April 25, 2019 Korea Daily Focus

Company News & Analysis S-Oil (010950KS/Buy/TP: W120,000) Focus on the May IMO meeting

OCI (010060KS/Buy/TP: W140,000) Heading toward a promising 2H19

LG Chem (051910KS/Buy/TP: W520,000) Without peer in the battery market

LG International (001120KS/Buy/TP: W22,000) Profit structure shifting to logistics

Hyundai Motor (005380KS/Buy/TP: W166,000) Raise TP Start of a structural transition

Hite Jinro (000080KS/Hold) Impact of soju price hikes

POSCO INTERNATIONAL (047050KS/Buy/TP: W24,000) Record quarterly operating profit

Industrial Bank of Korea (024110KS/Buy/TP: W19,500) Solid earnings and robust loan growth expected for 1Q19

KB Financial Group (105560KS/Buy/TP: W65,000) Solid earnings power confirmed

POSCO (005490KS/Buy/TP: W375,000) Better-than-expected results

LG Display (034220KS/Buy/TP: W26,500) Too early to throw in the towel

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S-Oil (010950 KS ) Focus on the May IMO meeting

Oil Refining Focus on the May IMO meeting; reiterate as our top pick Results Comment In search of a direction: S-Oil’s shares have remained range-bound at depressed April 25, 2019 levels, due to low refining margins, concerns over lost earnings during maintenance , and weakening expectations related to the International Maritime Organiza tion’s (IMO) regulations. We expect earnings momentum to be weak through 2Q19, as refining margins are still low (despite recovering from the sharp drop in early 2019), and PX spreads will likely soften on the ramp-up of new facilities in China. While higher oil (Maintain) Buy prices are leading to valuation gains on inventory, the official selling price (OSP) is also rising; as such, the impact of IMO regulations on refining margins is a more important Target Price (12M, W) 120,000 variable than ever.

Share Price (04/24/19, W) 96,000 Focus on the May IMO meeting: If IMO regulations are implemented as planned , we are confident refining margins will pick up, as most suppliers are still unprepared to Expected Return 25% meet the regulations. We believe the key variable is the enforcement of the IMO regulations, and we recommend focusing on the upcoming IMO meeting scheduled for mid-May. Given the IMO’s overall stance, we believe the new regulations are likely to be OP (19F, Wbn) 1,227 implemented as scheduled, which should result in an increase in kerosene/diesel Consensus OP (19F, Wbn) 1,285 margins.

EPS Growth (19F, %) 185.0 Reiterate as our top pick: We maintain our Buy call and target price of W120,000 on S- Market EPS Growth (19F, %) -16.2 Oil and reiterate the stock as our top sector pick. Given its pure exposure to oil refining P/E (19F, x) 15.2 and completion of upgrading facilities, S-Oil looks best-positioned to benefit from IMO Market P/E (19F, x) 12.0 regulations. There are short-term risks to earnings, such as lower refining margins, KOSPI 2,201.03 softer PX spreads, and rising OSP. That said, considering S-Oil’s dividend yield under normal earnings conditions, we believe downside is limited. Market Cap (Wbn) 10,808 Shares Outstanding (mn) 117 1Q19 review: Earnings in line with lowered consensus Free Float (%) 36.5 1Q19 OP of W270.4bn: For 1Q19, S-Oil posted operating profit of W270.4bn, in line Foreign Ownership (%) 79.1 with the lowered consensus. Earnings turned around QoQ, as weak refining margins Beta (12M) 0.67 and maintenance effects were outweighed by valuation gains on inventories resulting 52-Week Low 89,600 from higher oil prices. 52-Week High 137,500 Conference call highlights: S-Oil projected that utilization of the newly completed (%) 1M 6M 12M RUC-ODC will be low in 2Q19, affected by routine maintenance of No. 2 RFCC , but will Absolute -0.1 -24.4 -16.5 operate at normal levels in 2H19. S-Oil also said that it expects a recovery in refining Relative -0.7 -28.0 -6.5 margins in 2H19.

120 S-Oil KOSPI 2Q19F OP of W259bn; improvement to come in 2H19 110 Earnings to remain flattish QoQ in 2Q19 and improve in 2H19: We expect S-Oil’s 100 2Q19 operating profit to remain flattish QoQ at W259 bn. While oil refining earnings will 90 80 likely be supported by a refining margin recovery and inventory valuation gains amid 70 the oil price uptrend, chemicals earnings are projected to weaken QoQ, due to softer 60 PX spreads and lower RUC-ODC utilization. We expect earnings to improve in 2H19, 4.18 8.18 12.18 4.19 aided by higher RUC-ODC utilization and better refining margins following implementation of the new IMO regulations. Mirae Asset Daewoo Co., Ltd.

[ Chemicals/Oil Refining/EV Batteries ] FY (Dec.) 12/16 12/17 12/18 12/19F 12/20F 12/21F Revenue (Wbn) 16,322 20,891 25,463 23,846 25,227 25,064 Yeon -ju Park +822 -3774 -1755 OP (Wbn) 1,617 1,373 639 1,227 1,970 1,713 [email protected] OP margin (%) 9.9 6.6 2.5 5.1 7.8 6.8

NP (Wbn) 1,205 1,246 258 735 1,374 1,217 EPS (W) 10,337 10,690 2,213 6,308 11,782 10,439 ROE (%) 20.5 18.8 3.9 10.8 18.0 14.4

P/E (x) 8.2 10.9 44.2 15.2 8.1 9.2 P/B (x) 1.5 2.0 1.8 1.6 1.4 1.3 Dividend yield (%) 7.3 5.0 0.8 3.2 5.3 4.8 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

OCI (010060 KS ) Heading toward a promising 2H19

Chemicals 2H19 looks promising; Reiterate as our top pick Supply to decline: OCI’s shares have remained range-bound at depressed levels due Results Comment to the sustained weakness in polysilicon prices. Capacity expansions by lower-cost Chinese polysilicon manufacturers added to supply-side burdens in the short term. April 25, 2019 However, we believe pressure on the supply side has peaked, as the new capacities are already online and China’s supply is set to decline from May due to routine maintenance. According to PV InfoLink, China’s Tongwei (600438 CH/CP: RMB14.68) is still restoring facilities damaged by fire, and other producers are scheduled to scale (Maintain) Buy back production in 2Q19, including GCL-Poly (3800 HK/CP: HK$0.57; from mid-May) as well as Combo, DL Silicon, and REC (REC NO/CP: NOK0.705; April-May). Based on PV Target Price (12M, W) 140,000 InfoLink, China’s domestic polysilicon prices have slightly recovered this week.

Share Price (04/24/19, W) 92,500 Demand to recover: We expect polysilicon demand to remain weak through 2Q19, as the finalization of the Chinese government’s solar PV policy was delayed. Given that Expected Return 51% some of the details were recently made public, we believe the Chinese government will soon announce the subsidy plan. Meanwhile, Indian demand also looks likely to recover starting in 3Q19. Given the strong demand outlook, we look for a significant OP (19F, Wbn) -1 increase in polysilicon prices in 2H19. Consensus OP (19F, Wbn) 114 Maintain TP of W140,000 and reiterate as top pick: We maintain our target price of EPS Growth (19F, %) - W140,000 on OCI and reiterate the stock as our top pick in the solar PV space. Although Market EPS Growth (19F, %) -16.2 earnings weakness is likely to continue through 2Q19, we believe polysilicon prices— P/E (19F, x) - the company’s biggest earnings variable—are passing through the bottom and poised Market P/E (19F, x) 12.0 to improve in 2H19. Global PV stocks are already starting to bounce back from short- term declines, supported by expectations on China’s policy. KOSPI 2,201.03

Market Cap (Wbn) 2,206 1Q19 review: Operating loss due to weak polysilicon prices Shares Outstanding (mn) 24 1Q19 operating loss of W40.6bn: For 1Q19, OCI reported an operating loss of Free Float (%) 77.6 W40.6bn, slightly missing our estimate. In the basic chemicals unit (which includes Foreign Ownership (%) 24.3 polysilicon), losses continued due to weak polysilicon prices. Petrochemical/ carbon Beta (12M) 1.78 chemicals earnings were also disappointing, hurt by lower carbon black prices. 52-Week Low 81,200 Conference call highlights: On its earnings call, OCI said it expected a recovery in 52-Week High 167,000 global solar PV demand in 2H19, driven by China. Solar PV demand was weak in 1Q19, (%) 1M 6M 12M with new installations in China amounting to just 5GW due to delays in the new subsidy Absolute -6.1 2.0 -44.6 program. However, OCI anticipates a sharp increase in PV installations in 2H19, as Relative -6.7 -2.8 -38.0 China’s annual PV demand will likely increase to 40GW once the governmen t’s policy is confirmed. OCI also sees a significant decline in total production costs once Malaysian

120 OCI KOSPI facilities are brought back to full production in 3Q19, following completion of the

100 ongoing debottlenecking project.

80 Operating loss to narrow in 2Q19; earnings to recover significantly in 2H19: We

60 expect operating losses to slightly narrow QoQ to W29.8bn in 2Q19, supported by higher utilization in Korea and a resulting decline in production costs. The biggest 40 4.18 8.18 12.18 4.19 earnings variable in 2H19 and beyond will likely be polysilicon prices. We expect polysilicon prices to increase significantly in 2H19 on the back of improved supply and demand dynamics amid production cuts by higher-cost suppliers and a recovery in Mirae Asset Daewoo Co., Ltd. Chin ese demand. [ Chemicals/Oil Refining/EV Batteries ] FY (Dec.) 12/16 12/17 12/18 12/19F 12/20F 12/21F Revenue (Wbn) 2,737 3,632 3,112 2,999 3,606 3,606 Yeon -ju Park +822 -3774 -1755 OP (Wbn) 133 284 159 -1 339 380 [email protected] OP margin (%) 4.9 7.8 5.1 0.0 9.4 10.5

NP (Wbn) 242 235 104 -33 238 283 EPS (W) 10,151 9,849 4,352 -1,379 9,995 11,846 ROE (%) 7.9 7.2 3.1 -1.0 6.8 7.6

P/E (x) 7.8 13.8 24.6 - 9.3 7.8 P/B (x) 0.6 1.0 0.7 0.7 0.6 0.6 Dividend yield (%) 0.5 1.4 0.8 0.9 0.9 0.2 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

LG Chem (051910 KS ) Without peer in the battery market

Chemicals ESS issue to subside, and battery momentum to recover in 2H19; Reiterate as one of our top picks Results Comment April 25, 2019 Impact of ESS issue to be temporary; battery momentum to recover in 2H19: LG Chem’s shares remain range-bound due to a series of ESS fires in Korea and a slower- than-expected chemicals cycle recovery. However, we expect the ESS issue to dissipate in 1H19 and the EV battery unit’s margin to improve rapidly , driven by the release of third-generation EVs. While auto companies have raised their EV sales targets amid a (Maintain) Buy faster-than-expected demand recovery, there are a limited number of companies capable of supplying quality batteries. We believe the 1Q19 earnings call also supports Target Price (12M, W) 520,000 our expectation of a rapid recovery in battery profits.

Share Price (04/24/19, W) 361,500 Maintain TP of W520,000; Reiterate as our top pick: We maintain our Buy rating and target price of W520,000 on LG Chem, and reiterate the stock as one of our top picks in Expected Return 44% chemicals. We expect the ESS issue to subside in April/May. And as China’s demand conditions improve, especially in the home appliance and auto sectors, we believe the chemicals cycle will recover, led by the ABS segment. We recommend taking advantage OP (19F, Wbn) 2,160 of any near-term correction as a buying opportunity for 2H19. Consensus OP (19F, Wbn) 2,070 1Q19 review: Below-consensus earnings due to one-off expenses (including EPS Growth (19F, %) -1.3 ESS provisions) Market EPS Growth (19F, %) -16.2 1Q19 OP of W275.4bn: LG Chem’s 1Q19 operating profit came in at W275.4bn, slightly P/E (19F, x) 19.5 below the lowered consensus. The battery unit posted a larger-than-expected loss due Market P/E (19F, x) 12.0 to one-off expenses of W120bn (including provisioning related to ESS fires and lost KOSPI 2,201.03 sales).

Market Cap (Wbn) 25,519 Conference call highlights: LG Chem said the impact of the ESS issue may continue in Shares Outstanding (mn) 78 2Q19, though at a smaller scale. The company expects EV battery margins to improve Free Float (%) 64.3 in 2H19 and reach the high-single-digit level over the medium term. Regarding Foreign Ownership (%) 39.0 concerns over price-cutting competition in the battery segment, LG Chem pointed out Beta (12M) 1.49 that it has successfully won orders even with its high-margin-oriented strategy. As for 52-Week Low 307,000 chemicals, the company expects China demand to gradually recover on the back of 52-Week High 394,500 policy efforts to boost consumption.

(%) 1M 6M 12M 2Q19 OP to improve; Batteries to fuel earnings improvement in 2H19 Absolute -4.7 9.4 -3.5 2Q19 OP to improve QoQ to W482.3bn: We forecast 2Q19 operating profit to improve Relative -5.4 4.2 8.1 QoQ to W482.3bn. Despite the slow recovery of spreads, chemical earnings should improve, aided by the removal of the 1Q19 maintenance impact and ABS capacity 110 LG Chem KOSPI ramp-ups in China. We expect battery losses to shrink as the impact of the ESS issue 100 subsides. 90 Battery momentum to pick up in 2H19: We believe the battery unit will fuel earnings 80 improvement in 2H19. Once the final results of an ESS safety investigation are released

70 in 1H19, battery earnings should normalize in 2H19. Moreover, EV battery momentum 4.18 8.18 12.18 4.19 should pick up in 2H19 with the full-scale production of third-generation EVs.

Mirae Asset Daewoo Co., Ltd.

[ Chemicals/Oil Refining/EV Batteries ] FY (Dec.) 12/16 12/17 12/18 12/19F 12/20F 12/21F Revenue (Wbn) 20,659 25,698 28,183 31,654 38,329 41,661 Yeon -ju Park +822 -3774 -1755 OP (Wbn) 1,992 2,928 2,246 2,160 3,184 3,564 [email protected] OP margin (%) 9.6 11.4 8.0 6.8 8.3 8.6

NP (Wbn) 1,281 1,945 1,473 1,454 2,163 2,416 EPS (W) 17,336 24,854 18,812 18,576 27,628 30,865 ROE (%) 9.5 12.9 8.9 8.3 11.4 11.6

P/E (x) 15.1 16.3 18.4 19.5 13.1 11.7 P/B (x) 1.4 1.9 1.6 1.5 1.4 1.3 Dividend yield (%) 1.9 1.5 1.7 1.7 1.7 1.7 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

LG International (001120 KS ) Profit structure shifting to logistics

Energy 1Q19 review: Logistics business drives better-than-expected results Results Comment For 1Q19, LG International posted revenue of W2.54tr (+6.5% YoY). Revenue from the April 25, 2019 logistics business (Pantos Logistics) grew 10% YoY to W966.4bn, accounting for more than half (56%) of overall revenue growth. Revenue from the E&P business fell 7.8% YoY to W270.8bn, hurt by unfavorable conditions in the coal market, lower production at the MPP mine, and a reduction in oil operations. (Maintain) Buy Operating profit came in at W53.3bn (-12.2% YoY), above the market consensus (W46.8bn). Operating profit from the coal business slumped to W12.1bn (-64.3% YoY) Target Price (12M, W) 22,000 due to market deterioration, but the impact was largely offset by the infrastructure (W12.7bn; +19.8% YoY) and logistics (W30.4bn; +45.5% YoY) businesses. In particular, Share Price (04/24/19, W) 17,100 logistics OP margin rose to 3.1%, the highest level in three years. Net profit improved sharply to W82.6bn (vs. loss of W87.5bn in 1Q18). Equity-method Expected Return 29% profits and dividend income normalized to W8.3bn (vs. loss of W14.6bn in 4Q18), and the company’s tax penalty (originally decided last year) was adjusted from W71.1bn to W23.5bn, resulting in a roughly W50bn tax gain. OP (19F, Wbn) 213 Consensus OP (19F, Wbn) 199 Profit structure shifting from E&P to logistics

EPS Growth (19F, %) - 1) E&P restructuring: LG International has been scaling back its E&P operations, Market EPS Growth (19F, %) -16.2 including selling its oil investment business last year, in an effort to unload low-return P/E (19F, x) 4.1 projects and lessen its earnings volatility. Looking ahead, we expect the E&P business Market P/E (19F, x) 12.0 to realign toward coal and palm oil. KOSPI 2,201.03 For coal, we believe the company will search for new coal mine investments that can Market Cap (Wbn) 663 replace the MPP mine (where production is falling), while also ramping up production Shares Outstanding (mn) 39 at the GAM mine. For palm oil, the company is likely to focus on stabilizing its new Free Float (%) 73.4 plantations. That said, we expect E&P operating profit to stabilize lower to around W10- Foreign Ownership (%) 13.2 13bn. Beta (12M) 1.54 2) Logistics: The logistics business accounted for 58% of overall operating profit in 52-Week Low 14,700 2018, up from 35% in 2017. We expect that figure to remain at around 60% for some 52-Week High 30,400 time. We forecast logistics revenue to surpass W4tr in 2019, driven by group affiliate vol ume and overseas operations. More encouragingly, OP margin has been (%) 1M 6M 12M normalizing to the 3% level. We expect such robust margins, which are being driven by Absolute 0.3 -4.5 -37.8 some high-margin affiliate projects, to continue for some time. Relative -0.3 -9.0 -30.4 Retain Buy and TP of W22,000 120 LG International KOSPI

100 We re tain our Buy rating and target price of W22,000 on LG International. Given the ongoing shift in profit structure toward logistics, we think the stock is undervalued at 80 current levels (P/E of 5x). Looking ahead, once signs of normalization in E&P profits

60 emerge, the stock could bounce back, further fueled by expectations on dividend hikes.

40 4.18 8.18 12.18 4.19

Mirae Asset Daewoo Co., Ltd.

[ Transport/Energy ] FY (Dec.) 12/16 12/17 12/18 12/19F 12/20F 12/21F Revenue (Wbn) 11,967 12,827 9,988 10,396 10,782 11,195 Jay JH Ryu +822 -3774 -1738 OP (Wbn) 174 212 166 213 227 243 [email protected] OP Margin (%) 1.5 1.7 1.7 2.0 2.1 2.2

NP (Wbn) 58 60 -70 161 133 143 EPS (W) 1,500 1,553 -1,815 4,154 3,422 3,684 ROE (%) 4.8 4.9 -6.1 13.4 9.9 9.7

P/E (x) 19.5 17.5 - 4.1 5.0 4.6 P/B (x) 0.9 0.9 0.5 0.5 0.5 0.4 Dividend Yield (%) 0.9 0.9 1.6 1.5 1.5 1.5 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

Hyundai Motor (005380 KS ) Start of a structural transition

Auto 1Q19 review: Overcoming worries about China Results Comment For 1Q19, Hyundai Motor (HMC) reported revenue of W23.99tr (+6.9% YoY), operating profit of W824.9bn (+21.1% YoY; OP margin of 3.4%; +0.4%p YoY), and net profit April 25, 2019 attributable to controlling interests of W829.5bn (+24.2% YoY). Operating profit beat the market consensus (W770.2bn), which had been continuously lowered over the past couple of months. Global wholesales fell 2.7% YoY to 1.05mn units, but inched up 0.4% YoY to 887,000 (Maintain) Buy units when excluding China. We believe the company fared well, g iven that global auto demand declined 6.7% during 1Q19 . By region, wholesales were down YoY in China, Target Price (12M, W) ▲ 166,000 Europe, North America, Latin America, and India, but up YoY in Korea, Russia, and other markets. Notably, domestic sales climbed 8.7% YoY, driven by the new Palisade Share Price (04/24/19, W) 138,500 and the Genesis G70/G90. Revenue grew across all business divisions. Auto revenue gained 7% YoY , supported by Expected Return 20% an increased sales mix of high-margin SUVs and new models. Finance revenue rose 1.8% YoY on the back of higher sales of financing products for new domestic models and continued improvement in residual values in the US. Other revenue grew 20.8% OP (19F, Wbn) 3,394 YoY, amid top-line expansion and a favorable comparison. Consensus OP (19F, Wbn) 3,621 Operating profit improved sharply, due to sales unit growth and product mix EPS Growth (19F, %) 139.2 improvements, although such positive effects were partly offset by currency headwinds and higher material, marketing, and R&D expenses. On the non-operating Market EPS Growth (19F, %) -16.2 side, financial income was boosted by F/X translation gains from the appreciation of P/E (19F, x) 10.8 emerging market currencies, while equity-method profits were lifted by earnings Market P/E (19F, x) 12.0 improvements at associates. Other non-operating losses also narrowed in the quarter . KOSPI 2,201.03 Commercial appeal and demand already proven; key issue going forward will Market Cap (Wbn) 29,593 be expenses Shares Outstanding (mn) 277 We are also bullish on 2H19, as the hugely popular Palisade should continue to drive Free Float (%) 65.8 top line and profitability. Product mix should improve further, aided by Palisade’s US- Foreign Ownership (%) 44.7 bound exports and a robust new SUV lineup that includes several highly anticipated Beta (12M) 0.96 models (Kona, Santa Fe, and Venue). 52-Week Low 92,800 The key issue going forward will be expenses. Given increasing monitoring over quality 52-Week High 164,000 by transportation authorities and growing consumer awareness over safety, we expect (%) 1M 6M 12M spending related to quality to continue to intensify. Growing sales of eco-friendly vehicles amid tighter environmental regulations should also lead to a continued rise in Absolute 12.1 18.4 -14.8 R&D expenses. Another potential concern is one-off expenses that may result from the Relative 11.4 12.8 -4.6 investigation into the automaker’s Theta II engines and airbags.

130 Hyundai Motors KOSPI Maintain Buy, and raise TP by 3.8% to W166,000 110 We raise our target price on HMC to W166,000, applying a P/E of 10x to our 2019F net

90 profit estimate (W3.55tr). We view our target multiple as reasonable, given that product mix is improving faster than expected, thanks to inventory management , while 70 the strong demand witnessed so far for the first batch of the company’s new models

50 bodes well for the coming new cycle. 4.18 8.18 12.18 4.19

Mirae Asset Daewoo Co., Ltd.

[ Autos ] FY (Dec.) 12/15 12/16 12/17 12/18 12/19F 12/20F Revenue (Wbn) 91,959 93,649 96,376 96,813 100,277 106,523 Minkyung Kim +822 -3774 -1732 OP (Wbn) 6,358 5,194 4,575 2,422 3,394 4,430 [email protected] OP margin (%) 6.9 5.5 4.7 2.5 3.4 4.2

NP (Wbn) 6,417 5,406 4,033 1,508 3,546 4,076 EPS (W) 22,479 18,938 14,127 5,352 12,803 14,719 ROE (%) 10.7 8.4 5.9 2.2 5.1 5.7

P/E (x) 6.6 7.7 11.0 22.1 10.8 9.4 P/B (x) 0.7 0.6 0.6 0.5 0.5 0.5 Dividend yield (%) 2.7 2.7 2.6 3.4 2.9 2.9 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

Hite Jinro (000080 KS ) Impact of soju price hikes

Food & Beverage Soju factory price raised by 6.5% Company Report Hite Jinro announced that it was raising the factory price (ex-fac tory price plus taxes) of April 24, 2019 its soju brands, Chamisul Fresh and Chamisul Classic (360ml), by 6.5% (W65.5) to W1,081.2 per bottle (from W1,015.7) effective May 1st . The move was widely anticipated, following Oriental Brewery’s (OB) recent beer price increases (average of 5.3%) on April 4 th . We believe other soju makers, such as Lotte Chilsung (005300 KS/CP: W1,762,000), Muhak, and Bohae Brewery, will soon follow Hite Jinro’s lead and increase (Maintain) Hold prices.

Target Price (12M, W) - The latest price hike is the first since November 2015. As a result of the increase, soju retai l prices at convenience stores and hypermarkets are expected to rise by around Share Price (04/24/19, W) 19,600 W90-100. Restaurants and bars, which have been raising beer prices following the factory price hikes, also look likely to raise soju prices with some time lag. Expected Return - In 2018, Hite Jinro’s soju revenue totaled around W1.04tr . Of this, domestic revenue, which is subject to the latest price hike, was roughly W870bn. We estimate the price increase to boost annual soju revenue by W45-50bn. The impact on operating profit is OP (19F, Wbn) 90 likely to be more modest, at around W10-15bn, due to cost pressures ( soju/beer costs Consensus OP (19F, Wbn) 100 to increase W30-35bn). If restaurants and bars also increase soju prices, demand could EPS Growth (19F, %) 10.3 temporarily take a hit, reducing the impact of the factory price hike. Market EPS Growth (19F, %) -16.2 We believe Hite Jinro could also raise its beer prices in 2H19 (market leader OB already P/E (19F, x) 56.9 increased prices in April). Hite Jinro’s domestic beer revenue (excluding imported beer) Market P/E (19F, x) 12.0 was around W600bn in 2018. We think the company’s traditional lager brands (Hite, KOSPI 2,201.03 etc.) and FiLite would be included in the price increases, but not its new brand Terra . If Market Cap (Wbn) 1,375 Hite Jinro hikes its factory beer prices by 5%, we estimate this would bring the company Shares Outstanding (mn) 71 an additional W25-30bn in revenue. Free Float (%) 43.6 Increasing soju market share Foreign Ownership (%) 12.7 Beta (12M) 0.25 Hite Jinro’s soju market share has continued to increase, reaching 53% in 2018. In particular, the company has been gaining ground in regions outside the Seoul capital 52-Week Low 15,300 area, with market share rising to 12-15% in Busan/Ulsan/Gyeongnam (from 4-5% two 52-Week High 21,800 to three years ago), 55% in Honam (from 30-40%), 40-45% in Jeju, and 25-30% in (%) 1M 6M 12M Daegu/Gyeongbuk. That said, the company’s market share has slightly fallen to 65% in Absolute 9.2 21.0 -9.9 the Seoul capital area, where competition with Lotte Chilsung (market share estimated Relative 8.5 15.3 0.9 at 19%) is intensifying.

110 Hite Jinro KOSPI Maintain Hold, but watch for positive momentum in 2H19 100 Despite the latest soju price hike, we expect earnings to remain depressed due to 90 heavy marketing spending on the new beer brand Terra in 1Q-2Q19. However, we see 80 positive earnings momentum in 2H19 coming from the effects of the soju price hikes

70 and stabilizing beer sales (increased sales of Terra, FiLite, and imported beer). We think

60 2H19 will provide a better investment opportunity than 1H19. 4.18 8.18 12.18 4.19

Mirae Asset Daewoo Co., Ltd.

[ F&B ] FY (Dec.) 12/16 12/17 12/18 12/19F 12/20F 12/21F Revenue (Wbn) 1,890 1,890 1,886 1,954 1,996 2,034 Woon -mok Baek +822 -3774 -1679 OP (Wbn) 124 87 90 90 100 103 [email protected] OP margin (%) 6.6 4.6 4.8 4.6 5.0 5.1

NP (Wbn) 38 13 22 25 33 39 EPS (W) 538 178 312 344 465 547 ROE (%) 2.9 1.0 1.9 2.1 3.0 3.5

P/E (x) 39.2 135.4 53.2 56.9 42.2 35.9 P/B (x) 1.1 1.3 1.0 1.2 1.2 1.2 Dividend yield (%) 4.3 3.3 4.8 4.1 4.1 4.1 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

POSCO INTERNATIONAL (047050 KS ) Record quarterly operating profit

Energy 1Q19 review: Record quarterly operating profit Results Comment For 1Q19, POSCO International reported revenue of W6.18tr (+0.2% YoY). The softness April 25, 2019 was attributable to a 25% revenue decline in the mobility/industrial materials segment (previously named machinery/infrastructure), related to restructuring. Elsewhere, ste el revenue grew on strong domestic steel sales and iron ore supplies, while the agro/chemicals segment also contributed to revenue growth, thanks to robust feed sales. (Maintain) Buy Despite sluggish revenue, operating profit expanded to W164.4bn (+9.5% YoY), a Target Price (12M, W) 24,000 quarte rly record, beating our estimate (W64bn) and the consensus. Operating profit from the Myanmar gas field project came in stronger than expected, at W102.8bn Share Price (04/24/19, W) 18,550 (+17.2% YoY; W111.4bn before cost allocation). Gas sales volume fell roughly 3% YoY to 570MMCFD, but ASP jumped more than 10%, driving sharp margin improvements. All Expected Return 29% other businesses, aside from overseas steel, contributed to profit growth.

Pretax profit declined 3.8% YoY to W122bn, as equity-method losses from the Wetar copper mine (loss of W9.5bn, due to one-off derivative losses) and Ambatovy mine (loss OP (19F, Wbn) 580 of W7.8bn) led to equity-method profits worsening by W13.7bn QoQ and W9.2bn YoY. Consensus OP (19F, Wbn) 548 Net profit contracted 21.4% YoY to W71.4bn, weighed by a temporary increase in tax EPS Growth (19F, %) 71.1 payments, partly due to taxation on unused earnings. Market EPS Growth (19F, %) -16.2 Solid gas field earnings and progress in new businesses P/E (19F, x) 8.6 Market P/E (19F, x) 12.0 1) Myanmar gas field: Gas sales volume has been falling, due to warmer weather KOSPI 2,201.03 conditions. However , we believe strong pricing will continue, and expect China to increase its gas p urchases by 10% YoY in 2Q19 in order to fulfill its purchase Market Cap (Wbn) 2,289 requirements. While 2Q is a seasonally weak quarter, we forecast quarterly operating Shares Outstanding (mn) 123 profit from the Myanmar gas field project to remain at around W70-100bn. Free Float (%) 36.6 Foreign Ownership (%) 9.9 2) New businesses: New businesses that have been highlighted in the company’s long- Beta (12M) 0.88 term vision, such as agro/chemicals and LNG trading, are beginning to deliver visible results. At the agro/chemicals division, revenue grew 18% YoY in 1Q19. Grain revenue 52-Week Low 17,150 is expected to expand to W2.5tr (10m n tonnes) by 2023, helped by the recent 52-Week High 25,650 acquisition of a grain terminal in Ukraine. (%) 1M 6M 12M For the LNG trading business, which is expected to benefit from synergies with group Absolute 3.1 1.1 -22.9 affiliates, the company is aiming to increase trading volume from 750,000 tonnes in Relative 2.4 -3.7 -13.6 20 19 to 1.5mn tonnes by 2021. Given that group affiliate volume is estimated at around 120 POSCO INTERNATIONAL 2mn tonnes, we expect the company to have little problem reaching its target. KOSPI 110 100 Maintain Buy and TP of W24,000 90 We reiterate our Buy call and target price of W24,000 on POSCO International. While 80 the stock has lagged the recent rise in oil prices, we expect momentum to recover on 70 the back of: 1) robust earnings; and 2) more upbeat forecasts for the Myanmar gas 60 4.18 8.18 12.18 4.19 project’s sales volume. At a P/E of 8.6x, we believe current valuation offers an attractive entry point.

Mirae Asset Daewoo Co., Ltd.

[ Transport/Energy ] FY (12) 12/16 12/17 12/18 12/19F 12/20F 12/21F Revenue (Wbn) 16,492 22,572 25,174 26,652 28,696 30,531 Jay JH Ryu +822 -3774 -1738 OP (Wbn) 318 401 473 580 609 635 [email protected] OP margin (%) 1.9 1.8 1.9 2.2 2.1 2.1

NP (Wbn) 111 176 155 265 358 348 EPS (W) 977 1,444 1,258 2,152 2,905 2,822 ROE (%) 4.5 6.6 5.4 8.9 11.2 10.1

P/E (x) 27.6 12.6 14.5 8.6 6.4 6.6 P/B (x) 1.2 0.8 0.8 0.7 0.7 0.6 Dividend yield (%) 1.9 2.8 3.3 4.3 4.9 4.9 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

Industrial Bank of Korea (024110 KS ) Solid earnings and robust loan growth expected for 1Q19 Banks 1Q19 preview: Net profit of W541.6bn Earnings Preview For 1Q19, we project Industrial Bank of Korea (IBK) to post solid net profit of W541.6bn April 25, 2019 (+6.1% YoY, +79.2% QoQ), above the recently raised consensus (W529.9bn based on Bloomberg; W528.1bn based on FnGuide). We believe earnings were supported by: 1) the absence of major one-off items; 2) loan growth of 2.3% QoQ; and 3) well-managed credit costs.

(Maintain) Buy Only soft spot is NIM In 1Q19, we estimate net interest margin (NIM) slipped 3bps QoQ due to the adoption Target Price (12M, W) 19,500 of IFRS 15, which requires credit card marketing expenses to be deducted from credit card fees. (Samsung Card [029780 KS/Trading Buy/TP: W38,500/CP: W34,750] adopted Share Price (04/24/19, W) 14,200 the changes in 4Q18. Of note, IBK and regional banks reflect credit card fees in NIM.) We believe ultra-low-rate loan programs for self-employed businesses (which have low Expected Return 37% margins) and loan programs tied to the credit card sales of self-employed businesses also had a somewhat negative impact on NIM. However, we estimate total loans grew

2.3% QoQ, leading to net interest income of W1.48tr (+7.0% YoY, -0.05% QoQ). We NP (19F, Wbn) 1,815 expect net commission income of W107.5bn (-1.6% YoY, -8.7% QoQ). We estimate Consensus NP (19F, Wbn) 1,783 SG&A expenses were very well-contained at W556.6bn (+3.0% YoY, -8.0% QoQ), translating to a cost-to-income ratio of 33.7% (-0.8%p YoY, -5.7%p QoQ). Credit costs EPS Growth (19F, %) 2.0 also likely remained stable, at W333bn (+1.6% YoY, -36.2% QoQ), or 47bps (-0.4bps YoY, Market EPS Growth (19F, %) -16.2 -25bps QoQ) of total assets. P/E (19F, x) 5.2 Market P/E (19F, x) 12.0 New share issuance to government KOSPI 2,201.03 On February 19 th , IBK’s board approved the issuance of 14,965,579 new shares (2.3% of Market Cap (Wbn) 8,164 total shares outstanding) to the government for around W200bn at W13,364 per share th Shares Outstanding (mn) 673 (5% discount to base price). Payment was received on February 28 , and the new th Free Float (%) 43.5 shares were listed on March 13 . IBK stated that the purpose of the share issue was to Foreign Ownership (%) 23.6 maintain its BIS ratio, while supporting the implementation of spec ial programs for Beta (12M) 0.43 small and self-employed businesses and investments in new growth/innovati ve 52-Week Low 13,300 businesses. The latest share issue, which highlights IBK’s public role as a government- 52-Week High 17,000 owned bank, can hardly be seen as positive to regular shareholders.

(%) 1M 6M 12M Maintain Buy and TP of W19,500 Absolute 0.0 -3.7 -15.2 Even after considering discount factors, such as the public nature of the bank’s Relative -0.6 -8.3 -5.1 business compared to peers and the recent equity issue to the government, we still think IBK is undervalued relative to its ability to generate steady profits on the back of 110 Industrial Bank of Korea KOSPI robust SME loan growth. Based on current share prices, we estimate the stock’s 2019 100 dividend yield at 5.1% for regular shareholders.

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Mirae Asset Daewoo Co., Ltd. Fiscal year-end 12/16 12/17 12/18 12/19F 12/20F 12/21F Net interest inc. (Wbn) 4,876 5,260 5,632 5,918 6,221 6,530 [ Banks/Credit Cards ] Net non-interest inc. (Wbn) 64 340 626 611 602 603 Operating profit (Wbn) 1,533 2,028 2,396 2,525 2,622 2,714 Heather Kang +822 -3774 -1903 Net profit (Wbn) 1,158 1,501 1,754 1,815 1,892 1,964 [email protected] EPS (W) 1,763 2,282 2,666 2,721 2,812 2,918

EPS growth (%) 0.7 29.4 16.8 2.0 3.3 3.8 P/E (x) 8.1 6.2 5.3 5.2 5.1 4.9 P/PPOP (x) 2.9 2.4 2.1 2.0 1.9 1.8

P/B (x) 0.52 0.47 0.45 0.42 0.40 0.37 ROE (%) 6.6 8.0 8.6 8.3 8.1 7.8 Dividend yield (%) 3.4 4.3 4.9 5.1 5.4 5.6 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

KB Financial Group (105560 KS ) Solid earnings power confirmed

Banks 1Q19 review: Net profit of W845.7bn Results Comment For 1Q19, KB Financial Group (KBFG) announced net profit attributable to controlling April 25, 2019 interests of W845.7bn (-12.7% YoY, +339.4% QoQ), in line with our estimate (W832.8bn) and the consensus (W840.6bn based on Bloomberg; W859.5bn based on FnGuide). Major one-off items in the quarter included: 1) W101bn in employee welfare fund contributions; and 2) W48bn in early retirement expenses. The latter reflected the group’s decision during the book-closing process to record some of its W268bn early (Maintain) Buy retirement expenses in 1Q19 rather than recognizing all of them in 4Q18. Adjusting for the two one-off items and tax effects, we estimate underlying net profit was healthy, at Target Price (12M, W) 65,000 the mid-W900bn level.

Share Price (04/24/19, W) 45,350 Positive highlights Bank net interest margin (NIM) gained 1bp QoQ to 1.71%, thanks to efforts to improve Expected Return 43% asset returns. Group net commission income was W550.6bn (-12.4% YoY, +11.1% QoQ), lower than the unusually strong 1Q18 and 2Q18 levels , but higher than the 3Q18 and

4Q18 levels. Earnings also improved at securities and non-life insurance subsidiaries NP (19F, Wbn) 3,393 (which were major drags on 4Q18 earnings). Capital ratios remained the highest in the Consensus NP (19F, Wbn) 3,216 sector, with group BIS and CET1 ratios rising 23bps and 21bps QoQ to 14.84% and 14.18%, respectively, at end-1Q19. New NPL formation (ban k and credit card) EPS Growth (19F, %) 10.8 remained benign, at W254.3bn (-3.9% YoY, -32.7% QoQ), or 35bps (annualized; -5bps Market EPS Growth (19F, %) -16.2 YoY, -17bps QoQ) of total credit. P/E (19F, x) 5.6 Market P/E (19F, x) 12.0 Negative highlights KOSPI 2,201.03 Bank won-denominated loan growth was meager, at 0.3% QoQ. However, we do not Market Cap (Wbn) 18,961 see any major cause for concern, given that the slowdown is consistent with Shares Outstanding (mn) 418 management’s conservative loan strategy of prioritizing soundness and profitability Free Float (%) 83.7 over growth in 2019. Moreover, the asset base expansion resulting from robust loan Foreign Ownership (%) 67.1 growth in 2018 (+9.6%; the highest among banks under our coverage) is likely to Beta (12M) 0.58 contribute to interest income growth in 2019. That said, given management’s 4-5% full- 52-Week Low 40,750 year loan growth guidance, it may need to be more aggressive from 2Q19. 52-Week High 61,300 Maintain Buy and TP of W65,000 (%) 1M 6M 12M We believe KBFG is undervalued in absolute terms, given its solid earnings power, Absolute 6.7 -13.0 -26.0 robust capital position, and dividend appeal. Based on our estimates, the stock is Relative 6.0 -17.0 -17.2 trading at a 2019F P/B of 0.5x (vs. 2019F ROE of 9.3%) and a 2019F P/E of 5.6x (vs . 2019F EPS growth of 10.8%), and offers a dividend yield of 5.0%. 110 KB Financial Group KOSPI 100

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Mirae Asset Daewoo Co., Ltd. Fiscal year-end 12/16 12/17 12/18 12/19F 12/20F 12/21F Net interest inc. (Wbn) 6,403 7,853 8,905 9,296 9,721 10,043 [ Banks/Credit Cards ] Net non-interest inc. (Wbn) 1,042 2,339 1,955 2,169 2,220 2,272 Operating profit (Wbn) 1,677 4,016 4,267 4,683 4,859 5,055 Heather Kang +822 -3774 -1903 Net profit (Wbn) 2,144 3,312 3,061 3,393 3,528 3,670 [email protected] EPS (W) 5,520 8,036 7,321 8,114 8,438 8,777

EPS growth (%) 25.6 45.6 -8.9 10.8 4.0 4.0 P/E (x) 8.2 5.6 6.2 5.6 5.4 5.2 P/PPOP (x) 8.6 4.2 3.8 3.4 3.2 3.1

P/B (x) 0.61 0.56 0.53 0.50 0.46 0.42 ROE (%) 7.2 10.2 8.8 9.3 9.0 8.5 Dividend yield (%) 2.8 4.2 4.2 5.0 5.3 5.6 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

POSCO (005490 KS ) Better -than -expected results

Steel 1Q19 review: Better-than-expected results Results Comment For 1Q19, POSCO announced non-consolidated revenue of W7.8tr (+0.7% YoY, +7.2% April 25, 2019 QoQ) and operating profit of W833bn (-18.1% YoY, -5% QoQ). Operating profit came in 10% above the market consensus (W760bn). The market had been anticipating a bigger decline in earnings QoQ, due to lower selling prices and cost hikes. Earnings were better than expected, however, as the decline in selling prices was likely offset by a lower production cost per tonne, thanks to volume effects (increase in production and (Maintain) Buy sales volume).

Target Price (12M, W) 375,000 POSCO’s consolidated revenue and operating profit were W16tr (+1% YoY, -3.7% QoQ) and W1.2tr (-19.1% YoY, -5.4% QoQ), respectively. By business, operating profit from Share Price (04/24/19, W) 258,500 the steel unit declined W120bn QoQ, hurt by lower steel prices. Operating profit from the trading unit grew W77bn, supported by increased output at the Myanmar gas field. Expected Return 45% The energy division, after posting a loss of W42bn in 4Q18, due to fuel-cell inventor y valuation losses, turned to an operating profit of W66bn, supported by a favorable comparison and LNG power-generation price hikes . We believe operating profit from OP (19F, Wbn) 4,620 other units remained flattish QoQ. Consensus OP (19F, Wbn) 4,780 Higher costs to support ongoing product price hikes EPS Growth (19F, %) 69.3 We believe the strength in raw material prices will continue throughout the year. In Market EPS Growth (19F, %) -16.2 addition to the impact of Vale’s burst dam, the recent tropical cyclone Veronica in P/E (19F, x) 7.9 Australia is likely to cause iron ore supply disruptions at Rio Tinto, BHP, and FMG. Iron Market P/E (19F, x) 12.0 ore prices remain above US$90/tonne. KOSPI 2,201.03 As costs continue to rise, we expect POSCO to further raise its prices. It is easier for Market Cap (Wbn) 22,538 POSCO than for its rivals to pass on higher costs because of its integrated steel mill Shares Outstanding (mn) 87 (which operates both upstream and downstream processes) and well-diversified Free Float (%) 79.5 geographical/product base. Foreign Ownership (%) 54.9 Beta (12M) 1.21 Maintain Buy and TP of W375,000 52-Week Low 237,000 We maintain our target price of W375,000 on POSCO, which we derived using a P/B- 52-Week High 372,500 ROE valuation. In light of the upside potential, we retain our Buy rating. Despite last year’s robust earnings, POSCO’s shares have retreated, as a result of heightened (%) 1M 6M 12M uncertainties over US-China trade disputes. Looking ahead, we expect shares to Absolute -0.2 -2.8 -27.0 bounce back as US-China trade worries subside. Relative -0.8 -7.4 -18.2

120 POSCO KOSPI 110 100 90 80

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Mirae Asset Daewoo Co., Ltd.

[ Advanced Materials/Metals ] FY (Dec.) 12/16 12/17 12/18 12/19F 12/20F 12/21F Revenue (Wbn) 53,084 60,655 64,978 66,888 69,501 73,122 Jaekwang Rhee +822 -3774 -6022 OP (Wbn) 2,844 4,622 5,543 4,620 4,703 4,796 [email protected] OP margin (%) 5.4 7.6 8.5 6.9 6.8 6.6 NP (Wbn) 1,363 2,790 1,691 2,862 2,928 2,991

EPS (W) 15,637 32,001 19,391 32,825 33,578 34,302 ROE (%) 3.3 6.5 3.9 6.5 6.3 6.2 P/E (x) 16.5 10.4 12.5 7.9 7.7 7.5

P/B (x) 0.5 0.6 0.5 0.5 0.5 0.4 Dividend yield (%) 3.1 2.4 4.1 4.3 4.3 4.3 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

LG Display (034220 KS ) Too early to throw in the towel

Technology Maintain Buy and TP of W26,500 Results Comment We reaffirm our Buy rating and target price of W26,500 on LG Display (LGD). From April 25, 2019 January 2015 to March 2018, LGD fetched a 30% premium on average to its Taiwanese rival, AU Optronics (AUO). Since then, however, the stock has been trading at a discount to its competitors, mainly because of: 1) the company’s market share loss with a US customer, due to its OLED adoption; 2) cost pressures from increasing OLED spending; and 3) LCD overcapacity caused by the operation of G10.5 fabs in China. (Maintain) Buy However, we believe LGD deserves to trade at a premium to its peers (as it d id before Target Price (12M, W) 26,500 March 2018), given several factors: 1) Expectations remain on the company’s supplies to its US customer later this year, while 2) OLED spending is set to decline in 2020. 3) Share Price (04/24/19, W) 19,900 Furthermore, Chinese panel suppliers appear to be shifting their focus t o LCD profitability, with many demanding price hikes for panels that have reached cash cost Expected Return 33% levels, rather than continuing to engage in a game of chicken through unit growth.

1Q19 review: Operating loss in line with our estimate; 2Q19 to mark bottom OP (19F, Wbn) -217 For 1Q19, LGD reported revenue of W5.9tr (+3.6% YoY, -15.4% QoQ) and an operating Consensus OP (19F, Wbn) 45 loss of W132bn (remaining in red YoY; turning to red QoQ), in line with our expectations. Shipment area contracted 11.3% QoQ on seasonal weakness, while ASP EPS Growth (19F, %) - fell 5.6% as a re sult of the continued decline in panel prices. SG&A expense ratio also Market EPS Growth (19F, %) -16.3 increased to 13%, caused by higher expenses related to customer adoption of POLED. P/E (19F, x) - Market P/E (19F, x) 11.9 We expect sluggish earnings to continue through 2Q19, with revenue of W5.9tr (+6% KOSPI 2,201.03 YoY, +1.2% QoQ) and an operating loss of W295bn (remaining in red YoY and QoQ). Revenue should be supported by a favorable US$/W rate and higher TV panel prices, Market Cap (Wbn) 7,121 but POLED-related expense pressures should continue to weigh on profits. We expect Shares Outstanding (mn) 358 the company to turn a profit fr om 3Q19, helped by the normalization of the OLED Free Float (%) 62.1 business and seasonal strength in LCD. Foreign Ownership (%) 26.8 Beta (12M) 1.13 OLED TV: Rerun of 1H17 52-Week Low 15,850 We expect strong sales of OLED TVs, driven by similar industry dynamics to those seen 52-Week High 24,750 in 1H17. At the time, OLED TV sales increased sharply, as: 1) rising LCD panel prices limited LCD TV promotions; while 2) a twofold increase YoY in OLED panel shipments (%) 1M 6M 12M allowed for OLED TV promotions. During that period, LGD’s market share in the high- Absolute -4.3 15.7 -19.6 end OLED space expanded materially to 58%. We expect similar dynamics to unfold in Relative -4.9 10.3 -10.0 2H19. Recently, LCD panel prices have reversed their downward trend, and LGD’s OLED panel supplies are likely to increase following the operation of its new Guangzhou fab. 110 LG Display KOSPI 100 As the price gap between LCD TVs and OLED TVs narrows, we expe ct the company to 90 gain share in the high-end OLED TV market. We forecast OLED TV panel operating 80 profit to grow from W123bn in 2019 to W235bn in 2020 70 60 50 4.18 8.18 12.18 4.19

Mirae Asset Daewoo Co., Ltd.

[ Display/Batteries ] FY (12) 12/15 12/16 12/17 12/18 12/19F 12/20F Revenue (Wbn) 28,384 26,504 27,790 24,337 25,001 26,824 Chuljoong Kim +822 -3774 -1464 OP (Wbn) 1,626 1,311 2,462 93 -217 902 [email protected] OP margin (%) 5.7 4.9 8.9 0.4 -0.9 3.4

NP (Wbn) 967 907 1,803 -207 -289 318 EPS (W) 2,701 2,534 5,038 -579 -807 889 ROE (%) 8.2 7.2 13.2 -1.5 -2.1 2.3

P/E (x) 9.1 12.4 5.9 - - 22.4 P/B (x) 0.7 0.9 0.7 0.5 0.5 0.5 Dividend yield (%) 2.0 1.6 1.7 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