Jeju Air (089590 KS ) Three key points to watch

Airlines 2Q19 preview: Lower load factor and yield to result in operating loss of W23.1bn Company Report For 2Q19, we forecast Jeju Air’s revenue to come in at W293.4bn (+3.6% YoY). In the July 10, 2019 international segment, we estimate traffic expanded 18.5% YoY on the back of increased capacity (+28.2% YoY). However, we believe revenue growth was tempered by a 9.1% YoY decline in yield. We believe traffic (-6.6% YoY) and yield (-3.3% YoY) were also sluggish in the domestic segment. (Maintain) Buy At the operating level, we expect a loss of W23.1bn, which is below the market consensus (breakeven). We believe the biggest drag on earnings was a fall in load Target Price (12M, W) ▼ 40,000 factor (81.9%; -6.7%p YoY) and a resulting decline in yield. We attribute the load factor decline to weakness in international flights out of regional airports (Daegu/Muan), Share Price (07/09/19, W) 29,000 where the airline expanded capacity. Earnings were likely further weighed down by co st pressures from higher oil prices and Expected Return 38% won depreciation. We estimate fuel costs increased 27% YoY and other costs (airport- related costs, maintenance, etc.) also rose nearly 10% YoY. As a result of the operating

loss, we expect the carrier to swing to a n et loss of W20.1bn (vs. net profit of W16.8bn OP (19F, Wbn) 99 in 2Q18). Consensus OP (19F, Wbn) 132 Key points to watch: Market share, Japan, and M&A EPS Growth (19F, %) -5.6 1) Market share: Jeju Air’s market share in the short-haul international segment has Market EPS Growth (19F, %) -23.6 recently expanded to 10.8%, nearing the 10.9% record set in March 2019. We expect P/E (19F, x) 11.4 market share gains to continue, helped by new flight and capacity restrictions on a rival Market P/E (19F, x) 12.2 LCC. While Jeju Air’s fleet expansion is currently acting as a drag on earnings, we KOSPI 2,052.03 believe it will help the carrier strengthen its market position in the long term.

Market Cap (Wbn) 764 2) Japan routes: There are growing worries that demand on Japan routes will soften Shares Outstanding (mn) 26 amid the recent political row. Any decline in demand in 2H19 is unlikely to be Free Float (%) 33.0 significant, given the low base of comparison related to last year’s n atural disasters (earthquakes and floods). That said, if tensions become protracted, we believe Jeju Air Foreign Ownership (%) 8.6 will need to adjust its routes (diverting routes from Japan to Southeast Asia or China) Beta (12M) 1.23 and improve its fleet efficiency. 52-Week Low 28,800 52-Week High 46,400 3) M&A: The growing likel ihood of AK Group’s participation in the bid for (020560 KS/Hold/CP: W6,020) is drawing increasing attention to how the deal (%) 1M 6M 12M could affect Jeju Air. The move could lead to lesser competition and a stronger market Absolute -21.2 -14.7 -31.3 position, but could also rai se financial risks. We believe whether the deal is beneficial Relative -20.4 -14.2 -23.5 will ultimately depend on 1) the acquisition price, 2) ownership structure and restructuring plans, and 3) FSC-LCC synergies.

120 Jeju Air KOSPI 110 Cut TP to W40,000, but maintain Buy 100 We are cutting our target price on Jeju Air from W50,000 to W40,000 in light of sluggish 90 earnings. We maintain our Buy rating, as our target price still implies 38% upside 80 potential. The stock has retreated 31% from its April peak (vs. -9% for the KOSPI) on 70 worries about margins and is now trading at a P/E of 11x. With the carrier likely to 60 expand its market position over the long term, we continue to believe investors should 7.18 11.18 3.19 7.19 overweight the stock.

Mirae Asset Daewoo Co., Ltd.

[ Transport/Energy ] FY (Dec.) 12/16 12/17 12/18 12/19F 12/20F 12/21F Revenue (Wbn) 748 996 1,259 1,480 1,685 1,883 Jay JH Ryu +822 -3774 -1738 OP (Wbn) 58 101 101 99 123 159 [email protected] OP Margin (%) 7.8 10.1 8.0 6.7 7.3 8.4

NP (Wbn) 53 78 71 67 81 110 EPS (W) 2,038 2,954 2,689 2,537 3,087 4,187 ROE (%) 19.5 25.8 19.9 16.4 17.5 20.2

P/E (x) 12.3 12.0 12.5 11.4 9.4 6.9 P/B (x) 2.4 2.8 2.3 1.8 1.5 1.3 Dividend Yield (%) 2.0 1.7 1.9 1.7 2.6 2.8 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

July 10, 2019 Jeju Air

Table 1. 2Q19 preview (Wbn, %, %p) 2Q19F Growth 2Q18 1Q19 Mirae Asset Consensus YoY QoQ Daewoo Revenue 283 393 293 332 3.6 -25.3 Operating profit 12 57 -23 0 TTR TTR OP margin (%) 4.1 14.5 -7.9 0.0 TTR TTR Pretax profit 22 55 -26 -11 TTR TTR Net profit 17 42 -20 -14 TTR TTR Note: Based on consolidated K-IFRS; net profit is attributable to controlling interests Source: WISEfn, company data, Mirae Asset Daewoo Research estimates

Table 2. Earnings forecast revisions (Wbn, %) Previous Revised % chg. Notes 19F 20F 19F 20F 19F 20F Revenue 1,543 1,740 1,480 1,685 -4.0 -3.1 L/F and yield forecast downgrades Revenue forecast downgrade s; upward Operating profit 156 172 99 123 -36.9 -28.5 F/X rate forecast revision Pretax profit 127 162 87 106 -31.3 -34.8 OP forecast downgrades Net profit 97 124 67 81 -31.2 -34.6 Notes: Based on consolidated K-IFRS; net profit refers to net profit attributable to controlling interests Source: Mirae Asset Daewoo Research estimates

Table 3. Quarterly and annual earnings (Wbn, %) 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19F 3Q19F 4Q19F 2018 2019F 2020F Revenue 309 283 350 317 393 293 411 382 1,259 1,480 1,685 -Domestic 47 63 60 54 49 61 62 56 224 228 229 -International 244 202 264 234 315 212 319 291 943 1,137 1,328 -Other 18 18 27 29 29 21 31 35 92 115 129 Operating profit 46 12 38 5 57 -23 49 16 101 99 123 Pretax profit 48 22 41 -17 55 -26 45 13 93 87 106 Net profit (controlling) 37 17 31 -14 42 -20 35 10 71 67 81 OP margin (%) 15.0 4.1 10.8 1.7 14.5 -7.9 11.8 4.2 8.0 6.7 7.3 Pretax margin (%) 15.5 7.8 11.7 -5.5 14.1 -8.9 10.9 3.5 7.4 5.9 6.3 Net margin (%) 12.0 5.9 8.9 -4.4 10.7 -6.9 8.4 2.7 5.6 4.5 4.8 International RPK (%, YoY) 24.9 32.7 30.8 31.2 30.9 18.5 20.8 19.3 29.9 22.3 18.5 International ASK (%, YoY) 22.9 30.0 35.2 37.2 34.0 28.2 23.3 19.8 31.5 25.9 15.0 International L/F (%, YoY) 90.2 87.6 86.8 84.4 88.2 81.0 85.0 84.0 87.1 84.6 87.1 International yield (%, YoY) 13.4 1.2 10.2 -3.0 -0.2 -9.1 -7.0 -5.0 5.5 -5.1 -3.3 Domestic RPK (%, YoY) 6.8 3.9 -1.2 1.7 3.8 -6.6 -4.1 -3.5 2.6 -2.7 -1.5 Domestic ASK (%, YoY) 8.1 4.3 1.6 3.9 2.3 -1.0 -0.7 -0.7 4.4 -0.1 -1.0 Domestic L/F (%, YoY) 93.7 95.4 93.2 93.6 95.1 90.0 90.0 91.0 94.0 91.5 91.0 Domestic yield (%, YoY) 6.5 6.2 2.4 1.9 3.1 -3.3 -2.0 0.0 4.2 -0.7 0.0 Jet fuel (US$/bbl) 79 85 89 85 77 80 81 81 84 80 81 Notes: Based on consolidated K-IFRS; net profit refers to net profit attributable to controlling interests Source: Company data, Mirae Asset Daewoo Research estimates

Mirae Asset Daewoo Research 2 July 10, 2019 Jeju Air

Table 4. Valuation: RIM (Wbn) 2018 2019F 2020F 2021F 2022F 2023F 2024F Revenue 1,259 1,480 1,685 1,883 1,883 2,077 2,402 (Growth) 26.4% 17.5% 13.9% 11.7% 0.0% 10.3% 15.6% Net profit 71 115 137 146 170 194 214 (% of revenue) 5.6% 9.7% 10.0% 9.5% 9.5% 9.5% 9.2% Equity (ex-minority interest) 382 421 534 654 801 981 1,202 (Growth) 15.4% 26.9% 27.0% 22.5% 22.5% 22.5% 22.5% ROE forecast 25.8% 30.6% 28.7% 24.6% 23.3% 21.7% 19.6% Cost of equity 8.2% 8.2% 8.2% 8.2% 8.2% 8.2% 8.2% ROE spread 19.9% 8.2% 9.3% 12.1% 9.2% 9.1% 7.8% Residual income 76 36 46 71 62 71 69 Terminal value 502 NPV of FCFF 396 PV of terminal value 229 Current book value 3,871 Equity value 1,050 Shares outstanding 26,357 Target price (W) 40,000 Current price (W) 29,050 Source: Mirae Asset Daewoo Research

Figure 1. P/E band

(W) 80,000

70,000

60,000 20.0x 17.5x 50,000 15.0x 40,000 12.5x

30,000 10.0x

20,000

10,000

0 17 18 19 20

Source: Company data, Mirae Asset Daewoo Research estimates

Mirae Asset Daewoo Research 3 July 10, 2019 Jeju Air

Figure 2. Jet fuel price trend Figure 3. US$/W rate trend

(US$/bbl) 1,300 140 Jet fuel price 1,250 120

100 1,200

80 1,150

60 1,100 40 1,050 20

0 1,000 14 15 16 17 18 19 15 16 17 18 19

Source: Bloomberg, Mirae Asset Daewoo Research Source: Bloomberg, Mirae Asset Daewoo Research

Figure 4. Revenue by route Figure 5. Ancillary revenue trends

(Wbn) (Wbn) (%) 400 Irregular Russia Oceania 30 Ticket-related (L) Commissions (L) 12 Southeast Asia China Japan % of revenue (R) 350 Domestic 25 10 300 20 8 250

200 15 6

150 10 4 100 5 2 50

0 0 0 1Q16 3Q16 1Q17 3Q17 1Q18 3Q18 1Q19 1Q16 3Q16 1Q17 3Q17 1Q18 3Q18 1Q19

Source: Company data, Mirae Asset Daewoo Research Source: Company data, Mirae Asset Daewoo Research

Figure 6. Korean LCCs’ M/S on short-haul international routes Figure 7. CASK trends

(%) (W/ASK) 12 80 CASK CASK (ex-fuel costs) 10 Jeju Air 70 T'way Air 8 60

6 50

4 40

2 30

0 20 11 12 13 14 15 16 17 18 19 1Q14 1Q15 1Q16 1Q17 1Q18 1Q19 Source: IIA, KAC, Mirae Asset Daewoo Research Source: Company data, Mirae Asset Daewoo Research estimates

Mirae Asset Daewoo Research 4 July 10, 2019 Jeju Air

Jeju Air (089590 KS/Buy/TP: W40,000)

Comprehensive Income Statement (Summarized) Statement of Financial Condition (Summarized) (Wbn) 12/18 12/19F 12/20F 12/21F (Wbn) 12/18 12/19F 12/20F 12/21F Revenue 1,259 1,480 1,685 1,883 Current Assets 478 669 949 1,158 Cost of Sales 1,016 1,223 1,383 1,526 Cash and Cash Equivalents 223 245 496 678 Gross Profit 243 257 302 357 AR & Other Receivables 59 71 82 92 SG&A Expenses 143 158 179 198 Inventories 12 14 16 18 Operating Profit (Adj) 101 99 123 159 Other Current Assets 184 339 355 370 Operating Profit 101 99 123 159 Non-Current Assets 553 917 895 883 Non-Operating Profit -8 -12 -17 -16 Investments in Associates 0 0 0 0 Net Financial Income 3 -21 -17 -16 Property, Plant and Equipment 331 263 246 237 Net Gain from Inv in Associates 0 0 0 0 Intangible Assets 24 18 13 10 Pretax Profit 93 87 106 143 Total Assets 1,032 1,585 1,844 2,041 Income Tax 22 21 24 33 Current Liabilities 403 566 638 704 Profit from Continuing Operations 71 67 81 110 AP & Other Payables 86 104 120 135 Profit from Discontinued Operations 0 0 0 0 Short-Term Financial Liabilities 25 111 111 111 Net Profit 71 67 81 110 Other Current Liabilities 292 351 407 458 Controlling Interests 71 67 81 110 Non-Current Liabilities 246 588 706 746 Non-Controlling Interests 0 0 0 0 Long-Term Financial Liabilities 101 414 504 519 Total Comprehensive Profit 65 67 81 110 Other Non-Current Liabilities 145 174 202 227 Controlling Interests 65 67 81 110 Total Liabilities 649 1,154 1,344 1,450 Non-Controlling Interests 0 0 0 0 Controlling Interests 382 432 500 591 EBITDA 137 236 244 271 Capital Stock 132 132 132 132 FCF (Free Cash Flow) -32 160 176 189 Capital Surplus 90 90 90 90 EBITDA Margin (%) 10.9 15.9 14.5 14.4 Retained Earnings 163 213 281 371 Operating Profit Margin (%) 8.0 6.7 7.3 8.4 Non-Controlling Interests 0 0 0 0 Net Profit Margin (%) 5.6 4.5 4.8 5.8 Stockholders' Equity 382 432 500 591

Cash Flows (Summarized) Forecasts/Valuations (Summarized) (Wbn) 12/18 12/19F 12/20F 12/21F 12/18 12/19F 12/20F 12/21F Cash Flows from Op Activities 121 246 276 289 P/E (x) 12.5 11.4 9.4 6.9 Net Profit 71 67 81 110 P/CF (x) 6.2 3.2 3.1 2.8 Non-Cash Income and Expense 73 174 163 161 P/B (x) 2.3 1.8 1.5 1.3 Depreciation 29 131 117 109 EV/EBITDA (x) 4.9 3.4 2.6 1.7 Amortization 7 7 5 3 EPS (W) 2,689 2,537 3,087 4,187 Others 37 36 41 49 CFPS (W) 5,445 9,155 9,262 10,298 Chg in Working Capital 9 37 73 66 BPS (W) 14,582 16,472 19,060 22,499 Chg in AR & Other Receivables -12 0 -9 -8 DPS (W) 650 500 750 800 Chg in Inventories -2 -2 -2 -2 Payout ratio (%) 24.1 19.7 24.2 19.1 Chg in AP & Other Payables 24 9 0 0 Dividend Yield (%) 1.9 1.7 2.6 2.8 Income Tax Paid -33 -10 -24 -33 Revenue Growth (%) 26.4 17.6 13.9 11.8 Cash Flows from Inv Activities -6 -222 -102 -102 EBITDA Growth (%) 7.9 72.3 3.4 11.1 Chg in PP&E -153 -87 -100 -100 Operating Profit Growth (%) 0.0 -2.0 24.2 29.3 Chg in Intangible Assets -7 0 0 0 EPS Growth (%) -9.0 -5.7 21.7 35.6 Chg in Financial Assets 242 -2 -2 -2 Accounts Receivable Turnover (x) 32.7 30.1 29.1 28.4 Others -88 -133 0 0 Inventory Turnover (x) 120.4 116.2 112.1 109.8 Cash Flows from Fin Activities 5 -8 77 -5 Accounts Payable Turnover (x) 2,194.7 1,243.8 1,191.9 1,152.0 Chg in Financial Liabilities 69 397 90 15 ROA (%) 7.7 5.1 4.7 5.7 Chg in Equity 0 0 0 0 ROE (%) 19.9 16.4 17.5 20.2 Dividends Paid -16 0 -13 -20 ROIC (%) 36.1 16.7 16.3 23.6 Others -48 -405 0 0 Liability to Equity Ratio (%) 169.8 267.2 268.9 245.6 Increase (Decrease) in Cash 119 22 251 182 Current Ratio (%) 118.6 118.2 148.6 164.4 Beginning Balance 104 223 245 496 Net Debt to Equity Ratio (%) -54.6 6.3 -27.1 -51.6 Ending Balance 223 245 496 678 Interest Coverage Ratio (x) 67.8 3.4 4.7 5.6 Source: Company data, Mirae Asset Daewoo Research estimates

Mirae Asset Daewoo Research 5 July 10, 2019 Jeju Air

APPENDIX 1

Important Disclosures & Disclaimers 2-Year Rating and Target Price History

Company (Code) Date Rating Target Price (W) Jeju Air Jeju Air (089590) 07/09/2019 Buy 40,000 80,000 05/07/2019 Buy 50,000 04/05/2019 Buy 47,000 60,000 01/14/2019 Buy 45,000 11/06/2018 Buy 50,000 40,000 08/07/2018 Buy 60,000 20,000 06/21/2018 Buy 62,000

05/08/2018 Buy 65,000 0 04/06/2018 Buy 60,000 Jul 17 Jul 18 Jul 19 02/06/2018 Buy 52,000 06/20/2017 Buy 50,000

Stock Ratings Industry Ratings Buy : Relative performance of 20% or greater Overweight : Fundamentals are favorable or improving Trading Buy : Relative performance of 10% or greater, but with volatility Neutral : Fundamentals are steady without any material changes Hold : Relative performance of -10% and 10% Underweight : Fundamentals are unfavorable or worsening Sell : Relative performance of -10% Ratings and Target Price History (Share price (─), Target price (▬), Not covered ( ■), Buy (▲), Trading Buy (■), Hold (●), Sell ( ◆)) * Our investment rating is a guide to the relative return of the stock versus the market over the next 12 months. * Although it is not part of the official ratings at Mirae Asset Daewoo Co., Ltd., we may call a trading opportunity in case there is a technical or short-term material development. * The target price was determined by the research analyst through valuation methods discussed in this report, in part based on the analyst’s estimate of future earnings. * The achievement of the target price may be impeded by risks related to the subject securities and companies, as well as general market and economic conditions.

Equity Ratings Distribution & Investment Banking Services Buy Trading Buy Hold Sell Equity Ratings Distribution 83.14% 8.72% 8.14% 0.00% Investment Banking Services 77.78% 11.11% 11.11% 0.00% * Based on recommendations in the last 12-months (as of June 30, 2019)

Disclosures As of the publication date, Mirae Asset Daewoo Co., Ltd. and/or its affiliates do not have any special interest with the subject company and do not own 1% or more of the subject company's shares outstanding.

Analyst Certification The research analysts who prepared this report (the “Analysts”) are registered with the Korea Financial Investment Association and are subject to Korean securities regulations. They are neither registered as research analysts in any other jurisdiction nor subject to the laws or regulations thereof. Each Analyst responsible for the preparation of this report certifies that (i) all views expressed in this report accurately reflect the personal views of the Analyst about any and all of the issuers and securities named in this report and (ii) no part of the compensation of the Analyst was, is, or will be directly or indirectly related to the specific recommendations or views contained in this report. Mirae Asset Daewoo Co., Ltd. (“Mirae Asset Daewoo”) policy prohibits its Analysts and members of their households from owning securities of any company in the Analyst’s area of coverage, and the Analysts do not serve as an officer, director or advisory board member of the subject companies. Except as otherwise specified herein, the Analysts have not received any compensation or any other benefits from the subject companies in the past 12 months and have not been promised the same in connection with this report. Like all employees of Mirae Asset Daewoo, the Analysts receive compensation that is determined by overall firm profitability, which includes revenues from, among other business units, the institutional equities, investment banking, proprietary trading and private client division. At the time of publication of this report, the Analysts do not know or have reason to know of any actual, material conflict of interest of the Analyst or Mirae Asset Daewoo except as otherwise stated herein.

Disclaimers This report was prepared by Mirae Asset Daewoo, a broker-dealer registered in the Republic of Korea and a member of the Korea Exchange. Information and opinions contained herein have been compiled in good faith and from sources believed to be reliable, but such information has not been independently verified and Mirae Asset Daewoo makes no guarantee, representation or warranty, express or implied, as to the fairness, accuracy, completeness or correctness of the information and opinions contained herein or of any translation into English from the . In case of an English translation of a report prepared in the Korean language, the original Korean language report may have been made available to investors in advance of this report. The intended recipients of this report are sophisticated institutional investors who have substantial knowledge of the local business environment, its common practices, laws and accounting principles and no person whose receipt or use of this report would violate any laws or regulations or subject Mirae Asset Daewoo or any of its affiliates to registration or licensing requirements in any jurisdiction shall receive or make any use hereof. This report is for general information purposes only and it is not and shall not be construed as an offer or a solicitation of an offer to effect transactions in any securities or other financial instruments. The report does not constitute investment advice to any person and such person shall not be treated as a

Mirae Asset Daewoo Research 6 July 10, 2019 Jeju Air

client of Mirae Asset Daewoo by virtue of receiving this report. This report does not take into account the particular investment objectives, financial situations, or needs of individual clients. The report is not to be relied upon in substitution for the exercise of independent judgment. Information and opinions contained herein are as of the date hereof and are subject to change without notice. The price and value of the investments referred to in this report and the income from them may depreciate or appreciate, and investors may incur losses on investments. Past performance is not a guide to future performance. Future returns are not guaranteed, and a loss of original capital may occur. Mirae Asset Daewoo, its affiliates and their directors, officers, employees and agents do not accept any liability for any loss arising out of the use hereof. Mirae Asset Daewoo may have issued other reports that are inconsistent with, and reach different conclusions from, the opinions presented in this report. The reports may reflect different assumptions, views and analytical methods of the analysts who prepared them. Mirae Asset Daewoo may make investment decisions that are inconsistent with the opinions and views expressed in this research report. Mirae Asset Daewoo, its affiliates and their directors, officers, employees and agents may have long or short positions in any of the subject securities at any time and may make a purchase or sale, or offer to make a purchase or sale, of any such securities or other financial instruments from time to time in the open market or otherwise, in each case either as principals or agents. Mirae Asset Daewoo and its affiliates may have had, or may be expecting to enter into, business relationships with the subject companies to provide investment banking, market-making or other financial services as are permitted under applicable laws and regulations. No part of this document may be copied or reproduced in any manner or form or redistributed or published, in whole or in part, without the prior written consent of Mirae Asset Daewoo.

Distribution United Kingdom: This report is being distributed by Mirae Asset Securities (UK) Ltd. in the United Kingdom only to (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”), and (ii) high net worth companies and other persons to whom it may lawfully be communicated, falling within Article 49(2)(A) to (E) of the Order (all such persons together being referred to as “Relevant Persons”). This report is directed only at Relevant Persons. Any person who is not a Relevant Person should not act or rely on this report or any of its contents. United States: Mirae Asset Daewoo is not a registered broker-dealer in the United States and, therefore, is not subject to U.S. rules regarding the preparation of research reports and the independence of research analysts. This report is distributed in the U.S. by Mirae Asset Securities (USA) Inc., a member of FINRA/SIPC, to “major U.S. institutional investors” in reliance on the exemption from registration provided by Rule 15a-6(b)(4) under the U.S. Securities Exchange Act of 1934, as amended. All U.S. persons that receive this document by their acceptance hereof represent and warrant that they are a major U.S. institutional investor and have not received this report under any express or implied understanding that they will direct commission income to Mirae Asset Daewoo or its affiliates. Any U.S. recipient of this document wishing to effect a transaction in any securities discussed herein should contact and place orders with Mirae Asset Securities (USA) Inc. Mirae Asset Securities (USA) Inc. accepts responsibility for the contents of this report in the U.S., subject to the terms hereof, to the extent that it is delivered to a U.S. person other than a major U.S. institutional investor. Under no circumstances should any recipient of this research report effect any transaction to buy or sell securities or related financial instruments through Mirae Asset Daewoo. The securities described in this report may not have been registered under the U.S. Securities Act of 1933, as amended, and, in such case, may not be offered or sold in the U.S. or to U.S. persons absent registration or an applicable exemption from the registration requirements. Hong Kong: This report is distributed in Hong Kong by Mirae Asset Securities (HK) Limited, which is regulated by the Hong Kong Securities and Futures Commission. The contents of this report have not been reviewed by any regulatory authority in Hong Kong. This report is for distribution only to professional investors within the meaning of Part I of Schedule 1 to the Securities and Futures Ordinance of Hong Kong (Cap. 571, Laws of Hong Kong) and any rules made thereunder and may not be redistributed in whole or in part in Hong Kong to any person. All Other Jurisdictions: Customers in all other countries who wish to effect a transaction in any securities referenced in this report should contact Mirae Asset Daewoo or its affiliates only if distribution to or use by such customer of this report would not violate applicable laws and regulations and not subject Mirae Asset Daewoo and its affiliates to any registration or licensing requirement within such jurisdiction.

Mirae Asset Daewoo Research 7 July 10, 2019 Jeju Air

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Mirae Asset Daewoo Research 8