September 2, 2015

KOREA

Sector News & Analysis Major Indices Close Chg Chg (%) Auto (Overweight) KOSPI 1,915.22 0.99 0.05 August global production KOSPI 200 229.91 0.36 0.16 KOSDAQ 678.02 5.08 0.75

Turnover ('000 shares, Wbn) Volume Value KOSPI 338,567 4,953 KOSPI 200 78,426 3,597 KOSDAQ 481,696 3,174

Market Cap (Wbn) Value KOSPI 1,196,975 KOSDAQ 188,630

KOSPI Turnover (Wbn) Buy Sell Net Foreign 1,388 1,476 -88 Institutional 962 898 65 Retail 2,529 2,559 -30

KOSDAQ Turnover (Wbn) Buy Sell Net Foreign 217 192 25 Institutional 109 175 -65 Retail 2,836 2,795 41

Program Buy / Sell (Wbn) Buy Sell Net KOSPI 1,267 1,187 80 KOSDAQ 50 49 0

Advances & Declines Advances Declines Unchanged KOSPI 352 449 61 KOSDAQ 590 443 57

KOSPI Top 5 Most Active Stocks by Value (Wbn) Price (W) Chg (W) Value Electronics 1,090,000 5,000 339 KODEX INVERSE 8,795 -70 286 KODEX LEVERAGE 8,870 35 220 Hyundai Motor 151,500 5,000 171 Hynix 34,350 -50 141

KOSDAQ Top 5 Most Active Stocks by Value (Wbn) Price (W) Chg (W) Value KICA 14,250 2,900 201 NICE e-Banking Services 8,000 -110 151 Neo Wave 4,610 380 120 KOREIT 18,650 2,600 75 Crosscert 6,070 1,395 68 Note: As of September 2, 2015

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.

Auto (Overweight/Maintain)

August global production

¢ In August, exports fell more sharply MoM than domestic sales due to inventory pressures Sector Update ¢ Overseas production remained weak, although HMC fared relatively better due to September 2, 2015 early launch of price discounts ¢ Key focus now is impact of tax cut and won depreciation; Our preferred stock is

Daewoo Securities CCo.,o., Ltd. Exports fell more sharply MoM than domestic sales due to inventory pressures [Auto/Auto Parts/Tire] Domestically, there were six to seven fewer working days in August than in July due to the Michael Yun +822-768-4169 summer holidays. For the month, Hyundai Motor (HMC) had 16 working days, while Kia Motors [email protected] (Kia) had 15 (vs. 22 days in July). As a result, domestic sales and exports at both companies declined sharply MoM. GM Korea was the only domestic automaker to post higher domestic Young-ho Park +822-768-3033 sales MoM, which we attribute to strong demand for the newest Chevrolet Spark model. [email protected] Compared to August 2014 (which had a similar number of working days), HMC saw relatively

solid exports, while Kia recorded robust domestic sales, driven by SUVs and new models. On the other hand, we believe Kia was more heavily affected by sagging sales in emerging markets and inventory pressures than HMC.

Overseas production remains weak

Overseas production continued to weaken YoY. On a MoM basis, however, overseas production contrasted sharply, increasing 19.7% at HMC, but declining 7.7% at Kia. We believe this was largely due to the difference in the two companies’ China performance. HMC launched a massive discount campaign on older models two weeks ahead of Kia, and thus benefited more from the price cuts.

In addition to huge discounts, both companies have been increasing the mix of fleet (corporate) sales, which should lead to a pickup in China utilization from September. Still, given the continued weakness of overall demand and margin squeeze, operating performance in China is unlikely to meaningfully recover.

Table 111.1. JulyJulyJuly-July ---AugusAugusAugustt production vs. 333Q153Q15 forecasts (HMC & Kia) (units, %) JulyJulyJuly-July ---AugustAugust production (A)(A)(A) 3Q15 forecast (B)(B)(B) (A)/(B)*100

HMC Domestic 111,055 162,831 68.2 Exports 176,574 260,795 67.7

Korea total 287,629 423,626 67.9

Overseas total 439,585 715,370 61.4

Global production 727,214 1,138,996 63.8

Global sales N/A 1,208,860 Kia Domestic 89,942 113,626 79.2 Exports 173,243 270,100 64.1

Korea total 263,185 383,726 68.6

Overseas total 167,311 310,150 53.9

Global production 430,496 693,876 62.0

Global sales N/A 717,022 Source: Company data, KDB Daewoo Securities Research

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

Key Universe Valuations September 2, 2015

※All data as of close September 1, 2015, unless otherwise noted.

15F Earnings growth Mkt Cap Price P/E (x) P/B (x) ROE (%) Ticker Company Div Yield OP EPS (Wbn) (W) (%) 15F 16F 15F 16F 15F 16F 15F 16F 15F 16F 005930 160,556 1,090,000 1.4 5.4 5.9 -9.1 8.2 8.8 8.2 1.0 0.9 12.3 12.0 005380 Hyundai Motor 33,372 151,500 2.4 -11.9 8.0 -7.1 2.1 6.3 6.2 0.7 0.6 11.4 10.7 015760 KEPCO 30,590 47,650 2.3 56.6 4.5 266.6 -47.6 3.1 5.9 0.5 0.5 16.9 7.9 000660 SK Hynix 25,007 34,350 1.2 4.7 -7.4 0.3 -6.5 5.9 6.3 1.1 1.0 21.2 16.6 090430 AmorePacific 21,162 362,000 0.3 42.2 37.5 56.2 35.3 42.2 31.2 7.5 6.2 19.2 21.7 012330 20,150 207,000 1.6 -10.7 11.1 -10.7 15.1 6.6 5.7 0.8 0.7 12.4 12.8 000270 Kia Motors 20,106 49,600 2.3 -4.4 25.0 -0.3 14.9 6.7 5.9 0.8 0.8 13.0 13.7 017670 SK Telecom 19,863 246,000 4.1 3.5 7.3 5.2 5.1 10.5 10.0 1.2 1.1 12.8 12.6 018260 Samsung SDS 19,577 253,000 0.2 14.3 13.8 12.4 12.2 42.2 37.6 4.4 3.9 10.8 11.0 032830 Samsung Life 19,500 97,500 - - - - 0.0 0.0 034730 SK Holdings 18,997 270,000 0.7 23.2 9.0 356.4 4.3 23.2 22.3 3.9 3.4 22.7 19.8 055550 18,660 39,350 - - - - 0.0 0.0 005490 POSCO 15,999 183,500 4.4 -9.6 30.8 124.5 65.9 11.4 6.9 0.4 0.4 3.4 5.5 035420 NAVER 15,361 466,000 0.2 12.7 34.4 32.0 35.5 25.6 18.9 4.7 3.8 28.8 29.4 051910 LG Chem 15,143 228,500 1.8 48.1 15.3 55.4 24.0 12.5 10.1 1.3 1.2 10.6 12.0 033780 KT&G 14,278 104,000 3.5 13.5 -5.2 23.2 -11.1 14.0 15.8 2.2 2.0 17.2 14.0 105560 KB Financial Group 13,715 35,500 - - - - 0.0 0.0 000810 Samsung F&M 12,696 268,000 - - - - 0.0 0.0 051900 LG Household & Health Care 12,229 783,000 0.6 34.8 20.3 34.4 22.6 29.6 24.1 6.8 5.5 26.1 26.0 003550 LG Corp. 10,008 58,000 1.7 23.9 10.0 22.8 7.3 9.8 9.2 0.8 0.7 8.3 8.3 010130 Korea Zinc 9,312 493,500 1.3 3.2 17.4 9.4 17.6 17.0 14.4 1.8 1.6 11.3 12.0 096770 SK Innovation 9,219 99,700 3.2 - -29.2 - -27.6 6.8 9.4 0.6 0.5 8.8 6.0 023530 Lotte Shopping 9,006 286,000 0.5 11.3 12.6 37.8 13.4 11.9 10.5 0.5 0.5 4.4 4.8 047810 KOREA AEROSPACE 8,929 91,600 0.3 88.3 31.0 109.1 33.4 38.4 28.8 7.2 5.8 20.4 22.3 035250 8,793 41,100 2.7 16.8 12.2 25.3 14.2 19.5 17.1 2.8 2.5 15.8 16.4 011170 Lotte Chemical 8,329 243,000 0.4 348.5 0.4 696.9 6.9 7.1 6.7 1.1 1.0 16.7 15.3 034220 LG Display 8,176 22,850 2.2 47.9 -31.3 49.9 -30.2 6.0 8.6 0.7 0.6 11.4 7.4 086790 8,066 27,250 - - - - 0.0 0.0 035720 Daum 7,679 128,100 0.1 -42.7 105.4 -75.3 115.3 84.8 39.4 3.0 2.8 3.6 7.4 000830 Samsung C&T 7,514 48,100 1.2 -19.4 12.2 61.9 9.6 17.6 16.1 0.6 0.5 3.3 3.5 030200 KT 7,507 28,750 1.7 - 2.1 - -15.8 9.6 11.4 0.6 0.6 7.3 5.8 009240 Hanssem 7,413 315,000 0.3 35.1 34.9 35.3 34.3 63.2 47.1 15.6 12.0 30.8 31.8 024110 7,400 13,300 - - - - 0.0 0.0 066570 LG Electronics 7,209 44,050 1.4 -40.8 56.2 31.8 84.9 15.1 8.2 0.7 0.6 4.5 7.9 19745. 009540 7,106 93,500 - - - - 13.6 0.4 0.4 - 3.4 0 088350 Hanwha Life 6,801 7,830 - - - - 0.0 0.0 004020 6,779 50,800 1.5 10.8 4.8 44.4 -4.6 5.4 5.6 0.4 0.4 7.8 7.0 010950 S-Oil 6,609 58,700 4.6 - -24.6 - -22.9 7.2 9.4 1.2 1.1 17.8 12.2 086280 6,394 170,500 1.2 3.7 12.3 -16.5 30.0 14.3 11.0 2.1 1.8 15.3 17.5 139480 Emart 6,342 227,500 0.7 -2.7 25.8 111.3 -18.2 10.3 12.7 0.9 0.8 8.7 6.7 021240 Coway 6,239 80,900 3.4 21.1 12.9 30.7 11.9 19.1 17.1 5.2 4.6 31.0 31.8 006400 Samsung SDI 5,756 83,700 1.2 -73.3 859.1 - 45.4 26.9 18.5 0.5 0.5 1.9 2.7 051600 KEPCO KPS 5,625 125,000 - - - - 0.0 0.0 001800 Orion 5,462 914,000 0.7 13.3 2.7 16.9 10.7 28.6 25.8 3.9 3.4 14.6 14.4 032640 LG Uplus 5,239 12,000 2.3 26.4 0.7 80.3 3.9 12.7 12.3 1.2 1.1 9.5 9.3 097950 CJ CheilJedang 5,090 387,000 0.6 45.4 11.4 201.6 19.3 20.1 16.9 1.7 1.6 9.1 10.1 007070 GS Retail 4,782 62,100 1.0 69.0 25.0 67.0 24.3 25.7 20.7 2.6 2.4 10.6 12.1 008770 4,631 118,000 0.3 39.1 87.5 67.2 124.2 38.4 17.1 5.7 4.3 15.8 28.7 15814. 009150 Samsung Electro-Mechanics 4,601 61,600 0.8 28.9 -73.9 74.0 36.4 20.9 1.1 1.0 2.9 5.1 8 161390 4,577 36,950 1.1 -21.0 13.2 -12.4 12.7 7.5 6.6 0.9 0.8 12.9 13.0 Source: KDB Daewoo Securities Research

Market Data September 2, 2015

※All data as of close September 2, 2015, unless otherwise noted.

Other Major Indices Economic Indicators Close Net Chg 1D (%) YTD (%) Close 1D ago 1M ago 1Y ago MSCI Korea* 333.82 -1.52 -0.45 -13.67 USD/KRW 1,175.60 1,183.00 1,166.30 1,014.30 KOSPI 1,915.22 0.99 0.05 -0.58 JPY100/KRW 982.86 975.91 939.28 972.25 KOSDAQ 678.02 5.08 0.75 22.45 EUR/KRW 1,328.13 1,327.15 1,275.41 1,331.88 Dow Jones* 16,058.35 -469.68 -2.84 -9.95 3Y Treasury 1.70 1.73 1.77 2.51 S&P 500* 1,913.85 -58.33 -2.96 -7.01 3Y Corporate 1.97 1.99 2.01 2.88 NASDAQ* 4,636.10 -140.41 -2.94 -1.92 DDR2 1Gb* 1.15 1.15 1.17 1.56 Philadelphia Semicon* 590.12 -20.92 -3.42 -14.07 NAND 16Gb* 1.52 1.52 1.63 2.40 FTSE 100* 6,058.54 -189.40 -3.03 -7.47 Oil (Dubai)* 51.20 48.22 53.13 101.37 Nikkei 225 18,095.40 -70.29 -0.39 3.94 Gold* 1,139.30 1,132.00 1,094.90 1,286.50 Hang Seng* 21,185.43 -485.15 -2.24 -11.20 Customer deposits (Wbn)* 22,256 20,915 20,795 16,075 Taiwan (Weighted) 8,035.29 17.73 0.22 -13.36 Equity type BC (Wbn)(Aug. 31) 79,814 79,704 77,730 77,130 Note: * as of September 1, 2015 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 18.87 Amore Pacific 24.31 Hyundai Motor 47.91 Hynix 22.74 Hyundai Motor 15.84 Hynix 17.54 Kia Motors 34.43 SK C&C 19.06 LG Uplus 11.20 Lotte Shopping 14.61 Lotte Shopping 19.12 NHN 18.99 KOREA AEROSPACE 10.10 KEPCO 12.76 Samsung Electronics 17.64 KODEX INVERSE 15.82 NCsoft 8.86 Lotte Confectionary 12.25 Amore Pacific 16.74 Hanmi Pharm 15.62 Kia Motors 8.85 SK Telecom 12.10 SK Telecom 16.72 Woongjin Coway 9.99 SEMCO 6.34 KT&G 11.78 13.31 BGF Retail 8.61 Daou Tech. 6.20 Samsung SDI 10.86 Hyundai Mobis 10.19 Hanwha 7.28 KT 5.65 Kangwon Land 9.78 KODEX LEVERAGE 8.18 Hana Tour 6.84 Kolon Ind. 5.38 GS Retail 8.05 KT&G 8.15 HYUNDAILIVART 6.25 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 ViroMed 3.02 Daum Communications 16.97 Daum Communications 3.64 Sansung P&C 8.29 CJ E&M 2.51 Interpark 2.10 YG Entertainment 3.40 Medy-tox 4.86 Sansung P&C 2.34 Bio-Smart 2.08 CJ O Shopping 2.40 ViroMed 4.78 ASTK 2.29 2.08 MCNEX 2.10 Modetour Network 4.16 Dongsuh 2.10 Medy-tox 1.88 KEBT 1.57 Vieworks 2.96 Modetour Network 2.09 MCNEX 1.39 CJ E&M 1.41 Korea Information Service 2.72 Wemade 2.06 Leeno 1.17 ASTK 1.38 Paradise 2.41 KICA 1.93 China King 1.13 Neowis Internet 1.08 SEEGENE 2.32 SEEGENE 1.67 i-SENS 0.91 CrucialTec 0.92 SM 1.96 Korea Information Service 1.52 Lotvacuum 0.90 HY-LOK Corp. 0.86 KCP 1.95 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 1,090,000 5,000 160,556 Celltrion 71,000 700 7,954 Hyundai Motor 151,500 5,000 33,372 Daum Communications 128,100 -2,400 7,679 KEPCO 47,650 -850 30,590 Dongsuh 43,200 200 4,307 Hynix 34,350 -50 25,007 CJ E&M 82,000 2,600 3,176 CHEIL INDUSTRIES 173,500 3,500 23,423 Medy-tox 470,000 -14,600 2,659 Amore Pacific 362,000 -1,500 21,162 LOEN 92,900 -2,700 2,350 Hyundai Mobis 207,000 4,000 20,150 Paradise 22,800 -100 2,073 Kia Motors 49,600 1,550 20,106 ViroMed 139,900 -4,900 1,986 Samsung Electronics (P) 870,000 9,000 19,865 Com2us 105,800 2,400 1,361 SK Telecom 246,000 3,000 19,863 GS Home Shopping 199,600 -2,200 1,310 Source: