800 -550 18,399 POSCO ICT 7,670 300 1,051 Samsung Electronics (P) 757,000 9,000 17,285 GemVax 42,250 1,100 1,042 Source: