November 10, 2014

KOREA

Company News & Analysis Major Indices Close Chg Chg (%) Life (032830/Buy/TP: W135,000) Raise TP KOSPI 1,958.23 18.36 0.95 The paradox of negative spreads KOSPI 200 250.64 3.25 1.31 KOSDAQ 539.22 -0.68 -0.13 Daum Communications (035720/Buy/TP: W172,000) Lower TP Biggest X factor is Bank Wallet Turnover ('000 shares, Wbn) Volume Value Kangwon Land (035250/Buy/TP: W45,000) KOSPI 308,267 4,422 VIP normalization to continue into 4Q KOSPI 200 65,283 3,376 KOSDAQ 356,039 1,974

Toray Chemical Korea (008000/Buy/TP: W17,000) Market Cap (Wbn) Solid 3Q results despite challenging macro conditions Value KOSPI 1,172,205 KOSDAQ 139,174 Economy & Strategy Update KOSPI Turnover (Wbn) Fixed Income Weekly Buy Sell Net Policy expectations to remain intact Foreign 1,264 1,226 38 Institutional 1,046 1,047 0 Retail 2,016 2,095 -80

KOSDAQ Turnover (Wbn) Buy Sell Net Foreign 135 164 -29 Institutional 85 116 -31 Retail 1,751 1,687 64

Program Buy / Sell (Wbn) Buy Sell Net KOSPI 729 721 8 KOSDAQ 28 29 -1

Advances & Declines Advances Declines Unchanged KOSPI 418 413 52 KOSDAQ 516 431 68

KOSPI Top 5 Most Active Stocks by Value (Wbn) Price (W) Chg (W) Value 1,268,000 62,000 443 KODEX LEVERAGE 10,690 215 274 Hyundai Motor 166,500 4,500 264 KODEX INVERSE 8,065 -85 99 238,000 1,000 81

KOSDAQ Top 5 Most Active Stocks by Value (Wbn) Price (W) Chg (W) Value Daum Communications 139,300 4,100 98 Com2us 159,100 7,700 95 Agabang 8,160 360 67 Soribada 6,240 810 42 Bio Space 26,300 -4,400 33 Note: As of November 7, 2014

Samsung Life (032830 KS) The paradox of negative spreads

Insurance 3Q review: Net profit of W297bn (+34.3% YoY); Loss ratio improves notably Samsung Life announced 3Q net profit of W297bn , beating our estimate of W261.7bn. Results Comment The difference was due to one-time items, including a penalty reversal (+W52.6bn) and November 10, 2014 provisioning for suicide payouts (-W20bn). Positives included a smaller decline in the negative spread and continued improvement in loss ratio. That said, it remains to be

seen whether the loss ratio decline is part of a secular trend, as management stated the (Maintain) Buy 3Q fall was due to the expiration of unprofitable plans and a sharp decline in thyroid cancer payouts.

Target Price (12M, W) 135,000 Bond valuation gains offset a decrease in the value of the insurer’s Samsung Electronics (SEC) stake, pushing up the RBC ratio to 389% (vs. 379% in 2Q). Share Price (11/07/14, W) 116,500 Efforts to offset negative spreads are starting to pay off Expected Return 16% We expect a relatively solid quarter in 4Q, supported by 1) equity-method profit from Samsung Card (which is expected to recognize gains from the sale of its

shares), and 2) minimal year-end reserves (Samsung Life already set aside all of its OP (14F, Wbn) 744 required IBNR reserves and has little reserve requirements for variable policies). Consensus OP (14F, Wbn) 762 Paradoxically, negative spreads appear to be having some positive effects on life EPS Growth (14F, %) 81.4 insurers. Because l ife insurers have limited power to improve negative spreads on their Market EPS Growth (14F, %) 2.4 own, they have been attempting to offset the impact by 1) improving their expense P/E (14F, x) 16.4 ratios through restructuring, and 2) boosting mortality profits through protection-type Market P/E (14F, x) 12.5 new business. Such efforts are starting to pay off. We believe Samsung Life will have KOSPI 1,939.87 little trouble achieving its aggressive 10% protection-type new business growth target.

Market Cap (Wbn) 23,300 Retain Buy and Raise TP to W135,000; Better positioned to raise dividend payout Shares Outstanding (mn) 200 Free Float (%) 45.5 As industry growth slows, insurance stocks are increasingly resembling utilities, which are characterized by maturing demand, declining capex requirements, and substantial Foreign Ownership (%) 15.2 retained earnings. Thus, we believe it makes sense that investor s are evaluating insurers Beta (12M) 1.36 based on their ability to return cash to shareholders. 52-Week Low 92,100 52-Week High 119,000 In our view, insurers with good capital adequacy and profit-generating ability are better positioned to raise their dividend payouts . Samsung Life has the highest capital (%)(%)(%) 1M1M1M 6M6M6M 12M12M12M adequacy in the sector, and should cont inue to deliver stable profits on the back of Absolute 9.9 26.5 12.0 restructuring effects and an improving loss ratio. We expect the insurer to steadily raise Relative 11.8 26.5 15.7 its dividend payout, in line with regulatory authorities’ plan to loosen restrictions on

120 Samsung Life KOSPI distributable dividends for insurers maintaining a high RBC ratio after the formula is 110 tightened in 2016.

100 We maintain Buy on Samsung Life and raise our target price by 8% to W135,000 (from 90 W125,000), as we modestly revised up our 2015F profit to reflect the declining loss 80 ratio, and reduced the discount rate to 9% from 9.5% in light of lower bond yields. 70 11.13 3.14 7.14 11.14 FY (Dec.) 03/12 03/13 12/13 12/14F 12/15F 12/16F Direct Premiums (Wbn) 22,864 30,755 19,601 26,935 28,747 30,607 Daewoo Securities CCo.,o., Ltd. OP (Wbn) 556 532 134 744 706 784 NP (Wbn) 948 984 586 1,418 1,298 1,355 [Securities/Insurance] EPS (W) 4,742 4,922 2,932 7,092 6,490 6,776

Gil-won Jeong BPS (W) 90,566 108,652 98,183 109,963 119,123 128,700 +822-768-3256 P/E (x) 20.9 21.2 34.3 16.4 18.0 17.2 [email protected] P/B (x) 1.1 1.0 1.0 1.1 1.0 0.9

Ju-hyun Kim ROE (%) 5.7 4.9 2.8 6.5 6.0 5.6 +822-768-4149 Dividend Yield (%) 2.0 1.4 0.8 1.7 1.7 2.1 [email protected] Stockholder’s Equity (Wbn) 18,113 21,730 19,637 21,993 23,825 25,740

Note: All figures are based on consolidated K-IFRS; NP refers to net profit attributable to controlling interests; 12/13 figures are based on 9-month period due to changes in accounting standards

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 t he U.S. PLEASE SEE ANALYST CERTIFICATIONS AND IMPORTANT DISCLOSURES & DISCLAIMERS IN APPENDIX 1 AT THE END OF REPORT.

Daum Communications (035720 KQ) Biggest X factor is Bank Wallet Kakao

Internet 3Q review: A disappointing quarter For 3Q, Daum Kakao announced revenue of W221.8bn (+20.7% YoY) and operating Results Comment profit of W30.8bn (-6% YoY) on a combined basis. Earnings were eroded by one-off November 10, 2014 operating expenses (W20.3bn) associated with the merger (e.g., advisor fees, commissions, bonus payouts, share-based compensation, etc.). The company also

booked a W22.6bn impairment loss on intangible assets as part of a post-merger asset (Maintain) Buy revaluation process. But what was more disappointing were the poor performances of the new services Target Price (12M, W) 172,000 launched by Kakao in 2Q-3Q (including the Today’s Recommendation and performance- based ad services). Moreover, we had originally anticipated the company to see higher Share Price (11/7/14, W) 135,200 commissions after the KakaoTalk gifting service’s switch to direct operation in July. We had also expected positive effects from the recent change in B2B emoticon ad pricing. Expected Return 27% However, Kakao’s 3Q ad revenue rose a meager 7.3% QoQ, while e-commerce revenue fell 11.9% QoQ.

OP (14F, Wbn) 100 Highly anticipated Bank Wallet Kakao service to go online November 11 th Consensus OP (14F, Wbn) 161 Daum Kakao’s short-term stock performance will likely hinge on the results of its new EPS Growth (14F, %) -63.6 Bank Wallet Kakao service, which is set to be launched on November 11 th . Looking at Market EPS Growth (14F, %) 2.4 previously launched services, Kakao Game Center currently boasts 16mn monthly uniq ue P/E (14F, x) 76.4 visitors, while KakaoStory maintains about 18mn monthly unique visitors. KakaoPay, the Market P/E (14F, x) 12.5 credit card payment service that debuted on September 5 th , has reportedly attracted KOSDAQ 539.90 1.2mn users in its first month. Market Cap (Wbn) 7,647 It is unclear how secure Bank Wallet Kakao will b e or how many merchants have signed Shares Outstanding (mn) 57 up for the service. Still, we are optimistic on several of its features, such as inter-user Free Float (%) 56.2 money transfers. We also feel KakaoTalk’s emoticon-gifting service could serve as a Foreign Ownership (%) 17.8 powerful marketing tool for Bank Wallet. In sum, we believe Bank Wallet Kakao could do Beta (12M) 0.37 surprisingly well, possibly attracting over 5mn users in its first month of service. 52-Week Low 68,700 52-Week High 177,100 Maintain Buy, but Cut TP to W172,000 (%)(%)(%) 1M1M1M 6M6M6M 12M12M12M We lower our 2015 revenue and EPS estimates by 10.3% and 18.2%, respectively, Absolute -13.8 82.7 54.9 reflect ing several variables confirmed in the 3Q earnings report. Accordingly, we cut our Relative -10.1 86.2 49.3 target price to W172,000 (from W211,000). Our target multiple remains unchanged at a 2015F P/E of 40x, close to the average of the upper bounds of the historical bands of 220 Daum Communications KOSDAQ NAVER and Daum during their high-growth periods.

170 The listing of Kakao stock option shares (post-exercise), originally expected in late October, appears to have been pushed back to mid-November. (3.6-3.8mn out of a total 120 of 4.53mn are anticipated to be listed.) Meanwhile, Daum Kakao is anticipated to be th 70 added to the MSCI Korea index on November 26 . 11.13 3.14 7.14 11.14

Daewoo Securities CCo.,o., Ltd. FY (Dec.) 12/11 12/12 12/13 12/14F 12/15F 12/16F Revenue (Wbn) 421 453 531 649 1,092 1,427 [Internet/Game/Entertainment] OP (Wbn) 117 102 82 100 328 444

Chang-kwean Kim OP margin (%) 27.8 22.5 15.4 15.4 30.0 31.1 +822-768-4321 NP (Wbn) 108 76 66 43 244 340 [email protected] EPS (W) 8,079 5,656 4,862 1,770 4,317 6,020 ROE (%) 26.9 15.7 12.5 7.8 37.2 38.4 Jeong-yeob Park +822-768-4124 P/E (x) 14.9 16.1 17.3 76.4 31.3 22.5 [email protected] P/B (x) 3.5 2.4 2.0 12.8 9.9 7.3 Notes: All figures are based on consolidated K-IFRS; NP refers to net profit attributable to controlling interests; earnings in 4Q14 and beyond are based on combined earnings of Daum and Kakao 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 t he U.S. PLEASE SEE ANALYST CERTIFICATIONS AND IMPORTANT DISCLOSURESDISCLOSURES & DISCLAIMDISCLAIMERSERS IN APPENDIX 1 AT THE END OF REPORT.

Kangwon Land (035250 KS) VIP normalization to continue into 4Q

Entertainment 3Q review: Earnings slightly miss expectations, but solid overall For 3Q, Kangwon Land reported revenue of W374.4bn (+5.2% YoY) and operating profit Results Comment of W135.2bn (-1.8% YoY). Revenue growth fell short of our expectation (+9% YoY). November 10, 2014 The number of overall visitors fell 3.6% YoY to 830,000 in 3Q due to fewer general visitors , caused by the admissions price hike made earlier in the year (from W5,000 to W7,500). However, other casino earnings indicators continued to improve, including a (Maintain) Buy higher table turnover (boosted by capacity additions), and increased drop per head (overall drop was up 5.5% YoY and revenue per visitor was up 10.2% YoY). Non-casino Target Price (12M, W) 45,000 revenue, on the other hand, shrank 6.6% YoY, as the number of group tourists fell due to the impact of the Sewol ferry accident. Share Price (11/07/14, W) 33,250 Overall growth was driven by the VIP segment, which appears to be normalizing from Expected Return 35% several setbacks (celebrity gambling scandals and audits of weekday visits by public officials). VIP table revenue grew 21% YoY in 3Q, accounting for 17.6% of overall casino

revenue (up from 15.4% in 3Q13). OP (14F, Wbn) 499 Consensus OP (14F, Wbn) 509 COGS and SG&A ex penses increased 8.6% and 22% YoY, respectively, affected by a Chuseok bonus payout and a W6bn employee welfare fund contribution. EPS Growth (14F, %) 32.1 Market EPS Growth (14F, %) 2.4 VIP growth to boost profit margins in 4Q P/E (14F, x) 18.1 The increased mix of VIP table revenue, which has recovered to the 17% level sin ce Market P/E (14F, x) 12.5 1Q14 (from 14.2% in 4Q13), should drive margins higher in 4Q14. We also see a KOSPI 1,939.87 potential boost from Chinese visitors, which are expected to increase sharply in the Market Cap (Wbn) 7,114 upcoming winter season thanks to the adoption of the 72-hour visa waiver program at Shares Outstanding (mn) 214 Yangyang International Airport. Free Float (%) 58.4 Foreign Ownership (%) 26.7 Another positive should be the dissipation of the one-off contingent liability (W54.2bn) Beta (12M) 0.81 recorded in 4Q13 in relation to the “ordinary wages” lawsuit filed by the labor union. 52-Week Low 28,100 Altogether, we forecast 4Q revenue and operating pro fit to expand 10.6% and 154.1% 52-Week High 36,500 YoY, respectively.

(%)(%)(%) 1M1M1M 6M6M6M 12M12M12M Maintain Buy and TP of W45,000; 2014F dividend yield of 2.9% Absolute -1.0 15.5 3.9 Out of the casino’s 200 tables, the 33 tables that remain idle because of a shortage of Relative 0.6 15.5 7.3 dealers are expected to become operational in 2015, pointing to more room for growth.

130 Kangwon Land KOSPI We keep our Buy call and target price of W45,000 on Kangwon Land. Our target price is 120 based on our 2015F DPS of W1,100, divided by a dividend yield of 2.5%, the stock’s 110 median dividend yield during the past decade. 100

90

80 11.13 3.14 7.14 11.14

Daewoo Securities CCo.,o., Ltd. FY (Dec.) 12/11 12/12 12/13 12/14F 12/15F 12/16F Revenue (Wbn) 1,266 1,296 1,361 1,494 1,571 1,665 [Internet/Game/Entertainment] OP (Wbn) 490 405 388 499 535 563

Chang-kwean Kim OP margin (%) 38.7 31.3 28.5 33.4 34.1 33.8 +822-768-4321 NP (Wbn) 381 306 298 393 441 472 [email protected] EPS (W) 1,782 1,431 1,391 1,838 2,060 2,205 ROE (%) 17.5 13.2 12.2 14.9 15.3 15.1 Jeong-yeob Park +822-768-4124 P/E (x) 15.3 20.4 22.2 18.1 16.1 15.1 [email protected] P/B (x) 2.4 2.5 2.5 2.4 2.2 2.1 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 t he U.S. PLEASE SEE ANALYST CERTIFICATIONS AND IMPORTANT DISCLOSURES & DISCLAIMERS IN APPENDIX 1 AT THE END OF REPORT.

Toray Chemical Korea (008000 KS) Solid 3Q results despite challenging macro conditions

Chemicals 3Q review: OP beats despite challenging environment Toray Chemical Korea’s 3Q operating profit came in at W11.1bn, exceeding our Results Comment expectation. The solid performance was differentiated from those of industry peers , November 10, 2014 which have reported weak earnings amid a sluggish economy. The filter and fiber divisions maintained high margins despite unfavorable macro conditions, thanks to the

industries’ oligopolistic market conditions. In particular, filter revenue has been (Maintain) Buy increasing rapidly at the Chinese subsidiary, benefiting from China’s growing water treatment market. Target Price (12M, W) 17,000 That said, Toray Chemical swung to a small pretax loss in 3Q, hit by W9bn in one-offs , including 1) prepayment penalties due to loan refinancing, 2) costs related to the exit of Share Price (11/07/14, W) 12,600 the optical film business, and 3) the meta-aramid settlement with DuPont . However, the company now should be able to save W5.6bn in annual interest expenses, as well as Expected Return 35% eliminate W4bn in annual losses from the optical film business. Furthermore, the settlement with DuPont has removed potential uncertainties that may otherwise have OP (14F, Wbn) 35 arisen in the aramid business. We thus see the one-off costs as part of the company’s Consensus OP (14F, Wbn) 34 ongoing turnaround.

EPS Growth (14F, %) -61.6 Robust 4Q outlook for film and filter; Earnings to gather full steam in 2015 Market EPS Growth (14F, %) 2.4 We expect 4Q operating profit to remain solid at around W9.6bn. Fiber revenue is likely P/E (14F, x) 98.3 to decline as feedstock prices fall on lower oil prices, but margins should remain healthy , Market P/E (14F, x) 12.5 as downside to ASP should be limited given the oligopolistic nature of the market . Filter KOSPI 1,939.87 revenue should steadily grow, led by China. In the optical film division, losses should Market Cap (Wbn) 584 start to narrow due to the business withdrawal. Shares Outstanding (mn) 46 Looking ahead to 2015, earnings should grow full steam on the back of 1) a pickup in Free Float (%) 43.1 loss-making businesses, namely microfiltration (MF) membranes and meta-aramid, and Foreign Ownership (%) 5.8 2) stronger sales capabilities of the filter and fiber businesses. Beta (12M) 0.33 52-Week Low 10,150 Latest pullback offers entry point; Our top pick in small/mid-cap chemicals 52-Week High 15,450 Toray Chemical’s share price has recently pulled back, hurt by 1) the broader stock (%)(%)(%) 1M1M1M 6M6M6M 12M12M12M market correction, 2) lack of near-term momentum, and 3) concerns over one-time Absolute -9.7 -9.4 18.9 expenses in 3Q. However, the company has defied the challenging macro conditions in Relative -8.1 -9.4 22.8 3Q, and growth prospects have increased thanks to the removal of the one-offs. We believe earnings will continue to improve even amid economic uncertainties, and thus 160 Toray Chemical Korea KOSPI expect the stock to rerate higher. 140

120 Thus, we see the latest correction as a buying opportunity. We maintain our Buy rating and target price of W17,000 (based on a DCF methodology; implies a 2016F P/E of 14x). 100 We continue to recommend the stock as our top pick in small/mid-cap chemicals. 80 11.13 3.14 7.14 11.14

Daewoo Securities CCo.,o., Ltd. FY (Dec.) 12/11 12/12 12/13 12/14F 12/15F 12/16F Revenue (Wbn) 1,166 1,110 1,033 956 979 1,118 [Oil Refining/Chemicals] OP (Wbn) 42 28 29 35 63 78

Yeon-ju Park OP margin (%) 3.6 2.5 2.8 3.7 6.4 7.0 +822-768-3061 NP (Wbn) 8 8 15 6 44 56 [email protected] EPS (W) 178 171 334 128 958 1,209 ROE (%) 2.7 2.6 5.0 1.8 12.7 14.0 Young-jee Bae +822-768-4123 P/E (x) 53.8 42.4 32.6 98.3 13.2 10.4 [email protected] P/B (x) 1.4 1.1 1.6 1.8 1.6 1.4 Notes: 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 t he U.S. PLEASE SEE ANALYST CERTIFICATIONS AND IMPORTANT DISCLOSURES & DISCLAIMERS IN APPENDIX 1 AT THE END OF REPORT.

Fixed Income Weekly Policy expectations to remain intact

Global yields fall sharply

Global yields, which had been rebounding, fell sharply last Friday. In particular, the 10- Fixed Income Report year UST yield declined by 9bps to 2.3%. This development appears attributable to investors’ lack of confidence in global economic fundamentals despite relatively solid US November 10, 2014 economic data and major central banks’ risk-on stances.

The B OJ announced a plan for additional quantitative easing two weeks ago, and the Daewoo Securities CCo.,o., Ltd. ECB has signaled that it would likely follow suit. In addition, it is unlikely that US

[Fixed Income] economic data will stimulate inflation expectations and trigger a federal funds rate hike in the near future. Since major global events have largely faded , we expect the bond Yeo-sam Yoon market to see a decline in volatility. +822-768-4022 [email protected] Expectations for base rate cut unlikely to dissipate

Dave Byun Last week, domestic yields dropped amid a rise in global yields. Although moneta ry +822-768-4174 policy decisions do not hinge solely on F/X rates, the significant impact of yen [email protected] depreciation on the domestic economy is likely to keep rate cut expectations intact.

Currently, investors are mainly focusing on whether there will be dissent at the Novemb er MPC meeting. Even if MPC members unanimously agree on freezing the base rate this month, however, expectations for additional policy stimulus should remain unabated. Accordingly, we advise investors to expand their positions when yields rebound.

We exp ect the committee to unanimously decide to keep the base rate unchanged for the following reasons. First, the committee has already cut the rate twice this year (including in the previous month). Second, if a minority opinion were to emerge during this month’s MPC meeting, the central bank would be pressured to take action in December or January. Third, an additional base rate cut would drag the base rate to below 2% for the first time in history. We also take into account the fact that MPC members seemed to display increased prudence during the October meeting.

Figure 111.1. KTB and global bond yields recoupled slightly last week

(%) (%) 2.4 JPM GBI Broad yield (L) 10Y KTB yield (R) 4.0

2.3 3.8 2.2 3.6 2.1 3.4 2.0 3.2 1.9 3.0 1.8

1.7 2.8

1.6 2.6 1/13 4/13 7/13 10/13 1/14 4/14 7/14 10/14 Source: Thomson Reuters, KOFIA

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

Key Universe Valuations November 10, 2014

※All data as of close November 6, 2014, 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 005380 Hyundai Motor 36,676 166,500 1.4 1.9 6.2 3.7 7.1 5.8 5.5 0.7 0.6 13.0 12.4 015760 KEPCO 29,883 46,550 3.2 18.7 7.1 46.1 9.8 8.3 7.6 0.5 0.5 6.6 6.9 005490 POSCO 26,941 309,000 2.6 26.2 14.5 98.6 20.4 10.8 9.0 0.6 0.6 5.7 6.6 035420 NAVER 24,491 743,000 0.1 38.9 30.3 61.7 34.6 32.0 23.8 7.4 5.7 33.3 32.5 032830 Samsung Life 24,300 121,500 - - - - 0.0 0.0 012330 Hyundai Mobis 23,168 238,000 0.9 11.4 8.8 11.8 6.6 5.8 5.5 0.9 0.7 15.8 14.6 055550 23,117 48,750 - - - - 0.0 0.0 017670 SK Telecom 22,165 274,500 3.6 15.8 7.5 13.9 8.0 10.6 9.8 1.2 1.1 13.8 13.6 000270 Motors 22,092 54,500 1.7 19.5 10.2 12.9 7.7 5.6 5.2 0.8 0.7 15.9 14.8 105560 KB Financial Group 15,531 40,200 - - - - 0.0 0.0 000810 Samsung F&M 13,952 294,500 - - - - 0.0 0.0 033780 KT&G 12,768 93,000 3.5 1.0 2.4 3.3 -1.5 15.1 15.3 2.0 1.9 14.4 13.2 051910 LG Chem 12,757 192,500 2.1 19.7 35.2 29.2 36.2 11.1 8.2 1.1 1.0 10.1 12.5 090430 Amorepacific 12,668 2,167,000 0.3 16.0 22.1 16.7 23.0 31.0 25.2 4.5 3.9 15.5 16.4 034220 LG Display 12,273 34,300 -7.6 23.2 -17.5 32.3 14.2 10.7 1.0 0.9 7.2 8.8 000830 Samsung C&T 11,826 75,700 0.8 26.7 6.4 41.7 6.8 18.8 17.6 1.0 1.0 5.7 5.8 003550 LG Corp. 11,095 64,300 1.6 18.0 4.2 18.5 5.9 9.0 8.5 0.8 0.8 9.4 9.2 034730 SK C&C 10,950 219,000 0.6 9.9 19.7 15.8 -56.6 20.7 47.6 3.0 2.8 17.6 6.9 066570 LG Electronics 10,604 64,800 0.6 18.2 25.4 68.7 26.5 9.7 7.7 0.9 0.8 9.5 10.9 086280 10,425 278,000 0.5 9.5 13.5 -0.1 11.4 17.5 15.7 3.1 2.6 19.0 17.9 086790 10,175 35,100 - - - - 0.0 0.0 051900 LG Household & Health Care 9,636 617,000 0.6 18.8 12.2 20.0 14.6 26.3 22.9 5.2 4.3 22.3 21.2 024110 9,034 16,350 - - - - 0.0 0.0 023530 Lotte Shopping 8,959 284,500 0.5 8.3 6.0 15.3 7.3 10.0 9.3 0.5 0.5 5.2 5.3 006400 Samsung SDI 8,802 128,000 1.2 - 71.5 143.2 52.1 32.6 21.4 1.1 1.1 3.5 5.1 030200 KT 8,303 31,800 3.1 - 7.2 - 33.0 15.3 11.5 0.7 0.7 4.9 6.3 009540 8,132 107,000 1.9 - 103.3 - 118.1 19.5 8.9 0.5 0.5 2.7 5.6 096770 SK Innovation 7,952 86,000 3.7 198.4 35.4 - 35.5 10.8 7.9 0.5 0.5 4.8 6.2 035720 Daum Communications 7,879 139,300 0.8 226.9 35.3 144.0 39.4 32.3 23.1 10.2 7.5 37.2 38.4 003600 SK Holdings 7,749 165,000 1.5 29.8 6.2 34.0 -3.9 5.5 5.7 0.5 0.5 10.9 9.5 004020 7,716 66,200 0.8 -0.5 8.0 1.0 17.7 9.7 8.3 0.5 0.5 5.6 6.2 010130 Korea Zinc 7,642 405,000 1.2 15.6 5.5 21.5 6.2 12.7 11.9 1.5 1.3 12.5 11.9 035250 Kangwon Land 7,402 34,600 3.2 7.2 5.3 12.1 7.1 16.8 15.7 2.3 2.2 15.3 15.1 088350 Hanwha Life 7,339 8,450 - - - - 0.0 0.0 161390 6,677 53,900 0.9 7.0 9.0 13.2 10.1 8.0 7.3 1.3 1.1 17.1 16.1 021240 Coway 6,671 86,500 2.3 14.4 13.6 14.3 17.3 22.6 19.3 5.0 4.4 26.0 26.3 002380 KCC 6,417 610,000 1.3 7.9 11.4 10.2 12.3 22.8 20.3 1.2 1.1 5.4 5.8 010140 6,130 26,550 1.9 152.4 4.2 128.4 6.0 10.3 9.7 0.9 0.8 9.5 9.3 139480 Emart 5,687 204,000 0.7 12.4 9.7 18.1 13.8 11.0 9.6 0.7 0.7 7.0 7.3 011170 Lotte Chemical 5,398 157,500 0.6 65.2 25.9 76.9 29.2 10.5 8.1 0.8 0.7 7.7 9.2 000720 Hyundai E&C 5,128 46,050 1.3 19.8 5.1 38.8 9.6 7.7 7.1 0.8 0.8 11.6 11.4 036460 Korea Gas 4,994 54,100 1.8 17.9 0.9 -8.6 24.9 14.2 11.4 0.5 0.5 3.7 4.5 001800 Orion 4,881 817,000 0.4 6.3 9.4 16.3 9.8 28.2 25.7 3.5 3.1 13.4 13.0 032640 LG Uplus 4,715 10,800 2.1 16.6 3.6 35.9 9.5 14.5 13.3 1.1 1.0 7.5 7.8 011210 Hyundai Wia 4,696 182,500 0.3 20.6 10.4 11.8 10.5 9.2 8.4 1.6 1.3 18.3 17.0 097950 CJ CheilJedang 4,545 346,500 0.5 22.3 7.9 118.2 14.7 16.7 14.6 1.5 1.4 9.7 10.2 010950 S-Oil 4,526 40,200 3.4 - 62.4 - 62.4 13.4 8.2 0.9 0.8 6.6 10.0 000120 CJ Korea Express 4,255 186,500 45.4 14.5 139.8 9.5 27.4 25.0 1.4 1.4 6.6 6.8 009150 Samsung Electro-Mechanics 4,078 54,600 1.0 - 105.7 -72.7 94.7 31.3 16.1 0.9 0.9 3.0 5.6 005830 Dongbu Insurance 3,979 56,200 - - - - 0.0 0.0 Source: KDB Daewoo Securities Research

Market Data November 10, 2014

※All data as of close November 7, 2014, unless otherwise noted.

Other Major Indices Economic Indicators Close Net Chg 1D (%) YTD (%) Close 1D ago 1M ago 1Y ago MSCI Korea* 394.24 -3.61 -0.91 -10.91 USD/KRW 1,092.50 1,089.10 1,072.30 1,060.70 KOSPI 1,958.23 18.36 0.95 -0.46 JPY100/KRW 954.23 945.19 993.84 1,080.69 KOSDAQ 539.22 -0.68 -0.13 8.65 EUR/KRW 1,362.57 1,348.47 1,360.43 1,423.14 Dow Jones* 17,573.93 19.46 0.11 6.89 3Y Treasury 2.12 2.09 2.26 2.89 S&P 500* 2,031.92 0.71 0.03 10.91 3Y Corporate 2.46 2.44 2.63 3.32 NASDAQ* 4,632.53 -5.94 -0.13 11.81 DDR2 1Gb* 1.40 1.40 1.44 1.52 Philadelphia Semicon* 637.48 -5.82 -0.90 20.79 NAND 16Gb* 2.36 2.35 2.43 3.55 FTSE 100* 6,567.24 16.09 0.25 -2.24 Oil (Dubai)* 79.60 80.23 91.03 103.20 Nikkei 225 16,780.53 -99.85 -0.59 5.48 Gold* 1,169.80 1,142.60 1,211.70 1,308.50 Hang Seng* 23,550.24 -99.07 -0.42 0.90 Customer deposits (Wbn)* 14,659 14,868 14,987 14,668 Taiwan (Weighted) 9,049.98 137.36 1.54 5.08 Equity type BC (Wbn)(Nov. 5) 78,568 78,473 76,834 84,455 Note: * as of November 6, 2014 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 119.43 Hyundai Mobis 28.29 KODEX LEVERAGE 100.37 NHN 25.07 Hynix 18.13 Amore Pacific 23.75 Hyundai Motor (2P) 22.48 Samsung Heavy Ind. 23.32 LG Display 13.53 Hyundai Motor (2P) 23.69 19.59 16.70 Hyundai Motor 9.81 Samsung Electronics (P) 15.33 Honam Petrochemical 19.23 KEPCO 15.10 Kia Motors 9.61 Glovis 12.38 Hyundai Mobis 19.09 Kolong Industries 13.89 SEMCO 9.44 LG International 9.07 Kia Motors 17.78 NHN Entertainment 12.89 KT 7.71 Hyundai Merchant Marine 8.57 DSME 14.60 KT 11.28 Kangwon Land 7.59 Kolong Industries 8.10 Samsung Electronics (P) 13.53 KODEX INVERSE 9.05 LG Household & Health Care 6.87 KCC 7.26 LG Display 12.42 CUCKOO 8.66 Woongjin Coway 5.48 NHN 6.39 Glovis 11.56 Hana Financial Group 8.51 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 China King 3.77 SundayToz 3.94 Daum Communications 6.97 Interpark INT 4.14 Interpark 2.01 Huvitz 2.33 Com2us 1.94 Paradise 2.76 Wemade 1.36 SM 1.75 Vieworks 1.81 HaanSoft 1.99 HaanSoft 1.33 EO Technics 1.72 The Leadcorp.Inc. 1.59 Gamevil 1.97 Sansung P&C 1.30 LiHOM-CUCHEN 1.68 Webzen 1.08 KH Vatec 1.73 Bio Space 1.22 Gamevil 1.68 M-2 SPAC 0.82 LION CHEMTECH 1.67 KH Vatec 1.05 Access Bio 1.43 ViroMed 0.81 Easy Bio System 1.48 KT Music 0.97 Interpark INT 1.12 Sung Kwang Bend 0.72 CJ E&M 1.48 0.84 Binex 1.08 EO Technics 0.71 OSSTEM IMPLANT 1.47 STS Semicon&Telecom 0.78 Romanson 1.03 Humax 0.63 Romanson 1.47 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 1,268,000 62,000 186,776 Daum Communications 139,300 4,100 7,879 Hyundai Motor 166,500 4,500 36,676 Celltrion 43,000 -100 4,452 Hynix 47,550 150 34,617 Paradise 28,700 300 2,610 KEPCO 46,550 -400 29,883 Dongsuh 21,900 250 2,183 POSCO 309,000 7,000 26,941 Com2us 159,100 7,700 1,605 NHN 743,000 0 24,491 CJ O Shopping 234,000 -2,000 1,452 Samsung Life Insurance 121,500 5,000 24,300 EO Technics 118,000 5,400 1,443 Hyundai Mobis 238,000 1,000 23,168 Medy-tox 253,500 -2,500 1,434 Shinhan Financial Group 48,750 -650 23,117 SK Broadband 4,525 -75 1,339 SK Telecom 274,500 -500 22,165 CJ E&M 34,400 -450 1,332 Source: