November 5, 2020 One-Asia Morning Focus

Today’s reports SK Hynix (000660 KS/Buy/TP: W110,000) – Biggest beneficiary of 2021 DRAM upcycle Spigen Korea (192440 KQ/Buy/TP: W90,000) – Earnings surprise Global performance monitor: Two-day change (%) Asia xJPN World EM World DM Korea Japan China Taiwan HK India Indonesia Singapore Thailand Index 1.46 1.58 3.33 2.09 1.58 0.70 2.32 3.71 1.31 -0.32 3.64 1.84 Growth 1.32 0.55 2.52 3.13 2.13 -0.77 3.17 4.32 1.46 0.47 3.39 1.28 Value 2.77 2.08 3.72 0.96 0.96 2.80 1.22 2.91 1.17 -1.04 3.89 2.37 Semicon. & equip. 1.62 1.65 2.30 4.16 1.15 -0.90 3.28 -3.35 N/A N/A N/A N/A Tech hardware & equip. 3.15 3.16 2.14 1.82 2.35 2.60 1.48 1.52 -1.29 N/A 1.94 N/A Comm. & prof. services -0.50 -0.50 4.81 3.18 3.78 2.13 1.32 N/A 2.90 1.30 N/A N/A Software & services -0.36 -0.34 1.98 1.90 3.88 2.10 0.62 -0.76 1.20 N/A 3.94 N/A Media & entertainment 0.84 1.02 1.44 5.31 -0.41 1.85 1.94 -0.07 0.16 N/A N/A N/A Consumer goods 2.37 2.67 3.42 0.87 1.39 4.62 0.98 N/A 3.44 1.24 N/A 1.62 Consumer services 1.56 0.77 2.15 1.77 2.49 2.68 1.17 4.30 0.57 0.59 2.94 -0.39 F&B & tobacco 1.14 1.40 2.98 2.67 0.77 2.01 1.86 -0.97 0.31 0.47 1.31 1.49 Food & staples retailing 1.68 2.01 3.58 1.65 -0.02 1.10 -0.88 3.45 3.42 N/A 0.60 1.89 Retailing -3.31 -2.88 0.69 0.90 1.90 3.58 1.66 0.11 -0.58 3.81 1.44 -2.09 HH & personal products 0.25 0.40 3.07 -0.37 2.05 1.81 3.29 N/A -0.24 2.82 N/A N/A Pharma & life sciences 1.72 1.92 2.84 7.14 3.75 2.13 -1.00 1.17 3.25 -2.17 N/A N/A Autos & parts 6.53 6.49 5.77 -0.07 0.92 3.19 3.90 -3.32 1.62 0.51 N/A N/A Transportation 1.47 2.05 4.57 -1.08 0.84 3.85 1.44 0.44 1.17 N/A 1.49 2.35 Capital goods 2.60 2.24 5.19 1.41 1.78 2.05 0.67 4.05 2.80 N/A 3.58 0.53 Materials 3.08 4.12 4.34 1.59 1.97 4.09 1.41 N/A -0.72 -1.10 N/A 3.02 Real estate 2.11 1.25 3.69 -1.61 1.89 1.61 0.38 2.78 -1.63 N/A 2.73 -0.55 Energy -3.05 0.45 3.41 5.32 2.35 2.40 2.15 N/A 1.21 0.44 3.33 4.66 Banks 4.83 4.12 4.90 -1.41 0.80 3.67 0.48 5.40 2.44 -1.17 4.23 0.88 Diversified financials 2.89 3.39 4.10 0.90 2.23 2.69 2.42 2.16 2.62 N/A 3.62 -0.19 Telecom services 2.26 2.40 1.71 1.41 -0.86 2.21 -0.17 0.50 -1.42 1.19 5.63 0.63 Utilities 1.59 1.87 3.64 -0.74 -0.69 1.24 -0.39 1.29 -0.79 -0.43 N/A 2.65

Key thematic ETFs: Change (%) Market movers Mkt cap US dollar total returns (%) Robotics & AI (Global X) Name Ctry Sector (US$mn) 1D 1M 3M 6M 1Y 3Y Cloud Computing (Global X) Top seven performers Lithium & Battery (Global X) NCsoft KR Commun. services 16,152 6.7 6.8 3.8 44.9 59.8 96.4 Internet of Things (Global X) KR Commun. services 27,887 6.5 1.4 2.0 108.3 150.3 131.5 Digitalisation (iShares) CJ CheilJedang KR Consumer staples 5,312 6.3 0.7 -2.1 54.3 67.3 4.8 FinTech (Global X) United Microelectronics TW Information tech. 13,730 6.1 12.1 32.4 125.7 140.8 146.1 Genomics & Biotech (Global X) NAVER KR Commun. services 43,100 5.2 3.5 0.7 62.1 85.3 70.4 Health & Wellness (Global X) BioLogics KR Healthcare 42,631 4.5 9.2 4.7 42.4 86.3 81.4 Ageing Population (iShares) JG Summit Holdings PH Industrials 10,209 4.3 9.6 14.5 46.6 -6.1 0.3 EM Consum Growth (iShares) Bottom seven performers Clean Energy (iShares) KR Materials 6,070 -9.1 14.2 64.8 234.3 164.9 33.8 Water Resources (Invesco) Bank Mandiri ID Financials 18,263 -4.9 11.8 2.7 37.7 -16.3 -19.2 Agribusiness (iShares) Home Product Center TH Consumer disc. 5,786 -3.8 -4.1 -11.2 5.4 -21.4 26.8 Global Infrastructure (iShares) Lotte Chemical KR Materials 7,231 -3.7 25.6 48.6 32.3 14.4 -31.6 ESG US Leaders (iShares) KR Financials 8,392 -3.5 16.3 14.3 32.8 -0.8 -25.6 2D 10D Barito Pacific ID Materials 5,610 -3.2 5.6 -1.2 -34.5 -11.4 100.5 (6)(3)0369

Shinhan Financial KR Financials 14,622 -3.0 16.0 8.3 12.9 -22.7 -33.2

This publication contains summaries of reports prepared by Mirae Asset Daewoo Co., Ltd. and/or its non-US affiliates (“Mirae Asset Daewoo”). Please review the compliance notices contained in the original reports. 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.

November 5, 2020 One-Asia Morning Focus

MSCI valuations (DM, EM, Asia ex-JP)

17 12M forward P/E (x) 22 2.0 12M trailing P/B (x) 2.8 21 16 20 2.6 1.8 15 19 2.4 14 18 1.6 17 13 2.2 16 1.4 12 15 2.0 11 14 1.2 13 1.8 10 12 9 11 1.0 1.6 Nov-19 Feb-20 May-20 Aug-20 Nov-19 Feb-20 May-20 Aug-20 MSCI Asia ex-JP (L) MSCI World EM (L) MSCI World DM (R) MSCI Asia ex-JP (L) MSCI World EM (L) MSCI World DM (R)

MSCI 12M forward P/E (x) Currencies (vs. USD) Value Change(%) Korea Vietnam 1D 3M YTD

13 19 KRW 1,137.7 0.31 -4.73 -1.63 CNY 6.7 0.38 -3.87 -3.63 11 16 JPY 104.5 -0.08 -1.38 -3.86 IDR 14,565.0 -0.14 -0.44 4.92 9 13 HKD 7.8 0.06 0.07 -0.46 TWD 28.6 0.10 -2.63 -4.48 7 10 Nov-19 Feb-20 May-20 Aug-20 Nov-19 Feb-20 May-20 Aug-20 SGD 1.4 -0.11 -1.28 1.00 THB 31.1 0.29 0.15 3.95 Indonesia India 19 24 INR 74.7 0.45 -0.40 4.71 22 PHP 48.4 -0.02 -1.42 -4.43 17 20 MYR 4.2 0.29 -1.24 1.89 15 18 VND 23,177.5 0.00 0.00 0.02 13 16 Commodities 11 14 Latest Change (%) 9 12 Nov-19 Feb-20 May-20 Aug-20 Nov-19 Feb-20 May-20 Aug-20 close 1D 3M YTD Crude oil (US$/bbl) 39.7 5.0 -3.1 -41.4 Hong Kong China Thermal coal (US$/tonne) 58.4 0.0 11.3 -12.8 19 16 Iron ore (US$/tonne) 116.5 -1.0 12.8 27.2 15 17 Copper (US$/tonne) 6,791.5 1.2 13.5 10.3 14 Nickel (US$/tonne) 15,365.0 1.7 20.9 9.7 15 13 Tin (US$/tonne) 18,035.0 1.6 6.2 7.0 12 Gold (US$/ozt) 1,908.5 1.0 7.7 25.6 13 11 Palm oil (INR/tonne) 892.5 0.5 12.3 2.5

11 10 Soybean oil (c/lb) 34.7 1.4 34.1 1.0 Nov-19 Feb-20 May-20 Aug-20 Nov-19 Feb-20 May-20 Aug-20 Corn (US$/bu) 4.1 0.9 28.5 1.4 Wheat (US$/bu) 6.1 0.1 28.3 8.8 Source: FactSet, Mirae Asset Daewoo Research (updated on 11/04/20 at 23:00 KST)

[Korea] Semiconductors November 5, 2020

SK Hynix Buy (000660 KS) (Maintain)

Biggest beneficiary of 2021 DRAM upcycle TP: W110,000 Upside: 32.2%

Mirae Asset Daewoo Co., Ltd. Young-gun Kim [email protected] Yumi Cha [email protected]

3Q20 review Impact of weaker demand in server sector cushioned by normalized smartphone demand  For 3Q20, SK Hynix reported operating profit of W1.3tr (+175.1% YoY, -33.2% QoQ).  DRAM bit growth was 4%, better than guidance (flat).  Memory demand in the server sector softened, but a recovery in smartphone demand drove growth.

Supply/demand and price Increased smartphone memory content and server replacement demand to propel outlook growth in 2021  Assuming that 5G smartphone shipments (excluding Apple) reach 400mn units in 2021, we forecast mobile DRAM bit growth of 33.7%.  With the iPhone’s adoption of 6GB DRAM beginning with the iPhone 12, we forecast 2021 iPhone-bound DRAM bit growth of 31.7%.  Assuming a four-year server replacement cycle, we see shipments growing 7-10% YoY in 2H21 on replacement demand.  We forecast 2021 DRAM (supply minus demand) bit growth to be negative (-1.7%). As such, we expect the decline in DRAM prices to slow.  We expect DRAM ASP to dip 6.2% in 4Q20 and 2.1% in 1Q21, before gaining 11.4% in 2Q21.  We see the fall in NAND ASP continuing in 2021 (-16% YoY) due to increased industry supply.  We believe SK Hynix’s acquisition of Intel’s NAND business will allow the company to generate scale effects amid increasing competition.  We forecast 4Q20 operating profit at W1.0tr. We expect profits to bottom in 1Q21 and grow in the subsequent quarters.  We forecast 2021 operating profit at W9.4tr (+85.4% YoY).

Investment recommendation With DRAM price decline set to slow in 4Q20, time to buy  We recommend overweighting SK Hynix, in light of the strong earnings growth anticipated in 2H21.  We maintain our Buy call and target price of W110,000 on the stock.

Key data Current price (11/4/20, W) 83,200 Market cap (Wbn) 60,570 140 SK Hynix KOSPI OP (20F, Wbn) 5,048 Shares outstanding (mn) 728 120 Consensus OP (20F, Wbn) 4,877 Free float (%) 73.6 100 EPS growth (20F, %) 75.8 Foreign ownership (%) 48.7 80 P/E (20F, x) 17.1 Beta (12M) 0.98

60 Market P/E (20F, x) 16.2 52-week low (W) 69,000 11.19 3.20 7.20 11.20 KOSPI 2,357.32 52-week high (W) 105,000

Share performance Earnings and valuation metrics (%) 1M 6M 12M (Dec.) 2017 2018 2019 2020F 2021F 2022F Absolute -1.0 2.7 -1.8 Revenue (Wbn) 30,109 40,445 26,991 31,648 39,535 49,388 Relative -2.2 -17.4 -11.2 OP (Wbn) 13,721 20,844 2,713 5,048 9,359 12,124 OP margin (%) 45.6 51.5 10.1 16.0 23.7 24.5 NP (Wbn) 10,642 15,540 2,013 3,540 6,364 8,852 EPS (W) 14,617 21,346 2,765 4,863 8,741 12,160 ROE (%) 36.8 38.5 4.2 7.1 11.8 14.5 P/E (x) 5.2 2.8 34.0 17.1 9.5 6.8 P/B (x) 1.6 0.9 1.4 1.1 1.0 0.9 Div. yield (%) 1.3 2.5 1.1 1.2 1.2 1.2 Notes: Under consolidated K-IFRS; NP is attributable to owners of the parent 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 US. PLEASE SEE ANALYST CERTIFICATIONS AND IMPORTANT DISCLOSURES AND DISCLAIMERS IN APPENDIX 1 AT THE END OF REPORT. [Korea] Technology November 4, 2020

Spigen Korea Buy (192440 KQ) (Maintain)

Earnings surprise TP: W90,000 Upside: 31.4%

Mirae Asset Daewoo Co., Ltd. Wonjae Park [email protected]

3Q20 review Surprise OP of W41bn (+248.1% YoY, +269.1% QoQ)  For 3Q20, Spigen Korea reported revenue of W144.3bn (+72.8% YoY, +92.9% QoQ) and operating profit of W41bn (+248.1% YoY, +269.1% QoQ).  Revenue was slightly behind our estimate (W148.4bn), but operating profit beat our projection (W30.1bn) by 36%.  The consensus was expecting revenue of W145.4bn and operating profit of W28.3bn.

4Q20 outlook Earnings to hit record high based on main business alone  For 4Q20, we forecast revenue of W104.5bn (+13.1% YoY, -27.6% QoQ) and operating profit of W15.8bn (+34.7% YoY, -61.4% QoQ).  Based on the main business alone, we expect revenue and operating profit to hit quarterly records. OP margin should also stabilize to 16.6%.

Growth and stability of main Reiterate Buy and TP of W90,000 business, growth potential of  We expect Spigen Korea’s main business to continue growth and stability. We also see potential subsidiary, and stable balance for growth in Spigen Beauty. sheet  The company’s stable balance sheet and strong cash position also deserve attention.

Key data Current price (11/4/20, W) 68,500 Market cap (Wbn) 426 160 Spigen Korea KOSDAQ 140 OP (20F, Wbn) 80 Shares outstanding (mn) 6 120 Consensus OP (20F, Wbn) 67 Free float (%) 56.0 100 EPS growth (20F, %) 73.7 Foreign ownership (%) 16.2 80 P/E (20F, x) 6.1 Beta (12M) 0.92 60 40 Market P/E (20F, x) 16.1 52-week low (W) 28,200 11.19 3.20 7.20 11.20 KOSDAQ 826.97 52-week high (W) 78,200

Share performance Earnings and valuation metrics (%) 1M 6M 12M (Dec.) 2017 2018 2019 2020F 2021F 2022F Absolute -0.3 64.1 21.2 Revenue (Wbn) 225 267 309 398 370 392 Relative 2.3 27.4 -2.0 OP (Wbn) 48 49 44 80 61 65 OP margin (%) 21.3 18.4 14.2 20.1 16.5 16.6 NP (Wbn) 41 43 40 70 51 55 EPS (W) 6,540 6,870 6,489 11,275 8,273 8,879 ROE (%) 19.6 17.7 14.5 21.5 13.6 13.2 P/E (x) 6.9 7.6 7.9 6.1 8.3 7.7 P/B (x) 1.2 1.2 1.0 1.2 1.0 0.9 Dividend yield (%) 1.1 2.2 2.5 2.5 2.9 3.1 Notes: Under consolidated K-IFRS; NP is attributable to owners of the parent 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 US. PLEASE SEE ANALYST CERTIFICATIONS AND IMPORTANT DISCLOSURES AND DISCLAIMERS IN APPENDIX 1 AT THE END OF REPORT.