Kakao (035720 KS ) Domestic ride -hailing services: Potential W10tr valuation? Internet High valuations of / Company Update US ride-hailing companies Uber and Lyft have filed for IPOs with the Securities and January 8, 2019 Exchange Commission (SEC) in December 2018. Of note, Uber provides a wide range of services, including ride-hailing (with options like Standard, Luxury, and SUV), shared rides, food delivery (Uber Eats), a shipping platform (Uber Freight), ride-hailing exclusively for healthcare organizations (Uber Health), and a staffing platform (Uber Works). (Maintain) Buy In 2018, Uber recorded an estimated US$46.8bn in total gross bookings and US$10.8bn in net revenue. However, the company is still incurring huge losses, with a net loss of Target Price (12M, W) 130,000 US$1.07bn in 3Q18. Meanwhile, Lyft controls 29% of the North American market as of October 2018, up from 22% in October 2017. US media reports suggest Uber and Lyft Share Price (01/07/19, W) 103,000 could be valued at US$120bn (W135tr) and US$15.1bn (W17tr), respectively, in their IPOs. Success will depend on traffic and revenue growth Expected Return 26% We believe the success of Uber’s and Lyft’s IPOs will be tied to the pace of growth of their user traffic and revenue around the time of their listings. In addition, we think OP (18F, Wbn) 102 these two companies’ stock market performances will be reflected in the Korean stock Consensus OP (18F, Wbn) 102 market by their effect on growth expectations on the domestic ride-sharing market.

EPS Growth (18F, %) -48.8 Ride-hailing is projected to account for 30% of the global auto market by 2030 , with many Market EPS Growth (18F, %) 7.4 consumers expected to forgo car ownership in favor of such services. Applying the 30% P/E (18F, x) 125.6 share to domestic auto market projections, we estimate that Korea’s ride-hailing market Market P/E (18F, x) 8.2 could grow to W15tr. If we simply apply the current valuations of Uber/Lyft (based on KOSPI 2,037.10 media reports) as well as the size of the US auto market versus the Korean auto market, domestic ride-hailing services could reach a market value of W10tr. Market Cap (Wbn) 8,589 Shares Outstanding (mn) 83 Mobility’s traffic dominance; maintain Buy and TP of W130,000 Free Float (%) 62.4 Ride-hailing services continue to be a subject of controversy domestically and globally, Foreign Ownership (%) 25.2 amid intense conflicts with the taxi industry. Nevertheless, there are bullish expectations Beta (12M) 1.56 on Uber’s and Lyft’s IPOs that are supported by a number of positive indicators, including 52-Week Low 87,600 the rapid rise of user traffic and revenue, along with the strong revenue growth of 52-Week High 159,500 Russian company Yandex’s (YNDX US EQUITY/CP: $29.02) ride-sharing service since its launch in 2017. (%) 1M 6M 12M Absolute -10.0 -10.0 -34.0 Kakao is currently testing a beta car pool service, and lawmakers and regulators are Relative -8.3 0.4 -19.1 carrying out related discussions. A string of new competitors are also entering the market. However, we note that Kakao Mobility holds a dominant share in Korea’s ride- 130 Kakao KOSPI hailing market, meaning it would claim the majority of the potential W10tr valuation of 110 domestic ride-hailing services.

90

70

50 12.17 4.18 8.18 12.18

Mirae Asset Daewoo Co., Ltd.

[ Internet ] FY (Dec.) 12/15 12/16 12/17 12/18F 12/19F 12/20F Revenue (Wbn) 932 1,464 1,972 2,383 2,773 3,363 Chang -kwean Kim +822 -3774 -1614 OP (Wbn) 89 116 165 102 143 330 [email protected] OP margin (%) 9.5 7.9 8.4 4.3 5.2 9.8

NP (Wbn) 76 58 109 64 155 276 EPS (W) 1,269 874 1,602 820 1,857 3,307 ROE (%) 3.0 1.9 2.9 1.6 3.7 6.3

P/E (x) 91.2 88.1 85.5 125.6 55.5 31.1 P/B (x) 2.7 1.5 2.3 2.1 2.0 1.9 Dividend yield (%) 0.1 0.2 0.1 0.1 0.1 0.1 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

January 8, 2019 Kakao

Figure 1. Uber and Lyft preparing for IPO in the first half of 2019

Source: The Hustle, Mirae Asset Daewoo Research

Figure 3. Trend of total market cap of Uber and US vehicle Figure 2. Estimated corporate value of Uber and Lyft after IPO manufacturers (2014-19)

(US$bn) (-5Y=100) 150 800 Ford Fiat Chrysler Automobiles 120 General Motors 120 Uber 600

90 400 60

200 30 15.1

0 0 Uber Lyft 1/14 1/15 1/16 1/17 1/18 1/19

Source: Bloomberg, media reports, Mirae Asset Daewoo Research Note: Based on each year’s highest estimated value for Uber and daily market caps for others Source: Bloomberg, Forbes, Statista, Mirae Asset Daewoo Research Figure 4. Global auto market breakdown (based on market Figure 5. Korean auto market breakdown (based on market cap) cap)

(%) Vehicle sales Aftermarket EV/AV Ride-hailing (Wtr) 1% 100 80 Vehicle sales Aftermarket EV/AV Ride-hailing 1% 25% 30% 75 60 0.5 11% 0.5 14.9 12.3 50 19% 40 5.5 9.5 73%

25 20 36.5 40% 27.3

0 0 2016 2030 2018 2030

Source: McKinsey Center for Future Mobility (Oct. 2017), Mirae Asset Daewoo Research Notes: Korean auto market cap is based on our estimate Source: McKinsey Center for Future Mobility (Oct . 2017), Mirae Asset Daewoo Research

Mirae Asset Daewoo Research 2 January 8, 2019 Kakao

Figure 6. Estimated values of the US auto market (based on Figure 7. Estimated values of the Korean auto market (based revenue) and US ride-hailing market (based on the market on revenue) and Korean ride-hailing market (based on caps of Uber and Lyft) market cap)

(Wtr) (Wtr) 600 566.5 40 36.5

30 400

20

200 152.3 9.8 10

0 0 US automotive industry size Estimated value of Uber and Lyft Korea automotive industry size Estimated value of Share Mobility Economy

Note: US$12bn for Uber and US$15.1bn for Lyft Notes: Korean auto market value is based on our estimate Source: Bloomberg, Statista, the Press, Mirae Asset Daewoo Research Source: KAMA, KAIDA, Mirae Asset Daewoo Research

Figure 8. Global ride-hailing app downloads (weekly) in 2012-18

(mn downloads) 6 Uber Lyft DiDi Chuxing 4

2

0 1/12 1/13 1/14 1/15 1/16 1/17 1/18

Source: SensorTower, Mirae Asset Daewoo Research

Figure 9. North America’s cumulative ride-hailing app downloads (monthly) in 2012-18

(mn downloads) 250 Uber Uber Eats Lyft 200

150

100

50

0 1/12 1/13 1/14 1/15 1/16 1/17 1/18 Source: SensorTower, Mirae Asset Daewoo Research

Mirae Asset Daewoo Research 3 January 8, 2019 Kakao

Figure 10. Number of domestic ride-hailing app active users (2013-18)

(mn persons) 6 Green Car SOCAR Kakao T T map Taxis TADA 4

2

0 1/13 1/14 1/15 1/16 1/17 1/18

Source: SensorTower, Mirae Asset Daewoo Research

Figure 11. Cumulative quarterly Kakao T downloads (1Q15~4Q18)

(mn downloads) 40

27.3 mn downloads +22.9%, YoY

30 22.2 mn downloads +44.7%, YoY

15.3 mn downloads +88.6%, YoY 20

8.1 mn downloads

10

0 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18

Source: SensorTower, Mirae Asset Daewoo Research

Figure 12. Cumulative quarterly Uber downloads (1Q15~4Q18)

(mn downloads)

800 620.7 mn downloads +31.9%, YoY

600 455.5 mn downloads +78.1%, YoY

400 255.7 mn downloads +216.3%, YoY

80.8 mn downloads 200 +496.4%, YoY

0 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18

Source: SensorTower, Mirae Asset Daewoo Research

Mirae Asset Daewoo Research 4 January 8, 2019 Kakao

Table 1. Uber’s revenue scenario by stock market condition (US$bn, %) 2016 2017 2018(F) 2019(F) 2020(F) 2021(F) 2022(F) Total Bookings (US$bn) 21.6 32.8 46.8 60.8 76.1 87.5 100.6 Base Case GR (YoY, %) 151.2 51.9 42.7 30 25 15 15 Revenue (US$bn) 4.5 7.2 10.8 14 17.5 20.1 23.1 Total Bookings (US$bn) 21.6 32.8 46.8 65.5 91.7 119.2 143.1 Bull Case GR (YoY, %) 151.2 51.9 42.7 40 40 30 20 Revenue (US$bn) 4.5 7.2 10.8 15.1 22 29.8 35.8 Total Bookings (US$bn) 21.6 32.8 46.8 53.8 59.2 65.1 71.6 Bear Case GR (YoY, %) 151.2 51.9 42.7 15 10 10 10 Revenue (US$bn) 4.5 7.2 10.8 11.8 12.4 13 14.3 Source: Bloomberg, Mirae Asset Daewoo Research

Table 2. Yandex: Quarterly revenue (Wbn) 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 Revenue 405.2 436.7 - - 500.8 517.1 557.5 Search and Portal 366.1 397.8 - - 420 430.1 456.6 Taxi 15.3 15.3 - - 58.7 70.8 87.5 Classifieds 7.3 9.1 - - 13.3 15.9 16.9 Experiments 6.4 6.8 - - 3.4 7.2 12.1 Media Services - - - - - 6.9 7.1 E-commerce 25.4 23.1 - - 23.7 7.7 0 Eliminations -15.2 -15.4 - - -26.2 -21.6 -22.6 Media Services - - - - 7.9 - - Source: Bloomberg, Mirae Asset Daewoo Research

Figure 13. Kakao T and T Map Taxi’s weekly active users Figure 14. Weekly time spent on Kakao T and T Map Taxi

(mn) ('000 hours) 3 Kakao T 400 Kakao T T map Taxi T map Taxi

300 2

200

1 100

0 0 6/16 12/16 6/17 12/17 6/18 12/18 6/16 12/16 6/17 12/17 6/18 12/18

Source: KoreanClick, Mirae Asset Daewoo Research Source: KoreanClick, Mirae Asset Daewoo Research

Mirae Asset Daewoo Research 5 January 8, 2019 Kakao

Figure 15. Weekly running times of Kakao T and T Map Taxi Figure 16. Kakao T’s weekly active users

(mn times) ('000) 20 Kakao T 600 Kakao T (driver version) T Map Taxi Kakao T designated-driver service (driver version) Kakao T designated-driver service Kakao T Crew 15 400

10

200 5

0 0 6/16 12/16 6/17 12/17 6/18 12/18 12/14 12/15 12/16 12/17 12/18

Source: KoreanClick, Mirae Asset Daewoo Research Source: KoreanClick, Mirae Asset Daewoo Research

Mirae Asset Daewoo Research 6 January 8, 2019 Kakao

Kakao (035720 KS/Buy/TP: W130,000)

Comprehensive Income Statement (Summarized) Statement of Financial Condition (Summarized) (Wbn) 12/17 12/18F 12/19F 12/20F (Wbn) 12/17 12/18F 12/19F 12/20F Revenue 1,972 2,383 2,773 3,363 Current Assets 1,993 2,307 2,701 3,288 Cost of Sales 0 0 0 0 Cash and Cash Equivalents 1,117 1,279 1,504 1,837 Gross Profit 1,972 2,383 2,773 3,363 AR & Other Receivables 307 340 396 480 SG&A Expenses 1,807 2,281 2,630 3,033 Inventories 22 26 30 37 Operating Profit (Adj) 165 102 143 330 Other Current Assets 547 662 771 934 Operating Profit 165 102 143 330 Non-Current Assets 4,356 4,324 4,304 4,336 Non-Operating Profit -12 97 94 95 Investments in Associates 162 196 228 276 Net Financial Income 3 10 14 18 Property, Plant and Equipment 271 224 187 159 Net Gain from Inv in Associates 9 0 0 0 Intangible Assets 3,690 3,627 3,570 3,519 Pretax Profit 153 199 237 425 Total Assets 6,349 6,631 7,005 7,624 Income Tax 28 125 59 107 Current Liabilities 1,041 1,221 1,393 1,652 Profit from Continuing Operations 125 74 178 318 AP & Other Payables 280 339 394 478 Profit from Discontinued Operations 0 0 0 0 Short-Term Financial Liabilities 177 177 178 178 Net Profit 125 74 178 318 Other Current Liabilities 584 705 821 996 Controlling Interests 109 64 155 276 Non-Current Liabilities 801 838 874 928 Non-Controlling Interests 16 10 24 42 Long-Term Financial Liabilities 621 621 621 621 Total Comprehensive Profit 119 74 178 318 Other Non-Current Liabilities 180 217 253 307 Controlling Interests 103 64 154 274 Total Liabilities 1,842 2,060 2,267 2,579 Non-Controlling Interests 16 10 25 44 Controlling Interests 4,029 4,084 4,226 4,490 EBITDA 295 212 236 410 Capital Stock 34 34 34 34 FCF (Free Cash Flow) 297 343 399 590 Capital Surplus 3,604 3,604 3,604 3,604 EBITDA Margin (%) 15.0 8.9 8.5 12.2 Retained Earnings 403 457 600 864 Operating Profit Margin (%) 8.4 4.3 5.2 9.8 Non-Controlling Interests 479 488 512 554 Net Profit Margin (%) 5.5 2.7 5.6 8.2 Stockholders' Equity 4,508 4,572 4,738 5,044

Cash Flows (Summarized) Forecasts/Valuations (Summarized) (Wbn) 12/17 12/18F 12/19F 12/20F 12/17 12/18F 12/19F 12/20F Cash Flows from Op Activities 372 343 399 590 P/E (x) 85.5 125.6 55.5 31.1 Net Profit 125 74 178 318 P/CF (x) 30.3 27.2 27.3 17.7 Non-Cash Income and Expense 181 222 136 166 P/B (x) 2.3 2.1 2.0 1.9 Depreciation 61 47 37 29 EV/EBITDA (x) 30.5 38.0 32.8 17.9 Amortization 69 63 57 51 EPS (W) 1,602 820 1,857 3,307 Others 51 112 42 86 CFPS (W) 4,517 3,786 3,770 5,803 Chg in Working Capital 28 160 127 193 BPS (W) 59,344 48,976 50,693 53,860 Chg in AR & Other Receivables -2 -37 -35 -54 DPS (W) 148 148 148 148 Chg in Inventories 1 -4 -4 -6 Payout ratio (%) 8.0 15.9 6.6 3.7 Chg in AP & Other Payables 3 23 21 32 Dividend Yield (%) 0.1 0.1 0.1 0.1 Income Tax Paid -3 -125 -59 -107 Revenue Growth (%) 34.7 20.8 16.4 21.3 Cash Flows from Inv Activities -355 -138 -131 -198 EBITDA Growth (%) 28.3 -28.1 11.3 73.7 Chg in PP&E -72 0 0 0 Operating Profit Growth (%) 42.2 -38.2 40.2 130.8 Chg in Intangible Assets -28 0 0 0 EPS Growth (%) 83.3 -48.8 126.5 78.1 Chg in Financial Assets -278 -138 -131 -198 Accounts Receivable Turnover (x) 11.2 12.0 11.8 12.1 Others 23 0 0 0 Inventory Turnover (x) 115.6 100.1 98.4 100.3 Cash Flows from Fin Activities 468 -10 -11 -11 Accounts Payable Turnover (x) 0.0 0.0 0.0 0.0 Chg in Financial Liabilities -210 0 0 1 ROA (%) 2.1 1.1 2.6 4.3 Chg in Equity 499 0 0 0 ROE (%) 2.9 1.6 3.7 6.3 Dividends Paid -16 -10 -12 -12 ROIC (%) 3.7 2.0 4.2 9.6 Others 195 0 1 0 Liability to Equity Ratio (%) 40.9 45.1 47.8 51.1 Increase (Decrease) in Cash 475 162 225 333 Current Ratio (%) - - - - Beginning Balance 642 1,117 1,279 1,504 Net Debt to Equity Ratio (%) -17.1 -22.4 -28.3 -35.8 Ending Balance 1,117 1,279 1,504 1,837 Interest Coverage Ratio (x) 14.7 10.3 14.4 33.2 Source: Company data, Mirae Asset Daewoo Research estimates

Mirae Asset Daewoo Research 7 January 8, 2019 Kakao

APPENDIX 1

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

Company (Code) Date Rating Target Price (W) Kakao Kakao (035720) 11/26/2018 Buy 130,000 200,000 08/27/2018 No Coverage 08/10/2018 Buy 150,000 150,000 05/11/2018 Trading Buy 130,000 02/08/2018 Trading Buy 150,000 100,000 12/17/2017 Trading Buy 170,000 50,000 11/05/2017 Buy 190,000

08/10/2017 Buy 130,000 0 06/18/2017 Buy 125,000 Jan 17 Jan 18 Jan 19 05/11/2017 Buy 115,000 04/04/2017 Buy 105,000 01/02/2017 No Coverage

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 73.71% 13.92% 12.37% 0.00% Investment Banking Services 82.61% 4.35% 13.04% 0.00% * Based on recommendations in the last 12-months (as of September 30, 2018)

Disclosures As of the publication date, Mirae Asset Daewoo Co., Ltd. has acted as a liquidity provider for equity-linked warrants backed by shares of Kakao as an underlying asset; other than this, Mirae Asset Daewoo has no other special interests in the covered companies.

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 Korean language. 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

Mirae Asset Daewoo Research 8 January 8, 2019 Kakao

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 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 9 January 8, 2019 Kakao

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