Showbox (086980 KQ ) Expectations Should Be Dialed Back

Showbox (086980 KQ ) Expectations should be dialed back

Beautiful Accident flops in China The movie Beautiful Accident , which was co-produced by Showbox and China’s Media Huayi Brothers, hit theaters on June 2 nd . The market had high hopes for the film, as it was the first project to be carried out by both companies from the planning Company Update stages (unlike 2013’s Mr. Go, for which production and distribution were done separately) and features some of China’s biggest movie stars (Kun Chen and Lun June 5, 2017 Mei Gwei). The film also marked the beginning of the company’s China business, widely viewed as its long-term growth engine. However, the movie had a disappointing debut, failing to meet even our more (Downgrade) Hold conservative expectations. We originally modeled total admissions at 6.7mn, or box-office revenue of RMB240mn (calculated by averaging the performances of Mr. Target Price (12M, W) - Go and 20 Once Again ); this would have required the movie to bring in around 2.9mn admissions and RMB100mn in revenue on the opening weekend (June 2 nd - 4th ). But it only managed 300,000-350,000 admissions and RMB10-12mn in revenue Share Price (06/02/17, W) 6,250 (estimates). Showbox is believed to have invested 20% (W2bn) of the fil m’s total budget. Based on the first-week performance, we see a slim chance of the Expected Return - company breaking even on the film (to be booked in 1Q18).

Success of A Taxi Driver will be critical OP (17F, Wbn) 10 For 2Q17, we expect Showbox to post another small operating loss (W0.6bn ; vs. loss of W1bn in 1Q17), turning to red on a YoY basis. The company is likely to book Consensus OP (17F, Wbn) 18 more than W1bn in losses on The Mayor (April 26 th ), its only new release in 2Q17 , given the film’s poor turnout (1.4mn admissions), but it shou ld recognize a slight EPS Growth (17F, %) -33.8 profit on The Prison (March 23 rd ), which surpassed the break-even point in 2Q17. Market EPS Growth (17F, %) 36.3 We project ancillary revenue of around W3bn. P/E (17F, x) 44.2 Market P/E (17F, x) 10.1 The weak showing in 1H17 will make the performance of the company’s 2H17 lineup all the more important. In particular, much rides on the success of the film A KOSDAQ 658.78 Taxi Driver (starring Song Kang-ho), set to come out in the 3Q peak season . The Market Cap (Wbn) 391 film’s release (early August) appears to be well-timed, as we expect it to be one week after the release of CJ E&M’s Battleship Island (starring Hwang Jung-min and Shares Outstanding (mn) 63 Song Joong-ki). Both films look better-positioned than other movies slated for Free Float (%) 42.2 release in the following weeks and have the potential to become long-running hits . Foreign Ownership (%) 2.2 Beta (12M) 1.49 Downgrade to Hold; Expectations should be dialed back 52-Week Low 4,515 We downgrade our rating on Showbox to Hold from Buy, as the stock has reached 52-Week High 8,260 our previous target price (W6,300), following a 21% gain over the past month on rising expectations in the run-up to Beautiful Accident ’s release. At a 2017F P/E of (%) 1M 6M 12M 44x (based on our estimates), the stock is now trading at the upper end of its valuation range. Absolute 20.7 35.7 -18.3 Relative 14.7 20.9 -13.0 Any further upside will likely depend on more visible progress in China and strong domestic earnings growth in 2H17. However, we think it is too early to turn upbeat

130 Showbox KOSDAQ on the sustainability of Chinese co-productions. While the recent release of the company’s first co-production is meaningful, the company has yet to follow up with 110 a second project, and the Chinese government’s stance on Korean content also 90 remains to be seen. In addition, the anticipated loss on the first co-production is likely to dial back expectations on the potential earnings o f future projects. We 70 think investors need to tone down expectations for now and wait for further clarity on the performance of upcoming domestic films and the resumption of Chinese co- 50 5.16 9.16 1.17 5.17 productions.

FY (Dec.) 12/13 12/14 12/15 12/16 12/17F 12/18F Mirae Asset Daewoo Co., Ltd. Revenue (Wbn) 108 72 142 126 106 119

[Media ] OP (Wbn) 6 2 14 15 10 11 OP margin (%) 5.6 2.8 9.9 11.9 9.4 9.2 Jeong -yeob Park NP (Wbn) 5 -1 11 13 9 9 +822 -3774 -1652 [email protected] EPS (W) 83 -12 183 214 141 152 ROE (%) 5.1 -0.7 10.4 11.0 6.9 7.2

P/E (x) 38.0 - 40.4 26.4 44.2 41.2

P/B (x) 1.9 2.8 4.0 2.8 3.0 2.9

Dividend yield (%) 0.0 0.0 0.7 0.9 0.8 0.8

Notes: 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

June 5, 2017 Showbox

Table 1. Showbox–Huayi Brothers profit sharing estimates Admissions (mn) 0.7 1.0 3.0 6.7 10.0 15.0 20.0 30.0 95.0 Box-office revenue (RMBmn) 25.0 35.7 107.0 238.9 356.6 534.8 713.1 1,069.7 3,387.3 ATP (RMB) 35.7 35.7 35.7 35.7 35.7 35.7 35.7 35.7 35.7 RMB/W (W) 169 169 169 169 169 169 169 169 169 Pr oject P/L Project P/L (Wbn) -8.4 -7.5 -1.7 9.1 18.7 33.3 47.9 77.0 266.6 Profit margin (%) -184.2 -175.5 -117.1 -9.2 87.1 232.9 378.8 670.5 2,566.6 Movie P/L (Wbn) -9.3 -8.3 -1.9 10.0 20.6 36.6 52.6 84.7 293.0 Total profit (Wbn) 2.4 3.5 10.5 23.4 34.9 52.4 69.9 104.8 331.9 Total budget (Wbn) 11.7 11.8 12.4 13.4 14.4 15.8 17.3 20.2 39.0 Profit sharing Huayi Brothers (Wbn) -4.7 -4.2 -1.0 5.1 10.5 18.6 26.8 43.1 149.3 Showbox (Wbn) -1.2 -1.1 -0.2 1.3 2.7 4.8 6.9 11.1 38.4 Other investors (Wbn) -0.8 -0.7 -0.2 0.9 1.8 3.2 4.6 7.4 25.6 Showbox’s net profit (Wbn) -2.1 -1.8 -0.4 2.0 4.1 7.3 10.5 16.9 58.5 Source: Mirae Asset Daewoo Research

Table 2. Box-office performance of foreign films in China: Opening weekend vs. total (mn persons, RMBmn, %) Admi- First week First week First week % Film name Release date Ranking Total gross ssions gross admission s of total gross Beautiful Accident 6/2/2017 27 11.96 0.34 44.7 3.0 Mr. Go 7/18/2013 117 64 1.8 54.3 Miss Peregrine's Home for 12/2/2016 118 70 1.9 58.7 Peculiar Children 6.7 La La Land 2/14/2017 23 rd (as of now ) 248 149 4.2 60.0 Sing 2/17/2017 24 th (as of now) 216 78 2.2 35.9 Moana 11/25/2016 227 86 2.4 37.7 10.0 Passengers 1/13/2017 20 th (as of now) 314 121 3.4 38.4 The Secret Life of Pets 8/2/2016 389 195 5.5 50.0 15.0 Your Name 12/2/2016 25 th in 2016 577 287 8.1 49.8 Fantastic Bea sts and Where to 11/25/2016 24 th in 2016 592 283 7.9 47.9 Find Them Beauty and the Beast 3/17/2017 14 th (as of now) 591 311 8.7 52.6 20.0 Dr. Strange 11/4/2016 18 th in 2016 752 300 8.4 40.0 Logan 3/3/2017 11 th (as of now) 732 318 8.9 43.5 Hobbit 3 1/23/2015 12 th in 2015 767 313 8.8 40.8 30.0 Jungle Book 4/15/2016 11 th in 2016 979 319 9.0 32.6 Kong: Skull Island 3/24/2017 4th (as of now) 1,150 503 14.1 43.7 xXx: Return of Xander Cage 2/10/2017 6th (as of now) 1,127 407 11.4 36.1 Resident Evil 2/24/2017 7th (as of now) 1,112 610 17.1 54.8 Kung Fu Panda 3 1/29/2016 9th in 2016 1,002 340 9.5 33.9 Highest-grossing 95.0 The Mermaid 2/8/2016 3,392 1,817 51.0 53.6 film of all time Note: For Beautiful Accident , total gross was estimated based on opening weekend data Source: Mirae Asset Daewoo Research

Figure 1. Showbox’s profits from Beautiful Accident by attendance level

(Wbn) W58.5bn 20 Profit recognition for Showbox

Projection based 10 on opening Previous weekend data projection

-5 0.7mn 1mn 3mn 6.7mn 10mn 20mn 30mn 95mn

Source: Mirae Asset Daewoo Research

Mirae Asset Daewoo Research 2 June 5, 2017 Showbox

Earnings forecasts and valuation

Table 3. Quarterly and annual earnings (Wbn, %, mn persons, %p) 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17F 3Q17F 4Q17F 2015 2016 2017F Revenue 43.6 8.9 34.1 39.3 8.5 11.2 41.7 44.8 142.0 125.9 106.3 Theater 39.5 0.8 32.6 27.3 6.5 8.2 40.6 32.4 121.8 100.1 87.7 Ancillary 4.0 8.0 1.5 12.0 1.9 3.0 1.1 12.3 19.7 25.5 18.3 Other (rental, etc.) 0.1 0.1 0.1 0.1 0.0 0.1 0.1 0.1 0.5 0.3 0.3 Operating profit 6.8 0.2 5.3 2.9 -1.0 -0.7 7.3 4.6 14.1 15.3 10.2 OP margin (%) 15.6 2.8 15.6 7.4 -11.4 -5.9 17.4 10.2 9.9 12.1 9.6 Pretax profit 7.1 0.8 5.8 2.2 -0.7 -0.1 7.8 3.8 12.5 15.9 10.9 Net profit 5.3 1.1 4.2 2.7 -0.9 -0.1 6.6 3.2 11.5 13.4 8.9 Net margin (%) 12.2 12.7 12.3 6.9 -10.2 -0.8 15.8 7.2 8.1 10.6 8.3 YoY Revenue 84.2 -33.2 -48.4 1.2 -80.5 26.4 22.3 14.0 97.2 -11.3 -15.6 Theater 77.4 -90.5 -48.1 -3.4 -83.4 899.2 24.5 18.9 125.8 -17.8 -12.4 Ancillary 211.5 75.2 -55.0 13.5 -52.4 -62.5 -27.0 3.1 9.0 29.1 -28.1 Other (rental, etc.) -3.8 -48.7 -50.5 -11.8 -86.5 39.9 27.7 -10.9 TTB -29.9 -20.8 Operating profit 226.1 -20.5 -38.2 -4.0 TTR TTR 36.4 57.0 694.8 8.8 -33.2 Net profit 136.7 TTB -54.5 2,063.6 TTR TTR 56.9 18.3 TTB 16.6 -33.8 Assumptions Domestic admissions 49.5 45.1 72.4 50.0 52.3 47.2 74.9 49.0 217.3 217.0 223.4 Showbox admissions 12.5 0.3 9.0 7.5 1.8 2.5 11.0 9.0 36.9 29.2 24.3 Showbox M/S 25.2 0.6 12.4 14.9 3.5 5.2 14.7 18.4 17.0 13.4 10.9 YoY Domestic admissions -2.0 1.2 -0.9 1.7 5.7 4.5 3.5 -2.0 1.0 -0.1 2.9 Showbox admissions 66.9 -90.2 -50.6 -13.0 -85.4 864.6 22.5 20.5 124.8 -20.9 -16.7 Showbox M/S 10.4 -5.3 -12.5 -2.5 -21.7 4.7 2.3 3.4 9.3 -3.5 -2.6 Source: Mirae Asset Daewoo Research estimates

Table 4. Earnings forecast revisions (Wbn, W, %, %p) Previous Revised % chg. Note 17F 18F 17F 18F 17F 18F Revenue 135 141 106 119 -21.5 -15.8 - Sluggish performance of domestic films Operating profit 16 18 10 11 -37.1 -41.6 - Chinese earnings recognition deferred to 2018 Net profit 14 16 9 9 -37.5 -40.1 OP margin 12.0 12.9 9.6 8.9 -2.4 -4.0 Net margin 10.5 11.2 8.3 8.0 -2.1 -3.2 Source: Mirae Asset Daewoo Research estimates

Figure 2. 12-month forward P/E trend

(W) 12,000

Showbox China established 9,000 Release of Beautiful Accident 46x 6,000 34x

26x 3,000 20x

0 Jan. 12 Jan. 13 Jan. 14 Jan. 15 Jan. 16 Jan. 17 Note: Based on Mirae Asset Daewoo estimates/Source: WISEfn, Mirae Asset Daewoo Research

Mirae Asset Daewoo Research 3 June 5, 2017 Showbox

Showbox (086980 KQ/Hold)

Comprehensive Income Statement (Summarized) Statement of Financial Condition (Summarized) (Wbn) 12/15 12/16 12/17F 12/18F (Wbn) 12/15 12/16 12/17F 12/18F Revenue 142 126 106 119 Current Assets 172 153 157 168 Cost of Sales 117 101 85 98 Cash and Cash Equivalents 57 102 99 105 Gross Profit 25 25 21 21 AR & Other Receivables 17 6 7 7 SG&A Expenses 10 10 12 11 Inventories 0 0 0 0 Operating Profit (Adj) 14 15 10 11 Other Current Assets 98 45 51 56 Operating Profit 14 15 10 11 Non-Current Assets 44 44 53 55 Non-Operating Profit -1 1 1 0 Investments in Associates 12 12 13 15 Net Financial Income 1 1 1 1 Property, Plant and Equipment 2 2 1 1 Net Gain from Inv in Associates -2 0 0 0 Intangible Assets 0 1 5 5 Pretax Profit 13 16 11 11 Total Assets 216 197 210 224 Income Tax 1 2 2 2 Current Liabilities 99 70 80 88 Profit from Continuing Operations 11 13 9 9 AP & Other Payables 46 38 43 47 Profit from Discontinued Operations 0 0 0 0 Short-Term Financial Liabilities 0 0 0 0 Net Profit 11 13 9 9 Other Current Liabilities 53 32 37 41 Controlling Interests 11 13 9 9 Non-Current Liabilities 0 1 1 1 Non-Controlling Interests 0 0 0 0 Long-Term Financial Liabilities 0 0 0 0 Total Comprehensive Profit 11 13 9 9 Other Non-Current Liabilities 0 1 1 1 Controlling Interests 11 13 9 9 Total Liabilities 100 71 81 89 Non-Controlling Interests 0 0 0 0 Controlling Interests 116 126 129 135 EBITDA 89 66 52 59 Capital Stock 31 31 31 31 FCF (Free Cash Flow) 85 -6 42 60 Capital Surplus 36 36 36 36 EBITDA Margin (%) 62.7 52.4 49.1 49.6 Retained Earnings 49 60 62 69 Operating Profit Margin (%) 9.9 11.9 9.4 9.2 Non-Controlling Interests 0 0 0 0 Net Profit Margin (%) 7.7 10.3 8.5 7.6 Stockholders' Equity 116 126 129 135

Cash Flows (Summarized) Forecasts/Valuations (Summarized) (Wbn) 12/15 12/16 12/17F 12/18F 12/15 12/16 12/17F 12/18F Cash Flows from Op Activities 87 -6 42 60 P/E (x) 40.4 26.4 44.2 41.2 Net Profit 11 13 9 9 P/CF (x) 5.0 5.2 7.6 6.7 Non-Cash Income and Expense 80 54 42 49 P/B (x) 4.0 2.8 3.0 2.9 Depreciation 0 0 0 0 EV/EBITDA (x) 3.9 3.8 5.7 4.9 Amortization 75 50 41 48 EPS (W) 183 214 141 152 Others 5 4 1 1 CFPS (W) 1,467 1,074 819 933 Chg in Working Capital -5 -73 -7 2 BPS (W) 1,860 2,021 2,061 2,163 Chg in AR & Other Receivables -10 11 -1 -1 DPS (W) 50 50 50 50 Chg in Inventories 0 0 0 0 Payout ratio (%) 27.2 23.3 35.2 32.9 Chg in AP & Other Payables 40 -10 3 3 Dividend Yield (%) 0.7 0.9 0.8 0.8 Income Tax Paid 0 -1 -3 -2 Revenue Growth (%) 97.2 -11.3 -15.9 12.3 Cash Flows from Inv Activities -53 54 -40 -49 EBITDA Growth (%) 74.5 -25.8 -21.2 13.5 Chg in PP&E -2 0 0 0 Operating Profit Growth (%) 600.0 7.1 -33.3 10.0 Chg in Intangible Assets 0 0 -38 -48 EPS Growth (%) - 16.9 -34.1 7.8 Chg in Financial Assets -52 56 -2 -1 Accounts Receivable Turnover (x) 13.7 11.6 17.5 17.5 Others 1 -2 0 0 Inventory Turnover (x) 0.0 0.0 0.0 0.0 Cash Flows from Fin Activities 0 -3 -4 -3 Accounts Payable Turnover (x) 5.4 2.8 2.5 2.6 Chg in Financial Liabilities 0 0 0 0 ROA (%) 6.4 6.5 4.4 4.4 Chg in Equity 0 0 0 0 ROE (%) 10.4 11.0 6.9 7.2 Dividends Paid 0 -3 -3 -3 ROIC (%) 95.4 -112.3 2,486.9 1,703.6 Others 0 0 -1 0 Liability to Equity Ratio (%) 85.8 56.2 62.9 65.6 Increase (Decrease) in Cash 34 45 -4 6 Current Ratio (%) 173.4 217.9 195.3 191.6 Beginning Balance 24 57 102 99 Net Debt to Equity Ratio (%) -96.7 -81.3 -76.9 -77.7 Ending Balance 57 102 99 105 Interest Coverage Ratio (x) 0.0 0.0 0.0 0.0 Source: Company data, Mirae Asset Daewoo Research estimates

Mirae Asset Daewoo Research 4 June 5, 2017 Showbox

APPENDIX 1

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

Company (Code) Date Rating Target Price (W) Showbox Showbox (086980) 06/04/2017 Hold - 12,000 04/17/2017 Buy 6,300 10,000 No Coverage 8,000 09/30/2015 Buy 11,000 07/26/2015 Trading Buy 10,000 6,000 4,000 2,000

0 Jun 15 Jun 16 Jun 17

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 Buy Trading Buy Hold Sell 72.86% 15.58% 11.56% 0.00% * Based on recommendations in the last 12-months (as of March 31, 2017)

Disclosures As of the publication date, Mirae Asset Daewoo Co., Ltd. and/or its affiliates do not have any special interest with the subj ect company and do not own 1% or more of the subject company's shares outstanding.

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 and regulations thereof. Opinions expressed in this publication about the subject securities and companies accurately reflect the personal views of the Analysts primarily responsible for 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. No part of the compensation of the Analysts was, is, or will be directly or indirectly related to the specific recommendations or views contained in this report but, 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 is published 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 and regulations or subject Mirae Asset Daewoo and 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 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

Mirae Asset Daewoo Research 5 June 5, 2017 Showbox

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: This report is distributed in the U.S. by Mirae Asset Securities (USA) Inc., a member of FINRA/SIPC, and is only intended for major institutional investors as defined in Rule 15a-6(b)(4) under the U.S. Securities Exchange Act of 1934. All U.S. persons that receive this document by their acceptance thereof represent and warrant that they are a major 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., which accepts responsibility for the contents of this report in the U.S. 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 document has been approved for distribution in Hong Kong by Mirae Asset Securities (HK) Ltd., 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 6 June 5, 2017 Showbox

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Mirae Asset Daewoo Research 7