July 22, 2019 Korea Morning Focus

Company News & Analysis Major Indices Close Chg Chg (%) (055550/Buy/TP: W60,000) KOSPI 2,094.36 27.81 1.35 Key strength lies in business portfolio and risk management KOSPI 200 274.55 3.88 1.43 KOSDAQ 674.06 8.91 1.34

Sector News & Analysis Turnover ('000 shares, Wbn) Media (Overweight) Volume Value Both CJ ENM and have sold off, but CJ ENM will be the first to KOSPI 386,118 4,198 KOSPI 200 85,703 2,956 rebound KOSDAQ 743,056 3,950

Market Cap (Wbn) Economy & Strategy Update Value BOK Monitor KOSPI 1,396,345 A timely rate cut; Additional rate cuts unlikely in the near future KOSDAQ 231,950

KOSPI Turnover (Wbn) Buy Sell Net Foreign 1,243 1,112 131 Institutional 1,169 831 338 Retail 1,719 2,183 -463

KOSDAQ Turnover (Wbn) Buy Sell Net Foreign 364 385 -21 Institutional 186 167 19 Retail 3,383 3,380 3

Program Buy / Sell (Wbn) Buy Sell Net KOSPI 1,099 876 224 KOSDAQ 324 352 -27

Advances & Declines Advances Declines Unchanged KOSPI 661 183 51 KOSDAQ 880 331 79

KOSPI Top 5 Most Active Stocks by Value (Wbn) Price (W) Chg (W) Value Electronics 46,800 700 373 Foosung 10,700 -450 286 KODEX Leverage 12,410 355 259 Hynix 76,800 2,100 200 KODEX 200 Futures 7,340 -225 178 Inverse 2X

KOSDAQ Top 5 Most Active Stocks by Value (Wbn) Price (W) Chg (W) Value Kukil Paper 4,430 560 180 Dongjin Semichem 15,800 200 134 Soulbrain 66,000 -3,000 116 A-Jin Industry 3,310 -40 109 CMG Pharm. 3,190 330 108 Note: As of July 19, 2019

This document is a summary of a report prepared by Mirae Asset Daewoo Co., Ltd. (“Mirae Asset 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. 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.

Shinhan Financial Group (055550 KS) Key strength lies in business portfolio and risk management Banks Steady profit growth over the past five years + inorganic growth momentum Company Report Shinhan Financial Group (SFG) has recorded steady net profit growth since 2013, which we largely attribute to the earnings stability resulting from the group’s diversified July 19, 2019 business portfolio and strong risk management capabilities.

For financial (bank) holding companies, business diversification across banks and non- banks can be a major advantage that provides earnings stability during times of interest rate changes. While a decline in interest rates is negative to the net interest (Maintain) Buy margins (NIMs) of banks, and sentiment on the sector tends to be correlated to interest rate moves, lower interest rates can also drive non-interest income by Target Price (12M, W) 60,000 increasing fixed income-related gains and boosting commission income, including trust fees from the sale of equity-linked securities (ELS) and equity-linked trusts (ELT), Share Price (07/18/19, W) 45,250 and wealth management fees. As lenders, credit card and finance companies raise funds by issuing corporate debt or ABS. Therefore, a fall in interest rates leads to a fall in their funding costs, providing a cushion for group net interest income. In the case of Expected Return 33% SFG, the relatively high earnings exposure to its credit card subsidiary had been a source of concern due to regulatory headwinds (i.e., merchant fee cuts). However, we

believe the recent fall in interest rates and BOK rate cut are more positive than NP (19F, Wbn) 3,451 negative for credit card companies. From 2002 to 2007, SFG made a series of Consensus NP (19F, Wbn) 3,373 acquisitions, including Good Morning Securities, LG Card, and Chohung Bank. Following a 10-year break, the group purchased Orange Life Insurance and Asia Trust EPS Growth (19F, %) 9.3 in 2018. As such, we expect the group to see inorganic profit growth momentum. We Market EPS Growth (19F, %) -24.5 also project SFG’s bank subsidiary to generate robust earnings, supported by solid P/E (19F, x) 6.2 loan growth and stable SG&A expenses. Market P/E (19F, x) 12.4 W400bn share buyback underway KOSPI 2,066.55 On May 10th, SFG signed a trust agreement for a W400bn share buyback lasting from Market Cap (Wbn) 21,458 May 13th to November 13th (six months), 2019. Of the W400bn, the group has so far Shares Outstanding (mn) 492 bought back around W180bn worth of shares (as of July 17th). Further taking into Free Float (%) 80.8 account the previous W200bn share repurchase program announced on September th th Foreign Ownership (%) 67.0 5 , 2018 and completed on April 9 , 2019, SFG will own a total of W600bn worth of th Beta (12M) 0.55 treasury shares by November 13 , 2019. We believe SFG will use its treasury shares to acquire the remaining shares in Orange Life Insurance that it does not already own. If 52-Week Low 38,350 so, we expect net profit (attributable to controlling interests) to gain additional growth 52-Week High 48,000 momentum.

(%) 1M 6M 12M Earnings stability to stand out amid macro worries and falling interest rates Absolute -0.8 11.0 0.7 We are positive on SFG’s strategy to: 1) secure profit growth drivers and diversify its Relative 0.8 14.1 11.6 income base via M&As; 2) expand its global business by advancing into Vietnam, which 120 Shinhan Financial Group has higher growth/margin potential than the domestic market; and 3) strengthen its KOSPI capital market competitiveness in the domestic market. Despite macro worries and 110 falling interest rates, we believe SFG will display earnings stability on the back of its 100 diversified business portfolio and strong risk management capabilities. We maintain 90 our Buy rating and target price of W60,000 on SFG. 80

70 7.18 11.18 3.19 7.19

Mirae Asset Daewoo Co., Ltd. Fiscal year-end 12/16 12/17 12/18 12/19F 12/20F 12/21F Net interest inc. (Wbn) 7,205 7,843 8,580 9,767 10,100 10,496 [ Banks/Credit Cards] Net non-interest inc. (Wbn) 1,577 1,341 1,399 1,255 1,286 1,342 Operating profit (Wbn) 3,109 3,829 4,499 5,011 5,231 5,468 Heather Kang +822-3774-1903 Net profit (Wbn) 2,775 2,918 3,157 3,451 3,569 3,713 [email protected] EPS (W) 5,767 6,153 6,657 7,277 7,424 7,452

EPS growth (%) 18.2 6.7 8.2 9.3 2.0 0.4 P/E (x) 7.8 7.4 6.8 6.2 6.1 6.1 P/PPOP (x) 5.0 4.9 4.1 3.6 3.5 3.3

P/B (x) 0.69 0.65 0.60 0.56 0.54 0.51 ROE (%) 9.0 9.1 9.2 9.3 9.0 8.6 Dividend yield (%) 3.2 3.2 3.5 3.9 4.1 4.2 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

Analysts who prepared this report are registered as research analysts in Korea but not in any other jurisdiction, including the U.S. PLEASE SEE ANALYST CERTIFICATIONS AND IMPORTANT DISCLOSURES & DISCLAIMERS IN APPENDIX 1 AT THE END OF REPORT.

Media Both CJ ENM and Studio Dragon have sold off, but CJ ENM will be the first to rebound

Overweight (Maintain) Shares of CJ ENM and Studio Dragon have sold off The market values of CJ ENM and Studio Dragon currently remain below W4tr and Industry Report W2tr, respectively. For CJ ENM, that is the lowest level since the July 2018 merger; for July 22, 2019 Studio Dragon, that is the lowest level since the beginning of 2018. Their continued share price declines are attributable to 1) the sharp margin contraction seen in recent earnings results (4Q18 for Studio Dragon and 1Q19 for CJ ENM media) and 2) the poor performance of the much-anticipated , the most expensive drama Mirae Asset Daewoo Co., Ltd. ever made (W54bn). Given that ads and licensing for Arthdal Chronicles had been sold ahead of the drama’s airing, any impact on earnings is likely to be limited at both [Media] companies. However, there were high expectations that the drama would have spill-

Jeong-yeob Park over effects beyond ratings from the use of its intellectual property. From this +822-3774-1652 perspective, the drama’s initial weak showing has dimmed the prospects of potential [email protected] business expansion into other areas.

We believe the market’s perception of the drama has been fully reflected in the recent

“consolidation following pullback” pattern of both stocks. Looking ahead, any rebound in share prices will likely come after signs of a margin recovery emerge. The margin contraction seen during the two most recent quarters was driven by: 1) higher

production costs (both Studio Dragon and CJ ENM media); 2) lower broadcasting fee

rates (Studio Dragon); and 3) a seasonal mismatch between revenue and production costs (CJ ENM media). We thus believe these three issues will ultimately decide how both stocks will perform. 1) Higher production costs: In need of top-line triggers Production budgets have crept up year after year. We expect CJ ENM’s broadcasting production costs to rise to W570bn in 2019 (from W450bn in 2017 and W500bn in 2018). Studio Dragon internally expects its drama production costs to grow to W300bn in 2019 (from W230bn in 2017 and W270bn in 2018). Both companies need triggers that can drive top-line growth beyond those levels.

In the case of CJ ENM, media OP margin expands when the increase in ad/licensing revenue outweighs the increase in production costs, and vice versa. From 2011 to 2014, operating profit declined due to insufficient ad/licensing revenue growth. In 2015-16, ad revenue far outpaced production costs, leading to operating profit expansion. In 2017-18, operating profit grew on the back of strong licensing revenue. In 2019, ad/licensing revenue has been robust, but the rate of growth has slowed.

Studio Dragon’s OP margin expands when the increase in programming/licensing revenue outweighs the increase in production costs, and vice versa. For big-budget titles, broadcasting rates have recently fallen to 50% of total production costs from 70% previously, suggesting there is limited potential for programming revenue growth. This means licensing revenue needs to more than make up for the increase in production costs. While licensing revenue growth remains strong (2019F growth of 31.5% YoY), we believe it will not be enough to cover rising production costs and the increase in amortization expenses (2019F increase of W35bn YoY) caused by the reduction in useful life.

July 22, 2019 Media

Studio Dragon (253450 KQ) Wait for launch of OTT latecomers

Media 2Q19 preview: OP of W10.3bn For 2Q19, we forecast Studio Dragon to record consolidated revenue of W115.7bn (+55.7% YoY; all growth figures hereafter are YoY) and operating profit of W10.3bn (Maintain) Buy (+42.5%), with the latter being broadly in line with the consensus (W11bn). We believe licensing sales of major titles continued to be strong in the quarter. Target Price (12M, W) ▼ 87,000 Both programming and licensing revenue likely grew on the back of an increase in the Share Price (07/19/19, W) 67,500 number of titles produced (eight in 2Q19 vs. six in 2Q18) and higher production costs per title. We believe the company made a slight profit on Arthdal Chronicles (season 1, 18 Expected Return 29% episodes) and recognized 10 episodes in 2Q19. Major global licensing content in the quarter likely included Spring Night, Abyss, and Possessed.

OP (19F, Wbn) 50 Consensus OP (19F, Wbn) 54 Pricing power over global OTTs to begin to strengthen in 2020 The average broadcasting rate paid by CJ ENM to Studio Dragon has trended lower (from EPS Growth (19F, %) 6.1 70% in 2017 to 62% in 2019F) amid rising production costs due to the more rigid nature Market EPS Growth (19F, %) -24.4 of ad revenue compared to production costs. In other words, Studio Dragon has been P/E (19F, x) 49.8 bearing the brunt of rigid ad revenues and rising production costs. The resulting margin Market P/E (19F, x) 12.6 squeeze, together with the disappointing ratings of Arthdal Chronicles, has been the KOSDAQ 674.06 primary cause behind the stock’s recent decline.

Market Cap (Wbn) 1,893 For margins to recover, the company needs to raise licensing prices again. We believe Shares Outstanding (mn) 28 domestic drama content pricing (as a percentage of production costs) historically peaked Free Float (%) 25.2 when the drama Mr. Sunshine came out in July 2018. Looking ahead, we expect to see a Foreign Ownership (%) 2.5 structural price increase from 2020, as the launch of OTT platforms by latecomers like Beta (12M) 1.30 Disney is likely to reignite the battle for content. As a result, production companies such 52-Week Low 66,000 as Studio Dragon should enjoy greater pricing power. ’s surprise 2Q19 net 52-Week High 116,300 subscriber loss in the US could also intensify competition among OTTs to attract international subscribers. (%) 1M 6M 12M Absolute -6.3 -24.4 -36.3 Maintain Buy, but cut TP to W87,000 Relative -0.2 -21.9 -24.8 We maintain our Buy rating on Studio Dragon but cut our target price to W87,000, which

120 Studio Dragon KOSDAQ is based on a P/E of 40x our 2020F net profit attributable to controlling interests. Our

100 target multiple represents a 10% discount to the stock’s historical trough multiple (45x) prior to the broadcasting of Arthdal Chronicles. 80 While Studio Dragon’s stock has sharply pulled back following the airing of Arthdal 60 Chronicles, its follow-up drama has gained positive receptions at home

40 and abroad, once again proving the company’s strong content competitiveness. And 7.18 11.18 3.19 7.19 although it may take some time to see a pricing increase (likely in 2020), we are encouraged by Studio Dragon’s ongoing efforts to diversify its licensing platforms beyond Netflix (Hotel Del Luna) and broaden its IP income model into remake rights and games.

메일@ miraeasset.com FY (Dec.) 12/15 12/16 12/17 12/18 12/19F 12/20F Revenue (Wbn) 0 0 287 380 501 588 OP (Wbn) 0 0 33 40 50 81 OP margin (%) - - 11.5 10.5 10.0 13.8 NP (Wbn) 0 0 24 36 38 61 EPS (W) 0 0 1,050 1,278 1,356 2,179 ROE (%) 0.0 0.0 12.9 9.3 9.1 13.0 P/E (x) - - 61.9 72.3 49.8 31.0 P/B (x) - - 4.9 6.5 4.3 3.8 Dividend yield (%) - - 0.0 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

Mirae Asset Daewoo Research 2 July 22, 2019 Media

CJ ENM (035760 KQ) Media margins to pick up on peak-season effects

Media 2Q19 preview: OP of W92.7bn For 2Q19, we project CJ ENM to record consolidated revenue of W1.17tr (+12.0%) and (Maintain) operating profit of W92.7bn (+17.1%). We expect operating profit to come largely in line Buy with the consensus (W89.7bn), supported by a margin recovery in media and robust film earnings. In 1Q19, OP margin fell sharply due to a combination of seasonal weakness Target Price (12M, W) ▼ 260,000 and higher expenses in media. In 2Q19, we believe the media business benefited from peak-season leverage effects. Share Price (07/19/19, W) 174,500 We forecast media operating profit at W32.8bn (+12.3%). TV ads (+16%) and digital ads (+40%) likely continued robust growth in 2Q19, backed by strong content Expected Return 49% competitiveness and new media. We believe 1) ad rates for Arthdal Chronicles reached the previous ad rate record (W20.7mn per 15 seconds); 2) digital ads (YouTube, etc.) continued to grow; and 3) licensing sales were recorded for major titles, including Abyss, OP (19F, Wbn) 350 One Spring Night, and Arthdal Chronicles. We forecast film operating profit at W8.4bn Consensus OP (19F, Wbn) 355 (turning to profit). Tentpole title Parasite was a box-office hit, attracting more than 10mn admissions. Parasite’s overseas sales could serve as a potential surprise, as the movie EPS Growth (19F, %) -14.6 was sold to 192 countries, the highest number on record for a domestic film. Elsewhere, Market EPS Growth (19F, %) -24.4 our operating profit estimates are W35.1bn for commerce, W15.4bn for CJ Hello, and W1.6bn for music. P/E (19F, x) 17.7 Market P/E (19F, x) 12.6 KOSDAQ 674.06 Media and music remain key investment points Looking to 2H19, we expect media profits to improve, as ad revenue should grow (+11% Market Cap (Wbn) 3,827 for TV and +27% for digital), and production costs should be kept within the company’s Shares Outstanding (mn) 22 original guidance (W570bn). TV and digital ad revenue are showing no signs of slowing. TV ad rates for prime-time shows remain at previous highs, while TV ad rates for second- Free Float (%) 46.8 tier channels and for individual time slots are also on the rise. Meanwhile, digital TV ads Foreign Ownership (%) 17.9 continue to be supported by the use of YouTube, which has increased significantly since Beta (12M) 0.62 September 2018. CJ ENM has been using its own YouTube channel as well as DIA TV to 52-Week Low 169,700 increase the exposure of its content in the global market. 52-Week High 266,500 We are also optimistic on the future of the music business. Synergies with the Mnet channel have allowed CJ ENM’s idol groups to enjoy a success rate unmatched in the (%) 1M 6M 12M industry. A boy band chosen from the reality show Produce X 101 is set to make their Absolute -3.1 -15.5 -24.1 debut in 2H19, and two teams, along with IZ*ONE, will resume activities. Produce X 101 Relative 3.2 -12.7 -10.4 has had huge cultural influence, ranking no. 1 on the Contents Power Index (CPI) throughout its entire run. Meanwhile, the company plans to debut two additional global 110 CJ ENM KOSDAQ idol groups in 2020. 100 90 Maintain Buy, but cut TP to W260,000 80 We remain Buy on CJ ENM but cut our target price to W260,000 to reflect our earnings 70 revisions and a decline in the value of the company’s equity holdings. Our SOTP-based 60 target price represents the sum of the values of the media business (W1.5tr; 20x 50 P/NOPLAT), the commerce business (W1tr; 11x P/NOPLAT), and equity holdings (W3.1tr). 7.18 11.18 3.19 7.19 The stock has sold off as a result of the sharp decline in 1Q19 OP margin. We believe the stock is poised for a rebound, as 2Q19 margins should recover, bringing attention to the stock’s attractive valuation.

메일@ miraeasset.com FY (Dec.) 12/15 12/16 12/17 12/18 12/19F 12/20F Revenue (Wbn) 2,309 2,209 2,260 3,427 4,670 4,881 OP (Wbn) 210 179 224 251 350 371 OP margin (%) 9.1 8.1 9.9 7.3 7.5 7.6 NP (Wbn) 85 23 131 163 216 284 EPS (W) 13,650 3,769 21,054 11,514 9,831 12,931 ROE (%) 9.6 2.6 13.5 8.6 7.6 9.2 P/E (x) 14.0 43.2 11.0 17.5 17.7 13.5 P/B (x) 1.3 1.1 1.4 1.4 1.1 1.0 Dividend yield (%) 1.3 1.5 1.3 0.6 0.7 0.7 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

Mirae Asset Daewoo Research 3

BOK Monitor A timely rate cut; Additional rate cuts unlikely in the near future

■ July MPC meeting The BOK cut the base rate by 25bps to 1.50% (from 1.75%), with one dissenting vote Fixed Income Report for a freeze. The BOK removed the phrase “growth roughly in line with potential July 19, 2019 growth” from the MPC statement, highlighting the impact of worsening exports and facility investments. Given uncertainties over the US-China trade dispute and Japan’s export restrictions on Korea, the BOK slashed its growth forecast for 2019 to 2.2% from 2.5% and projected CPI growth to remain below 1% for the time being. Mirae Asset Daewoo Co., Ltd. ■ Reasons for the preemptive rate cut

[Fixed Income Strategy] In lowering its growth projections for 2019, the BOK cited rapid change s in domestic

Hye -young Koo and international economic conditions and acknowledged that achieving economic +822 -3774 -1357 growth in line with potential growth is unlikely in the near future. We believe the BOK [email protected] has little policy room to maneuver, with the benchmark rate already near its historical low and effective bottom. The BOK emphasized that it would continue to weigh all Min -hyung Kim +822 -3774 -1830 relevant factors (domestic and global economic conditions, financial market stability , [email protected] etc.) in its future rate decisions. Key takeaways from the press conference are as follows:

1) Removal of “growth roughly in line with potential growth” from MPC statement and downward adjustments to GDP growth forecasts : The BOK stated that the Korean economy is being weighed down by internal ( worsening slowdown in exports and facility investments) and external (negative impact of US-China trade conflict and Japan’s export restrictions) factors . Accordingly, the BOK downgraded its 2019 real GDP growth forecast to 2.2% and potential GDP growth forecast to 2.5-2.6%, removing “growth roughly in line with potential growth” from the MPC statement.

2) Limited room for monetary policy maneuvering, given key rate’s effective bottom : BOK Governor Lee Ju-yeol said that Korea’s key rate has a higher effective bottom compared to anchor currency countries, resulting in limited maneuvering room. He added, however, that the effective bottom is a theoretical threshold, not an absolute standard, and varies widely according to the estimation approach used . The BOK stated that the July rate cut has reduced but not exhausted its room to maneuver

3) Effect of accommodative stance and future policy direction : The BOK asserted that its monetary policy stance was sufficiently accommodative and stressed the need to monitor the rate cut’s potential stimulus effects. While stating that the cut was needed to shield the real economy from rapid changes in internal and external conditions , the BOK also did not rule out the possibility of worsening financial imbalances, given the rebound in housing prices in the S eoul capital area. When asked about the future policy direction, the BOK said it would consider both external variables and domestic financial market stability, while enhancing its communication with the market.

■ Negative spread between 10-year USTs and KTBs to widen US economic indicators are faring better than previously expected. June data on employment and consumer prices were stronger than forecast , and the US industrial production index and retail sales also improved. If the Fed cuts its policy rate at end- July, we expect uncertainties over the future path of the economy to ease slightly, making it unlikely for US treasury yields to fall further. In contrast, Korea’s economic indicators do not look rosy. The BOK has downgraded its projections for both real and potential GDP growth, and the export slowdown may become protracted if Japan’s export restrictions on IT materials to Korea expand. Given that semiconductors accounted for 21% of Korea’s total exports in 2018 and are projected to account for 17% of exports in 2019, we expect concerns over export weakness to persist in 2H19. Meanwhile, we see solid demand for bonds, given strong inflows to the bond market.

As US treasury yields are likely to trend upward and KTB yields have limited upside, w e expect the negative spread between 10-year USTs and KTBs to further widen.

Mirae Asset Daewoo Research Key Universe Valuations July 22, 2019

※All data as of close July 18, 2019, unless otherwise noted.

19F Earnings growth Mkt Cap Price P/E (x) P/B (x) ROE (%) Ticker Company Div Yield OP EPS (Wbn) (W) (%) 19F 20F 19F 20F 19F 20F 19F 20F 19F 20F 005930 279,386 46,800 3.0 -56.7 31.8 -49.5 27.8 15.4 12.0 1.2 1.2 8.3 10.0 000660 SK Hynix 55,911 76,800 2.0 -85.3 94.0 -85.4 87.6 24.7 13.1 1.1 1.0 4.8 8.5 005380 Hyundai Motor 28,738 134,500 3.0 61.8 9.5 143.0 11.5 10.3 9.3 0.5 0.5 5.2 5.6 051910 LG Chem 25,519 361,500 1.7 -21.5 56.7 -24.3 68.0 25.4 15.1 1.6 1.4 6.4 10.1 068270 23,677 184,500 - - - - 0.0 0.0 012330 22,254 233,500 1.5 9.1 10.2 27.0 7.4 9.5 8.8 0.7 0.6 7.5 7.6 055550 Shinhan Financial Group 21,718 45,800 11.4 4.4 9.3 2.0 6.3 6.2 0.6 0.5 9.3 9.0 017670 SK Telecom 20,873 258,500 3.9 7.2 4.4 -51.8 65.3 13.9 8.4 0.8 0.8 6.6 10.3 051900 LG H&H 20,757 1,329,000 12.8 9.7 15.7 10.6 26.3 23.8 5.7 4.9 20.0 18.9 005490 POSCO 20,620 236,500 4.2 -14.6 2.8 71.9 3.0 7.1 6.9 0.4 0.4 6.6 6.4 035420 NAVER 20,190 122,500 0.3 -31.0 123.8 -45.3 194.1 56.9 19.3 2.9 2.6 6.6 17.3 105560 KB Financial Group 19,024 45,500 10.3 4.1 12.6 3.2 5.5 5.3 0.5 0.5 9.3 8.9 028260 Samsung C&T 17,717 93,400 2.1 5.4 20.1 -4.2 20.7 14.0 11.6 0.6 0.6 5.2 5.9 000270 Motors 17,552 43,300 1.8 20.5 19.7 54.5 16.7 9.8 8.4 0.6 0.6 6.3 7.0 018260 Samsung SDS 16,791 217,000 1.3 11.6 16.5 12.7 15.4 23.7 20.5 2.6 2.3 11.3 12.0 006400 Samsung SDI 16,641 242,000 0.4 17.7 37.7 12.6 27.1 21.6 17.0 1.3 1.2 6.4 7.5 015760 KEPCO 16,595 25,850 ------0.3 0.3 - - 034730 SK Holdings 16,042 228,000 2.1 13.3 12.9 -32.3 20.1 10.6 8.8 0.9 0.8 8.9 9.8 032830 Samsung Life 15,920 79,600 - - - - 0.0 0.0 096770 SK Innovation 15,719 170,000 4.7 -46.5 75.4 -56.1 94.1 22.0 11.3 0.8 0.8 4.0 7.6 033780 KT&G 13,578 98,900 4.2 12.8 5.6 17.5 5.1 12.8 12.2 1.5 1.4 12.7 12.6 000810 Samsung F&M 12,768 269,500 - - - - 0.0 0.0 003550 LG Corp. 12,752 73,900 3.1 17.2 15.4 5.5 15.6 6.6 5.7 0.7 0.6 10.5 11.1 066570 LG Electronics 11,554 70,600 1.1 7.1 20.0 23.7 39.9 8.3 5.9 0.8 0.7 10.3 12.9 035720 11,267 135,000 0.1 175.1 140.8 159.4 159.7 84.9 32.7 2.1 2.0 2.6 6.4 036570 NCsoft 11,017 502,000 1.2 27.8 27.2 44.7 17.9 18.2 15.4 3.4 2.8 23.2 22.7 086790 10,809 36,000 9.0 7.8 9.5 8.2 4.4 4.0 0.4 0.3 9.0 9.0 010950 S-Oil 10,189 90,500 1.3 -11.0 217.9 7.6 388.6 38.0 7.8 1.6 1.3 4.2 18.5 090430 AmorePacific 9,324 159,500 0.8 6.0 20.7 6.9 22.4 26.2 21.4 2.4 2.2 7.8 8.9 010130 Korea Zinc 8,661 459,000 2.4 13.8 0.8 23.1 -2.5 13.3 13.7 1.3 1.2 10.0 9.1 011170 Lotte Chemical 8,466 247,000 4.3 -34.3 31.9 -35.0 35.1 8.2 6.1 0.6 0.6 7.8 9.9 024110 7,934 13,800 5.6 2.7 3.6 1.8 5.0 4.9 0.4 0.4 8.5 8.1 251270 7,927 92,500 15.4 51.2 24.8 33.7 33.3 24.9 1.7 1.6 5.3 6.7 009540 KSOE 7,891 111,500 - 594.6 - - - 66.3 0.7 0.7 - 1.0 091990 Celltrion Healthcare 7,392 51,400 - 192.4 1119.2 156.4 53.0 20.7 4.0 3.4 8.2 18.6 030200 KT 7,298 27,950 3.9 9.5 1.0 18.2 5.3 9.0 8.5 0.5 0.5 6.0 6.0 009150 Samsung Electro-Mechanics 7,215 96,600 1.1 -21.6 27.6 -18.9 39.2 14.1 10.1 1.4 1.2 10.5 13.0 018880 Hanon Systems 6,432 12,050 - - - - 0.0 0.0 032640 LG Uplus 6,178 14,150 4.6 -12.5 9.5 -18.5 15.2 15.7 13.7 0.9 0.9 5.6 6.3 034220 LG Display 6,011 16,800 - - - - - 233.2 0.4 0.4 - 0.2 086280 6,000 160,000 2.1 10.9 3.4 26.2 15.1 10.9 9.4 1.3 1.1 12.2 12.6 267250 5,391 331,000 5.6 78.7 2.1 154.0 4.5 7.9 7.6 0.6 0.6 8.6 8.5 Holdings 004020 5,318 39,850 1.9 6.1 22.5 53.1 31.9 8.7 6.6 0.3 0.3 3.5 4.3 000720 Hyundai E&C 5,139 46,150 1.1 22.4 10.8 21.0 1.6 11.1 11.0 0.8 0.7 7.3 7.0 010140 SamsungHvyInd 4,864 7,720 - - - - - 62.9 0.6 0.6 - 1.2 071050 Korea Investment Holdings 4,447 79,800 - - - - 0.0 0.0 097950 CJ CheilJedang 4,283 284,500 1.2 15.4 12.7 -64.8 23.7 14.9 12.0 0.9 0.8 6.3 7.3 029780 Samsung Card 4,235 36,550 -16.3 3.1 2.8 4.1 11.9 11.5 0.6 0.6 1.5 1.5 023530 Lotte Shopping 4,074 144,000 3.6 6.5 3.9 - 10.5 10.1 9.2 0.3 0.3 3.4 3.7 005940 NH Investment & Securities 4,066 14,450 - - - - 0.0 0.0 Source: Mirae Asset Daewoo Research

Mirae Asset Daewoo Research Market Data July 22, 2019

※All data as of close July 19, 2019, unless otherwise noted.

Other Major Indices Economic Indicators Close Net Chg 1D (%) YTD (%) Close 1D ago 1M ago 1Y ago MSCI Korea* 423.65 -0.44 -0.10 -1.23 USD/KRW 1,179.50 1,180.40 1,185.00 1,128.90 KOSPI 2,094.36 27.81 1.35 4.20 JPY100/KRW 1,097.77 1,093.32 1,092.12 1,000.31 KOSDAQ 674.06 8.91 1.34 0.70 EUR/KRW 1,327.59 1,325.29 1,326.67 1,314.38 Dow Jones* 27,222.97 3.12 0.01 16.70 3Y Treasury 1.33 1.35 1.48 2.09 S&P 500* 2,995.11 10.69 0.36 19.33 3Y Corporate 1.83 1.85 2.00 2.74 NASDAQ* 8,207.24 22.03 0.27 23.12 DDR4 8Gb* 3.60 3.56 3.39 7.98 Philadelphia Semicon* 1,526.97 23.10 1.54 31.04 NAND MLC 64G* 2.49 2.46 2.35 3.35 FTSE 100* 7,493.09 -42.37 -0.56 11.27 Oil (Dubai)* 62.14 63.23 59.92 69.68 Nikkei 225 21,466.99 420.75 2.00 9.74 Gold* 1,428.10 1,423.30 1,346.60 1,227.90 Hang Seng* 28,461.66 -131.51 -0.46 13.26 Customer deposits (Wbn)* 24,474 23,907 23,947 26,366 Taiwan (Weighted) 10,873.19 73.91 0.68 13.81 Equity type BC (Wbn)(Jul. 17) 80,296 80,579 80,158 81,603 Note: * as of July 18, 2019 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 Samsung Electronics 40.82 Hyundai Eng. & Cosnt. 14.48 Samsung Electronics 81.49 KODEX 200 Futures Inverse 2X 29.95 Kakao 27.75 Hynix 13.36 Hynix 64.19 KODEX Inverse 15.93 SEMCO 22.35 emart 11.10 KODEX Leverage 53.64 13.60 Samsung Electronics (P) 8.12 Hyundai Motor 8.67 LG Chem 21.50 Foosung 11.47 Samsung F&M Insurance 7.17 SK Telecom 7.55 SEMCO 21.09 7.83 LG Electronics 6.68 Celltrion 6.15 KODEX Kosdaq150 Leverage 15.48 LG Display 6.90 LG Chem 5.38 Hana Financial Group 6.05 Hyundai Motor 13.87 Hyundai Heavy Industries 4.14 KODEX 200 Futures Inverse 2X 5.02 Shinhan Financial Group 4.21 Samsung SDI 11.81 KODEX KOSDAQ150 INVERSE 3.92 Hyundai Elevator 4.80 LG Corp. 3.91 Shinhan Financial Group 11.72 Advanced Materials 3.25 NC Soft 4.37 Netmarble 3.80 Hana Financial Group 9.48 HDC-OP 2.97 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 SillaJen 4.57 Soulbrain 9.70 Soulbrain 10.21 ASTORY 13.60 Dongjin Semichem 3.76 KMW 7.00 NHN KCP 6.41 KMW 3.31 Celltrion Healthcare 3.58 SAMT 4.36 L&F 3.84 Settlebank 2.37 Kukil Paper 3.51 OE Solutions 4.19 SillaJen 3.63 RFHIC 2.17 BH,LTD. 2.78 SKC Kolon PI 3.75 ViroMed 3.43 Cafe24 Corp. 1.83 YG Entertainment 2.22 NHN KCP 3.47 Celltrion Healthcare 3.17 FLITTO 1.61 EO Technics 2.05 Tes 2.19 Tes 2.21 Dongjin Semichem 1.39 CHA Biotech 1.83 PearlAbyss 2.15 Daejoo Electronic Materials 1.82 Ace Technology 1.24 Emerson Pacific 1.82 Ace Technology 1.75 OE Solutions 1.40 Semiconductor 1.21 Telcon RF Pharm. 1.58 UniTest 1.71 LegoChem Bio 1.34 Sambo Industries 1.15 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 46,800 700 279,386 Celltrion Healthcare 51,400 2,000 7,392 Hynix 76,800 2,100 55,911 CJ ENM 174,500 2,400 3,827 Samsung Electronics (P) 38,500 750 31,681 SillaJen 49,000 2,600 3,482 Hyundai Motor 134,500 500 28,738 ViroMed 198,600 16,600 3,169 LG Chem 361,500 5,500 25,519 Medy-tox 419,000 6,400 2,437 Celltrion 184,500 4,000 23,677 PearlAbyss 182,400 -2,000 2,375 Hyundai Mobis 233,500 2,500 22,254 KMW 50,900 400 1,979 Shinhan Financial Group 45,800 550 21,718 Studio Dragon 67,500 500 1,893 SK Telecom 258,500 -1,000 20,873 SK Materials 168,300 1,500 1,775 LG Household & Health Care 1,329,000 11,000 20,757 Hugel 367,100 6,700 1,600 Source: