Hankook Tire (Buy/TP: W57,000) Lower TP KOSPI 340,419 3,495 Solid Earnings to Overcome Concerns About Demand KOSPI 200 74,372 2,731 KOSDAQ 453,320 1,587

February 5, 2013

KOREA

Morning

Company News & Analysis Major Indices Close Chg Chg (%) Doosan Corp. (Buy/TP: W160,000) Lower TP KOSPI 1,953.21 -4.58 -0.23 Going to painstaking lengths to eliminate risks KOSPI 200 256.89 -0.75 -0.29 KOSDAQ 501.32 -1.99 -0.40 Doosan Heavy I&C (Buy/TP: W60,000) Lower TP Construction business needs to get back on track Turnover ('000 shares, Wbn) Volume Value Hankook Tire (Buy/TP: W57,000) Lower TP KOSPI 340,419 3,495 Solid earnings to overcome concerns about demand KOSPI 200 74,372 2,731 KOSDAQ 453,320 1,587

Com2uS (Buy/TP :W60,000) Lower TP Market Cap (Wbn) Smartphone mobile games still in early stages of growth Value KOSPI 1,130,353 KOSDAQ 110,222

KOSPI Turnover (Wbn) Buy Sell Net Foreign 1,149 1,089 60 Institutional 821 896 -75 Retail 1,513 1,498 16

KOSDAQ Turnover (Wbn) Buy Sell Net Foreign 74 71 3 Institutional 82 73 9 Retail 1,434 1,445 -12

Program Buy / Sell (Wbn) Buy Sell Net KOSPI 717 748 -31 KOSDAQ 12 13 -2

Advances & Declines Advances Declines Unchanged KOSPI 339 477 70 KOSDAQ 316 616 65

KOSPI Top 5 Most Active Stocks by Value (Wbn) Price (W) Chg (W) Value Samsung Electronics 1,437,000 -4,000 367 KODEX LEVERAGE 12,210 -75 257 KODEX 200 25,925 -65 176 KODEX INVERSE 7,615 30 139 Hyundai Motor 203,500 -3,000 121

KOSDAQ Top 5 Most Active Stocks by Value (Wbn) Price (W) Chg (W) Value Victek 2,995 355 69 Celltrion 27,100 1,300 46 Com2us 37,800 650 46 ONSE TELECOM 543 70 38 Seoul Semiconductor 25,700 -1,500 29 Note: As of February 4, 2013

This document is a summary of a report prepared by Daewoo Securities Co., Ltd. („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. 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. 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.

February 5, 2013 Company Report

Holding Doosan Corp. (000150 KS) Companies

Daewoo Securities Co., Ltd. Going to painstaking lengths to eliminate risks Dae-ro Jeong +822-768-4160 4Q12 review: Doosan E&C provisioning leads to large equity method losses [email protected] Doosan Corp. reported 4Q consolidated revenues of W900.4bn (12.3% QoQ; -24.8%

YoY) and an operating loss of W56.1bn (turning to loss QoQ and YoY), widely missing our estimates and the market consensus. The biggest reason behind the disappointing numbers was a substantial equity method loss, led by W750.6bn in loss provisioning at Doosan E&C (a second-tier subsidiary) in 4Q, which caused Doosan Heavy I&C (a subsidiary) to turn to a pre-tax loss of W329.5bn.

The firm’s in-house businesses posted 4Q revenues and operating profit of W419.1bn (-

15.3% YoY) and W37.1bn (+31.4%), respectively (based on a simplified sum). The Electro-Materials unit delivered decent earnings (operating profit of W25.5bn; OP margin Buy (Maintain) of 14.5%), thanks to its efforts to improve margins by increasing the proportion of high- Target Price (12M, W) 160,000 value products (e.g. FCCL), in addition to capacity expansions. On the other hand, the Share Price (11/07/01,W) 123,500 Mottrol unit suffered a sequential slowdown (operating loss of W1bn), due to the Expected Return (%) 29.6 delayed recovery of the Chinese excavator market. EPS Growth (13F, %) 151.5 2013 outlook: In-house to pick up Market EPS Growth (13F, %) 18.1 P/E(13F, x) 14.6 Looking forward, we expect the Electro-Materials division to see top-line growth, Market P/E(13F, x) 9.3 supported by: 1) continued strength in downstream industries (of note: a major client KOSPI 1,953.21 has begun full-fledged production of a new product), and 2) bottom-line growth aided by Market Cap (Wbn) 2,576 a better product mix thanks in part to high-end materials (the firm aims to raise high-end Shares Outstanding (mn) 26 ratio to 47% of revenues in 2013; +9% YoY). As for the Mottrol unit, we look for a Avg Trading Volume (60D, '000) 86 gradual earnings recovery following a bottom in 4Q. We do not expect a meaningful Avg Trading Value (60D, Wbn) 11 recovery in the Chinese excavators market any time soon, but we foresee modest Dividend Yield (13F, %) 2.4 earnings growth driven by Chinese excavator manufacturers placing pre-orders to Free Float (%) 32.9 replenish their inventories. 52-Week Low 116,000 Doosan Corp. is currently working to sell its stake in DIP Holdings (which owns stakes in 52-Week High 175,500 KAI and SRS (KFC)) and some of its non-core Doosan Group assets. Once the sales are Beta (12M, Daily Rate of Return) 0.99 completed, we believe the cash proceeds could be used to pay off the company’s debt Price Return Volatility (12M Daily, %,SD) 1.8 and improve its balance sheet. Foreign Ownership (%) 12.3 Major Shareholder(s) Maintain Buy, but Lower TP to W160,000 Park Yong Kon et al. (45.44%) We cut our target price on Doosan Corp. by 7% from W172,000 to W160,000 to reflect Treasury Shares (11.53%) our 2013 earnings adjustments to in-house units, as well as the decline in the Treasury Fund (9.65%) company’s investment asset value following share pullbacks of subsidiaries. We do not Price Performance doubt the growth potential of the company’s in-house businesses (especially with the (%) 1M 6M 12M construction of an overseas production base in China). Thus, we believe the projected Absolute -6.8 -9.4 -26.2 earnings pickup in in-house units, as well as the recent capital injection into Doosan Relative -3.9 -15.0 -25.2 E&C (and the resulting, improved balance sheet) should eliminate, to some extent, the discounts to Doosan Corp. and affiliates’ stock.

§ Earnings & Valuation Metrics Share price KOSPI FY Revenues OP OP Margin NP EPS EBITDA FCF ROE P/E P/B EV/EBITDA 120 (Wbn) (Wbn) (%) (Wbn) (W) (Wbn) (Wbn) (%) (X) (X) (X) 110 12/10 3,753 900 24.0 768 24,986 981 3,493 30.7 6.3 1.5 5.1 100 12/11 4,033 453 11.2 305 9,893 496 146 9.5 14.8 1.4 10.4 90 80 12/12P 3,834 199 5.2 96 3,361 292 193 2.9 36.7 1.1 14.0 70 12/13F 4,028 357 8.9 222 8,452 482 173 6.9 14.6 1.0 7.7 60 12/14F 4,365 425 9.7 260 9,919 600 211 7.9 12.5 1.0 5.9 1/12 5/12 9/12 1/13

Note: All figures are based on consolidated K-IFRS; NP refers to net profit attributable to controlling interests Source: Company data, KDB Daewoo Securities Research estimates

Analysts who prepared this report are registered as research analysts in Korea but not in any other jurisdiction, including the U.S.

February 5, 2013 Company Report

Doosan Heavy I&C (034020 KS) Machinery

Daewoo Securities Co., Ltd. Construction business needs to get back on track Ki-jong Sung +822-768-3263 4Q review: Revenues of W2.9tr (+4.1% YoY), OP of W168.6bn (+9.2% YoY) [email protected] Doosan Heavy I&C (DHIC) posted 4Q revenues of W2.9tr (+4.1% YoY), an operating Ryan Kang profit of W168.6bn (+9.2% YoY), and a net loss of W219.1bn (turning to loss YoY), +822-768-3065 missing both our estimates and the market consensus. 4Q OP margin edged up 0.3%p [email protected] YoY and 0.7%p QoQ to 5.8%.

Revenues were not far off our projections, but margins were still disappointing in what is normally considered a strong season. We attribute overall weakness in margins to: 1) slower-than-expected revenue growth (9.1%) at the firm’s largest business (power generation), and 2) the global economic slowdown causing top-line contraction at the construction and DPS units, as well as the more profitable forging unit. Non-operating Buy (Maintain) profit was hit by Doosan E&C’s substantial provisioning, which led to equity method Target Price (12M, W) 60,000 losses of W382.7bn. Net financing costs stood at W39.2bn, while the strengthening of Share Price (02/04/13, W) 42,850 the won resulted in F/X gains of W20.6bn. Expected Return (%) 40.0 EPS Growth (13F, %) 1,307.8 It all comes down to construction Market EPS Growth (13F, %) 18.1 Doosan Heavy I&C announced it will inject net cash of W505.5bn and transfer its heat P/E (13F, x) 9.9 recovery system generator (HRSG) business (estimated at W371.6bn, including W70bn Market P/E (13F, x) 9.3 in other assets) to Doosan E&C. DHIC will receive shares in Doosan E&C, essentially KOSPI 1,953.21 putting DHIC’s stake in Doosan E&C at over 80%. We see this extraordinary measure Market Cap (Wbn) 4,536 as a painful but necessary action to remove uncertainties over Doosan E&C, which have Shares Outstanding (mn) 106 persistently held back DHIC’s share performance. Avg Trading Volume (60D, '000) 501 We expect the capital injection will put to rest one of the largest downside risks to the Avg Trading Value (60D, Wbn) 22 stock, but other than that we see no notable change regarding DHIC. The only Dividend Yield (13F, %) 1.8 difference would be accounting adjustments; overall operations and organization remain Free Float (%) 42.8 52-Week Low (W) 39,900 intact. We thus believe valuations for DHIC should (for the most part) remain 52-Week High (W) 78,300 unchanged. In the end, we believe DHIC’s share performance will come down to Beta (12M, Daily Rate of Return) 0.91 whether Doosan E&C’s major businesses can get back on its feet. We do not expect Price Return Volatility (12M Daily, %, SD) 2.0 uncertainties over Doosan E&C to resurface for a while, but will monitor operating Foreign Ownership (%) 13.5 trends in construction more closely than before. Major Shareholder(s) Maintain Buy, but Lower TP to W60,000 Doosan et al. (41.27%) Treasury shares (15.88%) We maintain our Buy call on DHIC, but trim our target price by 7.7% to W60,000. We have adjusted down our 2013 earnings and asset-value projections in light of last year’s Price Performance weak orders and the recent HRSG asset swap. Our valuation is based on the sum of the (%) 1M 6M 12M operating value of DHIC’s legacy businesses and its ownership stake in subsidiaries Absolute -12.7 -30.9 -40.8 (Doosan E&C, Doosan Infracore and Doosan Engine) as a percentage of their market Relative -9.8 -36.5 -39.8 cap. We expect the financial support to Doosan E&C will boost DHIC’s operating earnings and enterprise value; thus, we see upside risks to the company’s stock going forward.

§ Earnings & Valuation Metrics Share price FY Revenues OP OP Margin NP EPS EBITDA FCF ROE P/E P/B EV/EBITDA 120 KOSPI 110 (Wbn) (Wbn) (%) (Wbn) (Won) (Wbn) (Wbn) (%) (x) (x) (x) 100 12/10 7,929 516 6.5 1,252 11,831 746 2,320 30.9 7.3 2.3 17.0 90 12/11 8,496 570 6.7 275 2,596 682 518 5.7 25.1 1.8 15.0 80 70 12/12P 9,627 526 6.2 33 309 795 158 0.7 146.4 1.3 10.1 60 12/13F 9,492 595 6.2 460 4,347 796 458 9.6 9.9 1.2 9.5 50 40 12/14F 9,967 633 6.4 492 4,649 832 457 9.7 9.2 1.1 8.9 1/12 5/12 9/12 1/13 Note: All figures are based on consolidated K-IFRS; NP refers to net profit attributable to controlling interests Source: Company data, KDB Daewoo Securities Research estimates

Analysts who prepared this report are registered as research analysts in Korea but not in any other jurisdiction, including the U.S.

February 5, 2013 Doosan Heavy I&C

Table 1. 4Q12 earnings review (Wbn, %) 4Q12P Growth 4Q11 3Q12 Actual KDB Daewoo Consensus YoY QoQ Revenues 2,787 2,196 2,902 3,024 3,188 4.1 32.2 Operating profit 154 113 169 193 178 9.2 49.1 OP margin 5.5 5.1 5.8 6.4 5.6 Pretax profit 76 41 -329 175 125 TTR TTR Net profit 61 33 -219 139 95 TTR TTR Note: Figures are based on consolidated K-IFRS Source: Company data, FnGuide, KDB Daewoo Securities Research estimates

Table 2. Earnings forecast revisions (Wbn, W, %) Previous Revised % change Comments 2012P 2013F 2014F 2012P 2013F 2014F 2012P 2013F 2014F - Reflects 4Q12 earnings, HRSG business Revenues 9,749 9,586 10,065 9,627 9,492 9,967 -1.2 -1.0 -1.0 separation and cash injection Operating profit 613 633 674 595 593 633 -2.9 -6.2 -6.1 Pretax profit 492 617 716 -12 582 632 TTR -5.7 -11.7 Net profit 373 469 537 15 442 474 -96.0 -5.7 -11.7 EPS (W) 3,640 4,543 5,184 309 4,347 4,649 OP margin 6.3 6.6 6.7 6.1 6.2 6.4 Net margin 4.0 5.0 5.5 0.2 4.7 4.8 Source: Company data, KDB Daewoo Securities Research

Table 3. Quarterly earnings forecasts (Wbn, W, %) 2012 2013F 4Q12P growth 2011 2012P 2013F 1Q 2Q 3Q 4QP 1QF 2QF 3QF 4QF QoQ YoY Revenues 2,072 2,456 2,196 2,903 2,051 2,383 2,205 2,853 32.2 4.1 8,496 9,627 9,492 Operating profit 142.7 170.4 113.1 168.6 114.3 158.0 123.0 198.0 49.1 9.2 526 595 593 Pretax profit 113.6 162.2 41.3 -329.5 111.5 155.1 120.2 195.2 TTR TTR 860 -12 582 Net profit 84.2 116.7 32.9 -219.1 84.7 117.9 91.3 148.3 TTR TTR 262 15 442 OP margin 6.6 6.9 5.1 5.8 5.6 6.6 5.6 6.9 6.2 6.2 6.2 Net margin 4.1 4.8 1.5 -7.5 4.1 4.9 4.1 5.2 3.1 0.2 4.7 Note: Figures are based on consolidated K-IFRS / Source: Company data, KDB Daewoo Securities Research

KDB Daewoo Securities Research

February 5, 2013 Company Report

Hankook Tire (161390 KS) Tire

Daewoo Securities Co., Ltd. Solid earnings to overcome concerns about demand Michael Yun +822-768-4169 4Q12 review: OPM of 12.8%, continuing to improve [email protected] Hankook Tire’s 4Q12 revenue and operating profit came in at W1.69tr and W216bn, Young-ho Park respectively (OP margin of 12.8%). 4Q12 OPM is higher than 3Q12 (12.4% OPM), and a +822-768-3033 huge improvement from 4Q11 (8.5% OPM). Earnings improved primarily due to a fall in [email protected] raw material input prices. In 4Q12, natural rubber prices fell 35% YoY and 16% QoQ, and synthetic rubber prices fell by 9% YoY and 2% QoQ. The strong won also boosted improving margins.

4Q12 revenue missed market expectations (W1.8tr). Three factors contributed to the miss: 1) sluggish sales of OE (Original Equipment) at the firm’s Korean plant, 2) slow RE (Replacement Equipment) demand in China, and 3) fewer working days at the firm’s Buy (Maintain) Hungarian plant. Target Price (12M, W) 57,000 Share Price (02/04/13, W) 43,550 Expecting lower raw material prices into 1H13 Expected Return (%) 30.9 We forecast Hankook Tire’s consolidated OP margin to continue to improve in 1H13 due EPS Growth (13F, %) 221.4 to reduced raw material input costs. In 1Q13, we project natural rubber and synthetic ---Market EPS Growth (13F, %) 18.1 rubber prices to further decline by 6% QoQ and 11% QoQ, respectively. We also P/E (13F, x) 7.7 forecast solid 2Q13 OPM (assuming stable raw material prices – no sudden spikes). Market P/E (13F, x) 9.3 From 2H13, we cautiously forecast global tire demand to pick up – this would allow for KOSPI 1,953.21 OPM to continue to improve in the second half. Specifically, we forecast Chinese RE Market Cap (Wbn) 5,395 demand to finally show solid growth in 2H13, and project Hankook Tire’s quarterly OP Shares Outstanding (mn) 124 margin will stabilize at roughly 12% in 2013. Avg Trading Volume (60D, '000) 409 Avg Trading Value (60D, Wbn) 18 Maintain Buy, but Lower TP to W57,000 Dividend Yield (13F, %) 1.4 Free Float (%) 59.2 We maintain our Buy call on Hankook Tire, but lower our 12-month target price by 6.6% 52-Week Low (W) 39,300 to W57,000 (previously W61,000). We lowered our 2013 operating profit estimate by 52-Week High (W) 52,300 1.7% after factoring in a business environment in which tire-price hikes have become Beta (12M, Daily Rate of Return) 0.92 more difficult. However, we do believe an OP margin of around 12% would be Price Return Volatility (12M Daily, %, SD) 2.5 sustainable if raw material prices remain stable. Foreign Ownership (%) 34.3 Hankook Tire’s P/E is trading at 7.7x to 2013 earnings (earnings are at historical lows). Major Shareholder(s) We find the current valuation attractive (despite concerns on global demand) due to: 1) Y.R. Cho et al. (40.82%) the firm’s long-term growth potential in emerging markets, and 2) its increasing market NPS (6.79%) share in advanced markets. Price Performance (%) 1M 6M 12M Absolute -2.1 Relative 0.8

§ Earnings & Valuation Metrics Share price

FY Revenues OP OP Margin NP EPS EBITDA FCF ROE P/E P/B EV/EBITDA 105 KOSPI

(Wbn) (Wbn) (%) (Wbn) (Won) (Wbn) (Wbn) (%) (x) (x) (x) 100

12/10 ------95

12/11 ------90

12/12P 2,306 303 13.1 218 - 443 -1,423 - - 1.9 - 85

12/13F 7,453 941 12.6 700 5,650 1,397 429 20.6 7.7 1.5 5.3 80 12/14F 8,071 1,030 12.8 764 6,166 1,492 762 19.4 7.1 1.3 4.6 10/12 2/13

Note: All figures are based on consolidated K-IFRS; NP refers to net profit attributable to controlling interests Source: Company data, KDB Daewoo Securities Research estimates

Analysts who prepared this report are registered as research analysts in Korea but not in any other jurisdiction, including the U.S.

February 5, 2013 Company Report

Com2uS (078340 KQ) Game

Daewoo Securities Co., Ltd. Smartphone mobile games still in early stages of growth Chang-kwean Kim +822-768-4321 Mobile games spared from “Shutdown Law” [email protected] Mobile games will be exempt from the “Shutdown Law” (a ban on teenagers accessing online games at certain times) for the next couple of years, according to a government announcement. Some lawmakers have even proposed a revised bill that would exclude mobile devices from the ban altogether.

Implementing the ban on mobile games has been a heated issue, as mobile games often do not require users’ personal information, and because it is virtually impossible to regulate games distributed globally through servers located overseas.

The ban has negatively affected investing sentiment on mobile game providers; we thus Buy (Maintain) consider the exemption positive news. Target Price (12M, W) 60,000 4Q disappoints, confirms limitations (but also potential) Share Price (02/04/13, W) 37,800 Com2uS’ 4Q revenues and operating profit came in below our estimates and the market Expected Return (%) 58.7 consensus at W21.2bn (+88.7% YoY; -5.4% QoQ) and W3.7bn (+209.6% YoY; -34.1% EPS Growth (13F, %) 38.0 QoQ), respectively. Market EPS Growth (13F, %) 17.1 P/E (13F, x) 13.5 Poor earnings can primarily be attributed to a 20% QoQ plunge in revenues from the Market P/E (13F, x) 9.3 firm’s flagship social networking game Tiny Farm. Additionally, increased reliance on KOSDAQ 501.32 sales through KakaoTalk (to which Com2uS pays a 19% commission) and higher labor Market Cap (Wbn) 381 costs hurt earnings. 4Q revealed a few negatives (e.g. intense competition among Shares Outstanding (mn) 10 mobile game providers, shorter mobile game lifecycles). However, we also observed Avg Trading Volume (60D, '000) 525 some positives, such as an increasing number of platforms (KakaoTalk, etc.) generating Avg Trading Value (60D, Wbn) 27 new sources of revenue. Dividend Yield (13F, %) 0.0 Free Float (%) 73.3 Maintain Buy, but cut TP to W60,000; Lineup to more than double in 2013 52-Week Low (W) 17,750 Com2uS plans to launch roughly 50 new titles in 2013 (33 developed in-house, 17 52-Week High (W) 76,000 published games). Tiny Pang for Kakao and Akoo’s Puzzle Family for Kakao have both Beta (12M, Daily Rate of Return) 0.59 been performing well since their release in December. Ten new titles (including Golfstar Price Return Volatility (12M Daily, %, SD) 4.1 and Little Legend) are slated to hit the market in 1Q13. The firm also plans to more Foreign Ownership (%) 13.1 aggressively release games on domestic and foreign messaging platforms (e.g. Major Shareholder(s) KakaoTalk and Line). Yl Lee et al. (21.57%) We slashed our 2013F and 2014F EPS by 24.8% and 23.5%, respectively. We do so Storm Venture Associates Ⅱ et al. (7.66%) after incorporating our conservative estimates for Tiny Farm (as evinced by 4Q earnings) Allianz (5.19%) as well as the firm’s hiring plans. We reiterate our Buy rating on the stock, but lower our Price Performance target price from W84,000 to W60,000 in light of our downward earnings revisions. (%) 1M 6M 12M Absolute -24.0 -10.9 87.1

Relative -21.1 -16.5 88.1

§ Earnings & Valuation Metrics Share price FY Revenues OP OP Margin NP EPS EBITDA FCF ROE P/E P/B EV/EBITDA 370 KOSDAQ (Wbn) (Wbn) (%) (Wbn) (Won) (Wbn) (Wbn) (%) (x) (x) (x) 320 12/10 32 3 8.3 4 439 4 0 7.4 30.3 2.1 25.5 270 12/11 36 3 8.2 4 411 5 -1 6.3 53.5 3.1 40.5 220 12/12P 77 16 20.9 21 2,029 17 3 25.2 23.9 5.3 24.6 170 120 12/13F 109 27 25.0 28 2,800 29 17 26.5 13.5 3.2 10.3 70 12/14F 138 39 27.8 39 3,872 40 27 27.8 9.8 2.4 6.8 1/12 5/12 9/12 1/13 Note: All figures are based on consolidated K-IFRS; NP refers to net profit attributable to controlling interests Source: Company data, KDB Daewoo Securities Research estimates

Analysts who prepared this report are registered as research analysts in Korea but not in any other jurisdiction, including the U.S.

February 5, 2013 Com2uS

Table 1. Quarterly earnings and forecasts (W0.1bn, %) 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12P 2011 2012P 2013F Revenues 73 85 91 112 112 220 224 212 362 769 1,093 Domestic 48 45 36 57 57 145 143 145 186 491 651 Overseas 25 40 55 56 55 75 81 67 176 279 442 Revenue Breakdown Domestic 65.5 52.6 39.9 50.6 51.1 66.0 63.8 68.3 51.4 63.8 59.5 Overseas 34.5 47.4 60.0 49.4 48.9 34.0 36.2 31.7 48.6 36.2 40.5 OP 5 10 5 12 3 66 55 37 31 161 273 OP margin 6.3 11.2 5.9 10.5 2.9 29.8 24.7 17.2 8.6 20.9 25.0 NP 6 10 13 12 39 60 75 30 41 207 282 NP margin 8.2 12.0 14.1 11.0 34.6 27.5 33.4 14.2 11.4 27.0 25.9 YoY Growth Revenues -1.6 16.8 22.7 28.8 53.6 157.9 146.0 88.7 17.2 112.4 42.0 Domestic -18.7 -16.4 -24.0 -7.0 19.9 223.5 293.4 154.7 -16.1 163.7 32.6 Overseas 63.5 108.5 106.6 112.5 117.8 85.1 48.5 21.2 101.2 58.2 58.7 OP -51.7 3,300.0 -12.6 15.7 -28.5 586.3 929.6 209.9 19.4 414.8 70.0 NP -61.0 117.0 44.8 -0.3 548.8 489.5 482.7 145.0 0.2 400.4 36.2 QoQ Growth Revenues -16.2 16.6 6.9 23.2 0.0 95.7 2.0 -5.5 Domestic -21.7 -6.4 -18.9 56.4 1.0 152.7 -1.4 1.2 Overseas -3.4 60.3 35.4 1.4 -1.0 36.2 8.6 -17.2 OP -54.9 108.1 -43.7 119.0 -72.2 1,898.1 -15.5 -34.1 NP -51.4 70.7 25.6 -4.2 216.0 55.1 24.1 -59.7 Note: All figures are based on consolidated K-IFRS / Source: Company data, KDB Daewoo Securities Research

Table 2. Earnings forecast revisions (W0.1bn, W, %) Previous Revised % change Comments

2012P 2013F 2014F 2012P 2013F 2014F 2012P 2013F 2014F -Applied conservative assumptions about game Revenues 801 1,215 1,537 769 1,093 1,383 -4.0 -10.0 -10.0 lifecycles into revenues forecasts for existing games (e.g. Tiny Farm) -Assumed surge in fixed costs due to: 1) increase in R&D-related and platform-related Operating profit 189 413 557 161 273 385 -14.8 -33.9 -30.9 (e.g. KakaoTalk) costs, and 2) growing ratio of publishing revenues (a portion of which is distributed to the developers) -Reflected this year’s dividend revenue from Pretax profit 279 432 587 252 332 451 -9.7 -23.1 -23.2 Pangyo office building (W4.8bn) Net profit 233 375 511 205 282 391 -12.0 -24.8 -23.5 EPS (W) 2,309 3,723 5,064 2,029 2,800 3,872 -12.1 -24.8 -23.5 OP margin 23.6 34.0 36.2 20.9 25.0 27.8 NP margin 29.1 30.9 33.2 26.6 25.8 28.3 Note: All figures are based on consolidated K-IFRS / Source: Company data, KDB Daewoo Securities Research

KDB Daewoo Securities Research

Key Universe Valuations February 5, 2013

※All data as of close February 1, 2013, unless otherwise noted.

12F Earnings growth Mkt Cap Price P/E (x) P/B (x) ROE (%) Ticker Company Div Yield OP EPS (Wbn) (W) (%) 12F 13F 12F 13F 12F 13F 12F 13F 12F 13F 005930 Samsung Electronics 212,258 1,441,000 0.5 81.7 22.6 75.0 19.6 11.1 8.8 2.1 1.6 21.6 21.1 005380 Hyundai Motor 45,487 206,500 0.9 7.4 -7.8 11.8 -6.4 7.3 7.4 1.4 1.2 20.8 16.3 005490 POSCO 31,387 360,000 2.7 -36.2 41.3 -21.6 25.9 12.2 10.0 0.7 0.7 6.5 7.8 012330 Hyundai Mobis 28,278 290,500 0.7 8.6 9.6 17.7 1.1 7.9 7.9 1.8 1.5 23.2 19.4 032830 Samsung Life 21,600 108,000 2.0 33.2 0.0 23.0 4.2 18.5 17.8 1.1 1.0 6.2 6.0 000270 Kia Motors 21,079 52,000 1.2 2.3 -16.2 11.5 -11.0 5.9 6.1 1.5 1.1 25.5 18.6 051910 LG Chem 20,047 302,500 1.2 -30.8 25.2 -29.0 19.7 16.1 12.3 2.3 1.9 15.0 15.9 055550 Shinhan Financial Group 19,608 41,350 2.0 -18.2 -1.5 -14.1 2.3 8.1 8.5 0.7 0.7 9.2 8.7 000660 SK Hynix 16,799 24,200 - - - - - 16.1 2.0 1.7 - 10.0 009540 Hyundai Heavy Industries 16,302 214,500 -45.2 34.0 -32.4 17.6 10.6 8.0 1.1 0.9 10.2 11.1 096770 SK Innovation 15,580 168,500 1.7 -38.5 52.8 -62.8 58.3 13.8 8.5 1.1 1.0 7.9 11.5 105560 KB Financial Group 14,990 38,800 1.6 -19.5 3.6 -11.8 3.5 7.2 7.1 0.6 0.6 8.5 8.2 035420 NHN 11,839 246,000 0.2 2.4 29.9 12.8 31.4 21.5 17.8 4.0 3.5 27.9 29.1 066570 LG Electronics 11,783 72,000 0.7 301.4 3.3 - 848.5 199.3 20.6 1.2 1.1 0.5 5.0 023530 Lotte Shopping 11,699 371,500 0.4 -15.3 11.7 8.4 12.6 10.8 9.5 1.1 1.0 7.0 7.4 003550 LG Corp. 10,906 63,200 1.5 13.8 8.8 22.5 9.1 9.6 8.5 1.0 0.9 10.9 10.9 010950 S-Oil 10,718 95,200 3.1 -50.1 97.1 -52.1 121.6 21.2 8.8 2.3 1.8 10.8 21.6 000810 Samsung F&M 10,470 221,000 2.3 12.6 20.2 17.0 19.2 12.2 10.2 1.3 1.1 11.1 11.7 033780 KT&G 10,311 75,100 4.0 -8.8 4.8 -9.6 5.8 15.0 13.2 2.1 1.8 15.0 14.9 034220 LG Display 10,234 28,600 1.0 - 63.8 - 244.1 46.7 12.5 1.1 1.0 2.3 7.8 000830 Samsung C&T 10,076 64,500 1.0 17.1 -19.7 18.8 -19.7 21.1 27.1 1.0 0.9 4.7 3.3 086790 Hana Financial Group 9,528 39,200 2.9 49.3 -19.3 66.0 -32.8 4.4 7.3 0.9 0.5 16.1 9.4 051900 LG Household & Health Care 9,230 591,000 0.5 0.5 35.0 14.8 24.7 38.3 27.6 8.2 6.5 27.2 27.2 010140 Samsung Heavy Industries 8,658 37,500 2.5 0.7 -6.5 15.3 11.2 9.4 1.5 1.3 16.0 15.9 011170 Lotte Chemical 8,415 245,500 0.8 -68.8 78.1 -60.4 63.5 20.2 12.4 1.5 1.3 6.9 11.2 003600 SK Holdings 8,077 172,000 1.1 -28.1 20.1 -35.3 27.3 7.9 5.9 2.1 1.4 9.7 11.2 000720 Hyundai E&C 7,650 68,700 1.0 0.9 18.1 -17.8 29.1 14.9 11.4 1.7 1.5 11.8 13.6 086280 Hyundai Glovis 7,594 202,500 0.9 26.9 11.7 34.4 6.9 20.5 17.5 4.7 3.5 25.2 21.9 004020 Hyundai Steel 7,047 82,600 0.6 -32.1 40.1 6.6 18.6 9.4 7.5 0.8 0.7 8.4 9.1 010130 Korea Zinc 7,020 372,000 0.6 -18.8 24.0 -19.1 30.3 13.4 9.5 2.0 1.5 15.6 17.5 009150 Samsung Electro-Mechanics 6,827 91,400 0.8 89.6 14.3 26.1 18.0 17.5 13.6 2.1 1.7 11.8 12.4 024110 Industrial Bank of Korea 6,661 12,200 3.4 -11.0 -15.4 -13.0 -12.3 6.0 7.1 0.5 0.5 9.3 7.6 035250 Kangwon Land 6,621 30,950 2.9 -17.0 20.5 -18.8 23.3 19.6 16.8 2.4 2.4 13.6 15.6 139480 Emart 6,593 236,500 0.3 56.3 4.1 72.2 3.3 12.6 12.1 1.1 1.0 9.2 8.7 078930 GS 6,495 69,900 1.7 -21.8 67.6 -34.4 64.6 13.4 7.9 1.2 1.0 8.2 12.4 088350 Hanwha Life 6,392 7,360 3.3 - - 11.5 3.5 10.7 10.4 0.9 0.9 8.8 8.6 006400 Samsung SDI 6,378 140,000 1.3 720.9 -87.1 359.7 -57.1 4.8 10.5 1.0 0.8 21.8 8.3 090430 Amorepacific 6,296 1,077,000 0.5 7.3 14.4 -2.4 16.1 26.3 20.1 3.7 2.8 14.1 14.4 028050 Samsung Engineering 6,160 154,000 1.8 0.4 9.5 -0.6 11.1 13.0 10.9 3.3 2.5 32.8 28.4 001800 Orion 5,901 989,000 0.3 37.8 11.7 71.3 17.4 38.5 29.5 7.3 5.5 18.0 18.2 034730 SK C&C 5,225 104,500 1.1 13.3 17.5 4.6 28.4 11.2 8.9 1.8 1.5 18.2 18.9 068270 Celltrion 5,175 25,800 17.2 36.3 1.3 30.2 26.3 20.0 6.5 5.4 17.6 19.2 004940 Korea Exchange Bank 4,882 7,570 2.3 -51.5 -4.8 -55.1 0.0 6.6 6.6 - - - - 097950 CJ CheilJedang 4,769 364,500 0.6 38.2 13.3 5.7 49.7 15.9 2.8 11.0 14.3 001300 Cheil Industries 4,573 87,200 0.8 23.8 24.1 -21.6 58.8 23.7 13.8 1.7 1.4 6.3 9.4 034020 Doosan Heavy I&C 4,531 42,800 7.6 3.2 40.2 24.8 12.4 9.4 1.2 1.1 7.9 9.4 016360 Samsung Securities 4,311 56,400 1.4 9.6 19.4 24.0 18.6 16.8 14.1 1.2 1.1 6.9 7.7 047050 Daewoo International 4,287 37,650 0.6 18.3 10.5 -45.5 13.0 35.2 29.6 5.2 4.2 6.5 7.0 010060 OCI 4,007 168,000 2.0 -77.6 31.9 -86.7 24.8 38.1 31.0 1.2 1.3 3.1 3.9 011210 Hyundai Wia 3,898 151,500 0.9 67.6 3.5 72.6 8.4 10.6 8.6 2.6 1.9 25.5 22.3 Source: KDB Daewoo Research

Market Data February 5, 2013

※All data as of close February 4, 2013, unless otherwise noted.

Other Major Indices Economic Indicators Close Net Chg 1D (%) YTD (%) Close 1D ago 1M ago 1Y ago MSCI Korea* 407.83 -3.83 -0.93 -4.98 USD/KRW 1,092.90 1,088.90 1,063.80 1,118.50 KOSPI 1,953.21 -4.58 -0.23 -3.83 JPY100/KRW 1,177.69 1,186.04 1,216.33 1,467.94 KOSDAQ 501.32 -1.99 -0.40 -0.06 EUR/KRW 1,491.64 1,479.38 1,387.41 1,470.21 Dow Jones* 14,009.79 149.21 1.08 4.45 3Y Treasury 2.76 2.76 2.74 3.38 S&P 500* 1,513.17 15.06 1.01 3.47 3Y Corporate 3.12 3.13 3.23 4.24 NASDAQ* 3,179.10 36.97 1.18 2.15 DDR2 1Gb* 1.16 1.17 1.22 1.34 Philadelphia Semicon* 420.55 7.82 1.89 5.21 NAND 16Gb* 1.93 1.93 1.89 2.72 FTSE 100* 6,347.24 70.36 1.12 5.31 Oil (Dubai)* 110.42 110.46 106.67 109.37 Nikkei 225 11,260.35 69.01 0.62 5.35 Gold* 1,669.40 1,660.60 1,675.80 1,747.10 Hang Seng* 23,721.84 -7.69 -0.03 1.76 Customer deposits (Wbn)* 17,405 16,655 17,075 19,960 Taiwan (Weighted) 7,923.16 67.19 0.86 1.85 Equity type BC (Wbn)(Jan. 31) 93,817 94,026 94,551 102,513 Note: * as of February1, 2013 Source: KSDA, Wisefn, 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 33.37 KODEX 200 47.07 KODEX 200 44.29 Samsung Electronics 54.09 Hyundai Mobis 22.00 LG Electronics 17.09 LG Uplus 13.91 KODEX LEVERAGE 40.08 Hotel Shilla 13.56 Kia Motors 10.50 Samsung Corp. 12.03 HANKOOK TIRE 19.55 Hynix 12.55 Hyundai Motor 8.76 KEPCO 10.99 Kia Motors 11.87 Samsung Electronics (P) 11.35 KEPCO 8.35 KODEX INVERSE 9.94 Shinhan Financial Group 10.27 KT 10.65 Hyundai Eng. & Cosnt. 8.25 CJ Corp. 8.67 KODEX FTSE CHINA A50 9.43 Shinhan Financial Group 10.38 Samsung Corp. 7.32 KT&G 8.24 Samsung SDI 9.02 HANKOOK TIRE 7.96 KT&G 7.00 Daesang Corp. 6.03 LG Household & Health Care 7.56 Hyundai Department Store 7.51 S-Oil 6.69 Hyundai Mobis 5.79 LG Chem 7.55 Lotte Shopping 6.85 Daesang Corp. 6.59 Samsung Life Insurance 5.57 Hyundai Motor 7.42 Source: KSDA, Wisefn

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 Celltrion 10.22 Com2us 8.07 CJ E&M 5.15 Seoul Semiconductor 4.64 Partrion 6.78 Interflex 2.88 SK Broadband 4.21 Wemade 3.72 Wemade 1.98 GOLFZON 0.83 Flexcom 2.00 NEPES 2.18 Seoul Semiconductor 1.88 Kolon Life Science 0.62 Sung Woo HiTech 1.94 Gamevil 1.94 Gamevil 1.52 Silicon Works 0.55 3 NOD Digital 1.66 Partrion 1.47 Koh Young 0.63 Samjung Packing & Aluminum 0.54 Com2us 1.57 Kolon Life Science 1.16 CJ E&M 0.62 Simmtech 0.53 Interflex 1.42 Maeil Dairy Industry 0.91 Daum Communications 0.60 TERA SEMICON 0.51 YG Entertainment 1.33 Samjung Packing & Aluminum 0.88 Maeil Dairy Industry 0.60 AHNLAB 0.50 Techno Semichem 1.07 Chemtronics 0.65 Sung Woo HiTech 0.55 RFTech 0.49 RFTech 0.99 Modetour Network 0.61 Source: KSDA, Wisefn

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 1,437,000 -4,000 211,669 Celltrion 27,100 1,300 4,733 Hyundai Motor 203,500 -3,000 44,826 CJ O Shopping 295,500 600 1,833 POSCO 359,500 -500 31,344 Paradise 19,150 -300 1,742 Hyundai Mobis 291,500 1,000 28,376 SK Broadband 5,100 140 1,509 KEPCO 33,600 350 21,570 Seoul Semiconductor 25,700 -1,500 1,498 Samsung Life Insurance 106,500 -1,500 21,300 Daum Communications 105,700 700 1,427 Kia Motors 50,700 -1,300 20,552 CJ E&M 35,200 500 1,335 LG Chem 302,500 0 20,047 GS Home Shopping 180,000 -600 1,181 Samsung Electronics (P) 864,000 12,000 19,728 Dongsuh 18,550 -250 1,098 Shinhan Financial Group 41,000 -350 19,442 POSCO ICT 7,210 -110 988 Source: Korea Exchange