April 3, 2019

Korea Morning Focus

Sector News & Analysis Major Indices Close Chg Chg (%) Chemicals/Oil Refining/Solar PV (Overweight) KOSPI 2,177.18 8.90 0.41 Watch for normalization of Chinese demand KOSPI 200 281.72 1.40 0.50 KOSDAQ 739.57 2.76 0.37

Turnover ('000 shares, Wbn) Volume Value KOSPI 250,943 4,098 KOSPI 200 69,217 3,091 KOSDAQ 938,088 4,033

Market Cap (Wbn) Value KOSPI 1,441,636 KOSDAQ 251,857

KOSPI Turnover (Wbn) Buy Sell Net Foreign 1,326 1,050 276 Institutional 1,025 1,178 -154 Retail 1,727 1,831 -103

KOSDAQ Turnover (Wbn) Buy Sell Net Foreign 317 324 -6 Institutional 161 189 -28 Retail 3,521 3,484 37

Program Buy / Sell (Wbn) Buy Sell Net KOSPI 1,195 1,005 190 KOSDAQ 265 271 -6

Advances & Declines Advances Declines Unchanged KOSPI 432 387 78 KOSDAQ 691 459 127

KOSPI Top 5 Most Active Stocks by Value (Wbn) Price (W) Chg (W) Value 45,750 700 407 Hynix 76,400 -200 202 KODEX Leverage 13,160 100 149 Celltrion 190,000 8,000 125 KB Financial Group 45,000 1,000 121

KOSDAQ Top 5 Most Active Stocks by Value (Wbn) Price (W) Chg (W) Value Kolon TissueGene 19,700 -4,450 152 RoboRobo 4,800 945 147 DST Robot 1,485 60 130 Woori Technology 3,775 795 123 ABL Bio 32,900 100 119 Note: As of April 02, 2019

Mirae Asset Daewoo Research This document is a summary of a report prepared by Mirae Asset Daewoo Co., Ltd. (“Mirae Asset 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. Mirae Asset 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. Mirae Asset 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.

Chemicals/Oil Refining/Solar PV Watch for normalization of Chinese demand

Overweight (Maintain) [Chemicals] Chinese demand to normalize; LG Chem and Kumho Petrochemical remain our top picks Industry Report 1Q19 earnings to miss consensus, given slow pace of market recovery: The April 3, 2019 chemicals cycle has been gradually picking up, but the pace of the recovery has been somewhat slow. As such, we anticipate that 1Q19 chemical earnings will come in below consensus estimates. Reflecting such conditions, chemical shares have come under renewed pressure, after rising on expectations for a recovery in the chemicals cycle. Mirae Asset Daewoo Co., Ltd. Normalization of Chinese demand to support recovery: The continued recovery of the chemicals cycle will likely hinge on demand from China. Some worry that despite [Chemicals/Oil Refining/EV Batteries] policy stimulus, the turnaround in Chinese demand will be limited. However, we believe

Yeon-ju Park the slow pace of recovery is due to the fact that the Chinese government is taking a +822-3774-1755 more gradual approach to policy support, opting for measures such as tax cuts over [email protected] efforts to aggressively ease credit conditions. While some macro uncertainties exist, we think chemical spreads are likely to improve from current levels at the very least. 1) Given how unusually sluggish China’s key demand indicators are, a mere normalization in demand should lead to market improvement, and policy stimulus is likely to remain in place until demand returns to normal. 2) In addition, uncertainties over US-China

trade disputes have significantly crippled export orders. Once such uncertainties subside, demand is likely to pick up. 3) Lastly, current spread levels appear excessively low relative to supply/demand conditions. ABS spreads to improve; LG Chem and Kumho Petrochemical remain our top picks: As China’s demand conditions improve, especially in the home appliance and auto sectors, we believe the chemicals cycle will recover, led by the ABS segment. For LG Chem, we expect lackluster earnings in the near term due to the ongoing energy storage system (ESS) issue, but also look for a recovery in ABS spreads and stronger battery momentum. Kumho Petrochemical is likely to benefit from turnarounds in BPA and ABS spreads. The recent rise in oil prices triggered by tight supply could also prove favorable to the company by boosting earnings at the energy unit.

[Oil refining] Worries largely priced in; Keep eye on May IMO meeting 1Q19 earnings to disappoint consensus, but 2Q19 earnings to improve: We expect 1Q19 oil refining earnings to improve after bottoming in 4Q18, but still fall short of consensus estimates. Refining margins remained muted during the first two months of the year, and although margins have picked up in March, this improvement is unlikely to show up in 1Q19 earnings. Still, with margins now improving, earnings look set to recover in 2Q. That said, better margins have already been reflected in consensus estimates. As such, we believe further margin improvements from the implementation of the International Maritime Organization’s (IMO) regulations will prove key. Complex IMO dynamics; Keep eye on May meeting: IMO expectations have mostly died down, as specific guidelines on the implementation of the regulations have not yet been established. Some adjustments have also been made on the supply side, such as production yield changes by refiners and installations of scrubbers on ships. However, if the regulations are implemented as planned, refining margins will likely move higher. As such, we believe the IMO meeting scheduled in mid-May bears close watching.

[Solar PV] Market to remain weak in the near term but meaningfully recover in 2H19 Market to remain weak in the near term due to delays to China’s policy finalization, but expectations for a 2H19 recovery remain intact: Prices across the solar PV supply chain have been weakening since March, due to the end of the peak season in India and Japan and delays to the finalization of China’s solar PV policy. In the near term, much will depend on China’s confirmation of its solar PV policy. In our view, it is only a matter of time before China announces its policy. Furthermore, we continue to believe the solar PV market will recover in 2H19, driven by growing demand in the US, Europe, and emerging markets. We reiterate OCI as our top pick, given its strong upside potential.

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

April 3, 2019 Chemicals/Oil Refining/Solar PV

LG Chem (051910 KS) ABS and battery momentum to recover; Still one of our top picks

Chemicals Impact of ESS issue to be temporary; ABS spreads to pick up; Still one of our top picks Impact of ESS issue to be temporary; Momentum to recover in 2Q19: LG Chem’s (Maintain) Buy shares have pulled back amid a slower-than-expected chemicals cycle recovery and uncertainties surrounding the domestic ESS business. We expect 1Q19 earnings to miss Target Price (12M, W) 520,000 the consensus and see ESS-related uncertainties lasting until the final results of a safety investigation are released in May. However, the government is likely to continue to Share Price (04/02/19, W) 372,000 provide support for ESS, given its energy policy stance. And once the investigation results are announced, installations are likely to rapidly resume. We believe the growth Expected Return 40% potential of the ESS market remains intact, supported by rising demand in developed countries, including the US. Furthermore, we expect EV battery earnings to meaningfully OP (19F, Wbn) 2,182 improve in 2H19, as sales of third-generation models begin. Consensus OP (19F, Wbn) 2,163 Chemicals cycle to improve on pickup in Chinese demand; Maintain as top pick: EPS Growth (19F, %) -2.4 While the pace of the recovery in the chemicals cycle remains somewhat slow, we see Market EPS Growth (19F, %) -12.1 strong chances of further improvements, as China’s unusually sluggish demand should P/E (19F, x) 20.3 normalize on the back of policy efforts to boost consumption. In particular, stronger Market P/E (19F, x) 11.1 consumer demand for appliances and autos should boost spreads for ABS, where supply KOSPI 2,177.18 pressures remain limited. This should benefit LG Chem, given that ABS is one of the Market Cap (Wbn) 26,260 company’s main products. We reaffirm our Buy rating and target price of W520,000 on LG Chem and maintain the stock as one of our top picks in chemicals. Shares Outstanding (mn) 78 Free Float (%) 64.3 1Q19 preview: OP to miss consensus at W327.2bn, but mainly due to one-offs Foreign Ownership (%) 38.8 1Q19F OP of W327.2bn: We forecast 1Q19 operating profit to come in at W327.2bn, Beta (12M) 1.44 below the consensus. The recovery of the chemicals cycle has been somewhat slow. 52-Week Low 307,000 Meanwhile, battery earnings were likely dragged down by ESS provisions, a decline in 52-Week High 394,500 domestic revenue, and seasonally weak demand for EV and small-sized batteries. The (%) 1M 6M 12M information & electronic materials (I&E) unit also likely remained in the red. Absolute -4.7 5.4 -4.0 Relative -3.9 11.8 7.8 Battery and chemical market conditions to pick up steam in 2Q19 2Q19F OP of W536.9bn: We forecast 2Q19 operating profit to improve to W536.9bn. 110 LG Chem KOSPI Chemicals earnings are likely to improve, aided by the removal of the 1Q19 maintenance 100 impact and ABS capacity ramp-ups. Battery earnings should also pick up on the dwindling impact of the ESS issue. 90

80

70 3.18 7.18 11.18 3.19

메일@ miraeasset.com FY (Dec.) 12/16 12/17 12/18 12/19F 12/20F 12/21F Revenue (Wbn) 20,659 25,698 28,183 32,802 38,725 41,557 OP (Wbn) 1,992 2,928 2,246 2,182 2,989 3,221 OP Margin (%) 9.6 11.4 8.0 6.7 7.7 7.8 NP (Wbn) 1,281 1,945 1,473 1,437 2,014 2,155 EPS (W) 17,336 24,854 18,812 18,359 25,726 27,525 ROE (%) 9.5 12.9 8.9 8.2 10.7 10.5 P/E (x) 15.1 16.3 18.4 20.3 14.5 13.5 P/B (x) 1.4 1.9 1.6 1.6 1.5 1.3 Dividend Yield (%) 1.9 1.5 1.7 1.6 1.6 1.6 Note: All figures are based on consolidated K-IFRS; NP refers to net profit attributable to controlling interests Source: Company data, Mirae Asset Daewoo Research estimates

Mirae Asset Daewoo Research April 3, 2019 Chemicals/Oil Refining/Solar PV

Table 1. Quarterly and annual earnings (Wbn) 1Q18 2Q18 3Q18 4Q18 1Q19F 2Q19F 3Q19F 4Q19F 2018 2019F 2020F

Revenue 6,553.6 7,051.9 7,234.9 7,342.7 7,186.0 7,920.5 8,392.8 9,302.8 28,183.0 32,802.2 38,724.6

Chemicals 4,359.1 4,671.2 4,648.9 4,356.8 4,261.9 4,524.7 4,554.3 4,485.0 18,036.0 17,825.9 18,109.9 I&E 759.8 764.6 847.2 901.6 792.6 838.1 844.9 858.1 3,273.2 3,333.7 3,462.9 Battery 1,244.5 1,494.0 1,704.3 2,076.9 1,747.3 2,211.8 2,735.6 3,726.2 6,519.7 10,420.8 15,864.9 Red bio 131.1 150.9 135.3 157.8 144.2 166.0 167.9 173.6 575.1 651.7 716.9 Green bio 236.9 187.6 92.1 83.1 240.0 180.0 90.0 60.0 599.7 570.0 570.0 Operating 650.8 703.3 602.4 289.6 327.2 536.9 640.8 677.5 2,246.1 2,182.4 2,989.0

profit Chemicals 636.9 704.5 547.7 242.0 372.9 457.4 485.0 479.6 2,131.1 1,794.8 1,935.8 I&E -9.7 -21.9 11.8 -8.5 -4.2 -5.6 4.0 4.2 -28.3 -1.6 24.1 Battery 2.1 27.0 84.3 95.8 -92.4 51.9 153.4 216.8 209.2 329.7 966.7

Red bio 7.0 15.8 13.2 13.5 5.8 8.3 8.4 6.9 49.5 29.4 32.3 Green bio 45.4 11.4 -18.8 -22.7 45.0 25.0 -10.0 -30.0 15.3 30.0 30.0 Pretax profit 653.2 644.3 485.1 157.5 291.2 488.8 580.8 614.7 1,940.0 1,975.5 2,685.2

Net profit 531.3 477.7 343.4 120.1 211.8 355.6 422.6 447.2 1,472.6 1,437.2 2,013.9 Source: Company data, Mirae Asset Daewoo Research estimates

Mirae Asset Daewoo Research April 3, 2019 Chemicals/Oil Refining/Solar PV

Kumho Petrochemical (011780 KS) Poised to benefit from China’s demand recovery and higher oil prices

Chemicals Chemicals cycle to improve on China’s demand recovery; Raise TP by 8% and maintain as a top pick Chemicals cycle to improve on China’s demand recovery: Following a slight rebound (Maintain) Buy driven by expectations for a recovery in the chemicals cycle, Kumho Petrochemical’s shares have largely traded sideways, as the pace of the recovery has proven to be slower Target Price (12M, W) ▲ 130,000 than anticipated. Looking forward, we see a strong likelihood the chemicals cycle will recover further, as China’s unusually sluggish demand for autos and appliances (end- Share Price (04/02/19, W) 97,300 markets) should normalize on the back of policy efforts to boost consumption. Once demand picks up, we expect to see a robust recovery in ABS and BPA spreads, given Expected Return 34% tight supply. As for synthetic rubber, there is still a lot of excess capacity in the market, but we still think spreads will strengthen from current levels as demand improves. OP (19F, Wbn) 493 Consensus OP (19F, Wbn) 470 Likely to benefit from higher oil prices; Raise TP by 8% and maintain as top pick: The recent rise in oil prices caused by tight supply should prove favorable to the EPS Growth (19F, %) -7.4 company’s energy business. Oil supply is gradually tightening as a result of slowing Market EPS Growth (19F, %) -12.1 output in the US and production cuts in Venezuela, putting upside pressures to prices. A P/E (19F, x) 7.2 rise in oil prices typically boosts Kumho Petrochemical’s energy earnings by lifting Market P/E (19F, x) 11.1 electricity ASP. Reflecting the more resilient-than-expected earnings environment, we KOSPI 2,177.18 slightly increase our 2019 earnings estimates and hence raise our target price by 8% to Market Cap (Wbn) 2,965 W130,000, which is based on 9x our three-year average EPS estimate. We maintain Kumho Petrochemical as one of our top picks in chemicals, as we expect the stock to Shares Outstanding (mn) 33 display one of the strongest upsides among pure chemical names. Free Float (%) 56.9 Foreign Ownership (%) 31.8 1Q19 preview: OP to be in line with consensus Beta (12M) 1.06 1Q19F OP of W115.4bn: We forecast 1Q19 operating profit to come in at W115.4bn, in 52-Week Low 80,100 line with the consensus. Synthetic rubber earnings likely improved QoQ, thanks to the 52-Week High 117,000 removal of the impact of higher-priced inventory in 4Q18, and a rebound in butadiene (%) 1M 6M 12M prices. Synthetic resin earnings also likely improved QoQ on the back of better ABS Absolute 1.7 9.0 1.6 spreads. On the other hand, we believe phenol derivative earnings slightly softened QoQ Relative 2.5 15.6 14.0 due to weakness in acetone. Energy earnings likely also declined on lower electricity ASP.

130 Kumho Petrochemical KOSPI 2Q19 OP to improve further to W129.4bn 120 OP to improve further in 2Q19: We project 2Q19 operating profit to improve further to 110 W129.4bn. After hitting bottom late last year, BPA and ABS spreads have been picking up 100 and are likely to gain further traction as China’s auto and appliance sales normalize on 90 the back of policy support. 80 70 3.18 7.18 11.18 3.19

메일@ miraeasset.com FY (Dec.) 12/16 12/17 12/18F 12/19F 12/20F 12/21F Revenue (Wbn) 3,970 5,065 5,585 5,651 6,032 6,101 OP (Wbn) 157 263 554 493 564 594 OP Margin (%) 4.0 5.2 9.9 8.7 9.4 9.7 NP (Wbn) 73 214 491 455 514 483 EPS (W) 2,187 6,377 14,671 13,587 15,334 14,428 ROE (%) 4.6 12.3 23.4 17.7 17.1 13.9 P/E (x) 37.5 15.6 6.0 7.2 6.3 6.7 P/B (x) 1.7 1.8 1.2 1.2 1.0 0.9 Dividend Yield (%) 1.0 1.0 1.7 1.5 1.5 1.5 Note: All figures are based on consolidated K-IFRS; NP refers to net profit attributable to controlling interests Source: Company data, Mirae Asset Daewoo Research estimates

Mirae Asset Daewoo Research April 3, 2019 Chemicals/Oil Refining/Solar PV

Table 2. Quarterly and annual earnings (Wbn) 1Q18 2Q18 3Q18 4Q18 1Q19F 2Q19F 3Q19F 4Q19F 2018 2019F 2020F Revenue Total 1,339.9 1,441.8 1,450.6 1,352.6 1,333.9 1,435.2 1,502.2 1,379.3 5,584.9 5,650.6 6,032.3 Synthetic rubber 474.5 516.6 539.5 484.8 462.1 519.7 577.4 462.1 2,015.4 2,021.3 2,316.3 Synthetic resins 299.6 324.1 320.7 281.3 286.1 336.8 336.8 336.8 1,225.7 1,296.5 1,351.5 Phenol derivatives 416.2 452.9 453.6 433.5 433.1 433.1 433.1 433.1 1,756.2 1,732.3 1,732.3 Energy and other 149.6 148.2 136.8 153.0 152.7 145.6 154.9 147.4 587.6 600.6 632.2 Operating Total 165.8 153.5 151.0 83.9 115.4 129.4 138.4 109.4 554.2 492.5 563.6 profit Synthetic rubber 33.2 41.3 27.0 4.8 23.1 26.0 28.9 23.1 106.4 101.1 139.0 Synthetic resins 24.0 16.2 9.6 -8.4 11.4 16.8 16.8 13.5 41.4 58.6 60.8 Phenol derivatives 66.6 67.9 77.1 43.4 39.0 52.0 52.0 52.0 255.0 194.9 207.9 Energy and other 42.0 28.0 37.3 44.1 41.9 34.6 40.7 20.8 151.5 138.0 155.9 Pretax profit 194.2 181.2 162.4 78.2 143.5 158.3 168.1 139.2 616.0 609.2 687.5 Net profit 132.1 175.3 122.4 61.5 107.2 118.2 125.6 104.0 491.3 455.1 513.6 Source: Company data, Mirae Asset Daewoo Research estimates

Mirae Asset Daewoo Research April 3, 2019 Chemicals/Oil Refining/Solar PV

OCI (010060 KS) Polysilicon prices to remain weak in the near term, but meaningfully recover in 2H19

Chemicals Market to remain weak in the near term, but meaningfully recover in 2H19; Reiterate as top pick Market to remain weak in the near term due to unfavorable seasonality, but (Maintain) Buy recover in 2H19: OCI’s shares have remained range-bound at depressed levels, due to the sustained weakness in polysilicon prices. Demand in China has been held back by Target Price (12M, W) 140,000 delays to the finalization of the government’s solar PV policy, while demand elsewhere is seasonally weakening with the conclusion of the peak season in India and Japan. Share Price (04/02/19, W) 96,900 Furthermore, additional polysilicon capacities have come online, increasing supply pressures. As such, we expect polysilicon prices to remain weak in the near term. Expected Return 44% Meaningful recovery expected in 2H19; Still a top pick: However, we expect demand

OP (19F, Wbn) 62 conditions to begin to improve in mid-2Q19. Chinese demand should recover once the Consensus OP (19F, Wbn) 149 government finalizes and announces its solar PV policy, and demand elsewhere should also gradually improve on the back of falling power generation costs. And with EPS Growth (19F, %) -80.0 polysilicon capacity expansions set to come to an end in 1H19, we think polysilicon prices Market EPS Growth (19F, %) -12.1 will meaningfully recover alongside demand in 2H19. In the near term, the stock could P/E (19F, x) 111.2 continue to trade sideways due to lackluster earnings. Nonetheless, we see limited Market P/E (19F, x) 11.1 downside risks, as share prices and polysilicon prices are already at extremely low levels. KOSPI 2,177.18 In the near term, we believe China’s policy announcement will be key. In the medium Market Cap (Wbn) 2,311 term, we expect the polysilicon cycle to meaningfully recover. We reaffirm our Buy rating and target price of W140,000 on OCI and reiterate the stock as our top pick in the solar Shares Outstanding (mn) 24 PV space. Free Float (%) 77.6 Foreign Ownership (%) 24.0 1Q19 preview: Operating losses to continue on weak polysilicon prices Beta (12M) 1.77 1Q19F operating loss of W25.9bn: For 1Q19, we expect OCI to post an operating loss of 52-Week Low 81,200 W25.9bn, in line with the consensus. In basic chemicals (which include polysilicon), losses 52-Week High 169,000 likely continued due to weak polysilicon prices, while petrochemical/carbon chemical (%) 1M 6M 12M earnings likely improved QoQ on the dissipation of the impact of maintenance. Absolute -10.3 -16.1 -38.3 Relative -9.5 -11.0 -30.7 Watch for China’s policy announcement; Meaningful recovery expected in 2H19 120 OCI KOSPI Watch for China’s policy announcement in the near term; Meaningful recovery 100 expected in 2H19: Polysilicon prices, OCI’s biggest earnings variable, are likely to remain weak, weighed down by seasonally sluggish demand and increased supply. However, 80 given how far prices have fallen, we expect prices to meaningfully recover once demand 60 picks up. This should have a particularly large impact on OCI, as the company’s ongoing debottlenecking project in Malaysia, once completed, is expected to lower 40 3.18 7.18 11.18 3.19 manufacturing costs by around 20%.

메일@ miraeasset.com FY (Dec.) 12/16 12/17 12/18 12/19F 12/20F 12/21F Revenue (Wbn) 2,737 3,632 3,112 3,299 3,633 3,633 OP (Wbn) 133 284 159 62 354 393 OP Margin (%) 4.9 7.8 5.1 1.9 9.7 10.8 NP (Wbn) 242 235 104 21 255 298 EPS (W) 10,151 9,849 4,352 872 10,701 12,507 ROE (%) 7.9 7.2 3.1 0.6 7.2 7.8 P/E (x) 7.8 13.8 24.6 111.2 9.1 7.7 P/B (x) 0.6 1.0 0.7 0.7 0.6 0.6 Dividend Yield (%) 0.5 1.4 0.8 0.9 0.9 0.2 Note: All figures are based on consolidated K-IFRS; NP refers to net profit attributable to controlling interests Source: Company data, Mirae Asset Daewoo Research estimates

Mirae Asset Daewoo Research April 3, 2019 Chemicals/Oil Refining/Solar PV

Table 3. Quarterly and annual earnings (Wbn) 1Q18 2Q18 3Q18 4Q18 1Q19F 2Q19F 3Q19F 4Q19F 2018 2019F 2020F Revenue Total 857.0 785.1 765.6 704.4 767.9 803.8 895.7 831.5 3,112.1 3,298.9 3,632.7 Basic chemicals 427.0 381.0 298.0 294.0 324.7 349.7 438.8 419.8 1,400.0 1,533.0 1,823.8 Petrochemicals/ 410.0 367.0 343.0 306.0 402.1 413.1 415.8 370.6 1,426.0 1,601.6 1,644.6 carbon chemicals Energy solutions 92.0 99.0 168.0 124.0 91.1 91.1 91.1 91.1 483.0 364.2 364.2 Operating Total 106.3 79.9 15.6 -43.2 -25.9 -9.5 47.5 50.2 158.6 62.3 353.6 profit Basic chemicals 36.0 21.0 -59.0 -62.0 -74.9 -63.1 -6.5 7.3 -64.0 -137.1 131.4 Petrochemicals/ 68.0 54.0 54.0 12.0 42.3 47.0 47.4 36.3 188.0 173.0 191.1 carbon chemicals Energy solutions 9.0 14.0 27.0 11.0 11.6 11.6 11.6 11.6 61.0 46.4 51.1 Pretax profit 96.3 98.6 5.8 -71 -35.7 -18.6 39.1 41.9 129.4 26.7 327.9 Net profit 73.1 77.4 7.3 -54 -27.8 -14.5 30.4 32.6 103.8 20.8 255.2 Source: Company data, Mirae Asset Daewoo Research estimates

Mirae Asset Daewoo Research

Mirae Asset Daewoo Research Key Universe Valuations April 3, 2019

※All data as of close April 01, 2019, unless otherwise noted.

19F Earnings growth Mkt Cap Price P/E (x) P/B (x) ROE (%) Ticker Company Div Yield OP EPS (Wbn) (W) (%) 19F 20F 19F 20F 19F 20F 19F 20F 19F 20F 005930 Samsung Electronics 273,118 45,750 3.1 -49.5 39.0 -29.8 28.6 10.8 8.4 1.2 1.1 11.5 13.5 000660 SK Hynix 55,619 76,400 2.0 -80.2 113.4 -80.5 115.4 18.3 8.5 1.1 1.0 6.3 12.7 051910 LG Chem 26,260 372,000 1.6 -2.8 37.0 -2.4 40.1 20.3 14.5 1.6 1.5 8.2 10.7 005380 Hyundai Motors 25,427 119,000 3.4 55.6 13.6 131.7 15.5 9.6 8.3 0.5 0.4 4.9 5.5 068270 Celltrion 23,838 190,000 - - - - 0.0 0.0 005490 POSCO 23,279 267,000 3.7 -17.7 8.6 64.7 9.5 8.4 7.6 0.5 0.5 6.2 6.5 051900 LG H&H 21,850 1,399,000 0.8 12.5 9.5 15.3 10.4 27.7 25.1 6.0 5.1 19.9 18.8 055550 21,244 44,800 4.6 4.5 6.8 3.1 6.3 6.1 0.5 0.5 9.0 8.7 028260 Samsung C&T 20,676 109,000 1.8 5.4 20.1 -4.2 20.7 16.4 13.6 0.8 0.7 5.2 5.9 035420 NAVER 20,519 124,500 0.2 -2.3 14.6 -5.0 12.2 33.9 30.2 2.9 2.7 10.7 10.9 017670 SK Telecom 20,267 251,000 4.0 7.5 10.3 -6.0 2.4 6.9 6.8 0.8 0.7 12.5 11.6 012330 20,199 207,500 1.7 9.1 10.2 27.0 7.4 8.4 7.8 0.6 0.6 7.5 7.6 015760 KEPCO 19,419 30,250 1.3 - 11.5 - 20.7 15.8 13.1 0.3 0.3 1.7 2.1 034730 SK Holdings 19,138 272,000 1.8 25.1 10.0 5.4 8.6 9.3 8.6 1.0 0.9 12.3 12.0 105560 KB Financial Group 18,815 45,000 17.4 4.2 17.6 4.5 5.2 5.0 0.5 0.4 9.7 9.4 018260 Samsung SDS 17,913 231,500 1.2 13.5 12.6 12.6 11.5 24.4 21.9 2.7 2.5 11.6 11.9 032830 Samsung Life 16,900 84,500 - - - - 0.0 0.0 096770 SK Innovation 16,875 182,500 4.4 -7.3 6.3 -14.0 6.6 12.0 11.3 0.9 0.8 7.7 7.9 006400 Samsung SDI 14,956 217,500 0.5 24.0 26.5 -7.6 49.8 23.6 15.8 1.2 1.1 5.3 7.5 033780 KT&G 14,416 105,000 4.0 15.1 7.2 18.2 7.6 13.4 12.5 1.6 1.5 12.8 12.9 000270 Motors 14,228 35,100 2.3 20.5 19.7 54.5 16.7 8.0 6.8 0.5 0.5 6.3 7.0 000810 Samsung F&M 14,047 296,500 - - - - 0.0 0.0 003550 LG Corp. 13,442 77,900 3.0 19.4 13.3 7.4 13.6 6.8 6.0 0.7 0.6 10.6 11.0 066570 LG Electronics 12,421 75,900 1.0 8.7 20.3 33.0 43.4 8.3 5.8 0.9 0.8 11.0 14.0 086790 Hana Financial Group 11,709 39,000 10.4 6.7 11.3 6.9 4.7 4.4 0.4 0.4 9.0 8.8 090430 AmorePacific 11,253 192,500 0.8 19.5 13.3 21.4 14.5 27.9 24.4 2.8 2.6 8.8 9.3 036570 NCsoft 10,783 491,500 1.5 37.8 26.3 49.2 19.3 17.3 14.5 3.0 2.6 19.4 19.8 011170 Lotte Chemical 10,317 301,000 3.5 -15.9 14.9 -7.2 13.8 6.7 5.9 0.7 0.7 11.5 11.9 251270 10,275 120,500 0.3 44.7 60.1 49.8 43.7 37.0 25.8 2.2 2.0 6.0 8.1 010950 S-Oil 10,166 90,300 4.0 115.1 43.8 252.7 53.9 11.6 7.5 1.4 1.3 13.2 18.0 091990 Celltrion Healthcare 9,556 68,000 87.4 59.9 33.6 53.5 44.4 29.0 4.8 4.2 11.1 15.2 010130 Korea Zinc 8,935 473,500 2.1 10.1 6.4 25.8 6.1 13.4 12.6 1.3 1.2 10.2 10.1 035720 8,631 103,500 0.1 128.8 104.5 638.2 102.5 78.9 39.0 2.1 2.0 2.7 5.2 024110 8,365 14,550 6.7 3.8 4.8 4.1 5.2 5.0 0.4 0.4 8.5 8.3 009150 Samsung Electro-Mechanics 8,030 107,500 1.0 -8.0 25.4 -8.7 27.5 13.9 10.9 1.5 1.4 11.8 13.4 034220 LG Display 7,138 19,950 2.5 -52.4 866.7 - - - 119.6 0.5 0.5 - 0.4 030200 KT 7,128 27,300 3.7 -1.1 13.9 17.2 18.3 9.0 7.6 0.5 0.5 6.0 6.7 032640 LG Uplus 6,833 15,650 4.2 -5.7 9.9 -12.2 16.3 16.5 14.2 1.0 0.9 6.0 6.8 004020 6,245 46,800 1.6 31.1 5.1 95.2 6.6 8.0 7.5 0.4 0.3 4.5 4.6 018880 Hanon Systems 6,112 11,450 - - - - 0.0 0.0 000720 Hyundai E&C 5,935 53,300 0.9 24.1 12.9 22.8 4.4 12.7 12.2 0.9 0.8 7.1 7.0 128940 Hanmi Pharmaceutical 5,365 462,000 0.1 62.8 4.9 82.5 4.2 58.1 55.7 6.2 5.6 11.5 10.8 023530 Lotte Shopping 5,092 180,000 2.9 6.5 3.9 - 10.5 12.7 11.5 0.4 0.4 3.4 3.7 086280 Hyundai Glovis 4,950 132,000 2.3 4.6 2.9 32.9 1.2 8.5 8.4 1.0 0.9 12.9 11.8 097950 CJ CheilJedang 4,908 326,000 1.1 9.6 10.4 -65.0 10.2 17.2 15.6 1.0 1.0 6.3 6.6 005830 DB Insurance 4,850 68,500 - - - - 0.0 0.0 139480 Emart 4,809 172,500 1.2 14.5 3.0 -5.0 6.3 11.2 10.6 0.6 0.5 5.1 5.2 036460 KOGAS 4,316 46,750 3.2 5.7 2.5 17.9 15.9 7.2 6.2 0.5 0.5 7.1 7.8 029780 Samsung Card 4,038 34,850 -12.6 4.2 -11.6 7.7 13.1 12.2 0.6 0.5 1.3 1.4 271560 Orion 3,993 101,000 0.6 11.4 9.8 20.6 13.3 18.6 16.5 2.4 2.2 14.0 14.0 Source: Mirae Asset Daewoo Research

Mirae Asset Daewoo Research Market Data April 3, 2019

※All data as of close April 02, 2019, unless otherwise noted.

Other Major Indices Economic Indicators Close Net Chg 1D (%) YTD (%) Close 1D ago 1M ago 1Y ago MSCI Korea* 455.21 6.57 1.46 6.13 USD/KRW 1,132.70 1,136.10 1,117.80 1,064.40 KOSPI 2,177.18 8.90 0.41 8.32 JPY100/KRW 1,016.70 1,024.11 1,007.62 1,000.80 KOSDAQ 739.57 2.76 0.37 10.49 EUR/KRW 1,269.30 1,274.99 1,271.50 1,311.07 Dow Jones* 26,258.42 329.74 1.27 12.56 3Y Treasury 1.71 1.73 1.81 2.23 S&P 500* 2,867.19 32.79 1.16 14.23 3Y Corporate 2.18 2.20 2.26 2.80 NASDAQ* 7,828.91 99.59 1.29 17.45 DDR2 1Gb* 1.06 1.06 1.11 1.34 Philadelphia Semicon* 1,430.24 34.73 2.49 22.74 NAND MLC 64G* 2.36 2.36 2.49 3.84 FTSE 100* 7,317.38 38.19 0.52 8.66 Oil (Dubai)* 68.23 67.23 66.56 65.33 Nikkei 225 21,505.31 -3.72 -0.02 9.93 Gold* 1,288.40 1,293.00 1,299.20 1,322.80 Hang Seng* 29,562.02 510.66 1.76 17.63 Customer deposits (Wbn)* 28,050 24,960 25,500 27,001 Taiwan (Weighted) 10,690.30 47.67 0.45 11.89 Equity type BC (Wbn)(Mar. 29) 85,384 85,157 87,664 81,157 Note: * as of April 01, 2019 Source: KSDA, FnGuide, 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 140.51 Hotel Shilla 13.71 Samsung Biologics 22.38 Samsung Electronics 59.38 KB Financial Group 35.96 SK Telecom 11.79 KODEX Leverage 13.30 Hyundai Mobis 16.71 Hynix 24.95 Samsung F&M Insurance 6.91 Hynix 11.27 Aekyung Industrial 14.12 SEMCO 15.60 Aekyung Industrial 6.79 SEMCO 10.94 KODEX 200 Futures Inverse 2X 11.92 Samsung SDI 13.84 Woori Financial Group 5.35 KODEX Kosdaq150 Leverage 10.53 Hyundai Motor 10.97 Hana Financial Group 11.66 Woongjin Coway 5.15 KODEX KOSDAQ150 INVERSE 10.42 Korean Air Lines 8.34 Celltrion 10.27 ORION 5.09 KB Financial Group 10.01 LG Household & Health Care 8.03 Hyundai Mobis 10.17 Korea Gas Corp. 5.02 KODEX 200 7.20 SK Telecom 7.80 POSCO 9.31 KODEX 200 4.92 Celltrion 6.31 KT 6.80 Shinhan Financial Group 9.08 Hanssem 4.74 Daewoong Pharm. 5.89 Samsung SDI 6.75 Source: KSDA, FnGuide

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 Medy-tox 15.01 Emerson Pacific 6.53 JYP Entertainment 10.35 Kolon Life Science 16.59 JYP Entertainment 8.79 ABL Bio 5.99 SM 5.59 Kolon TissueGene 9.78 Spigen Korea 5.89 Posco Chemtech 5.12 Wemade 3.34 Mezzion Pharma 2.64 Partrion 3.17 Wemade 4.66 Sam Chun Dang Pharm. 3.33 Medy-tox 2.58 Kolon Life Science 2.59 Tes 2.78 PearlAbyss 1.82 Vespa 2.49 Energy Solutions 2.29 ASTK 2.33 Esmo 1.51 ECOPROBM 2.00 1.94 SillaJen 2.29 Spigen Korea 1.35 Jenexine 1.96 Mezzion Pharma 1.86 SM 2.21 Partrion 1.31 Sang-A Frontec 1.93 Com2us 1.72 Celltrion Healthcare 2.02 Woori Technology 1.23 SillaJen 1.83 CHA Biotech 1.57 Alteogen 1.84 CLIO Cosmetics 1.23 Studio Dragon 1.54 Source: KSDA, FnGuide

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 45,750 700 273,118 Celltrion Healthcare 68,000 1,200 9,556 Hynix 76,400 -200 55,619 CJ ENM 232,200 4,000 5,091 Samsung Electronics (P) 37,000 600 30,447 SillaJen 64,400 -300 4,531 LG Chem 372,000 1,500 26,260 ViroMed 277,000 2,100 4,420 Hyundai Motor 119,000 -1,500 25,427 Posco Chemtech 59,300 -700 3,503 Celltrion 190,000 8,000 23,838 Medy-tox 615,100 18,200 3,479 POSCO 267,000 500 23,279 HLB 80,100 0 3,143 Samsung Biologics 349,000 21,500 23,092 Studio Dragon 90,300 400 2,533 LG Household & Health Care 1,399,000 -16,000 21,850 PearlAbyss 170,700 3,500 2,222 Shinhan Financial Group 44,800 1,050 21,244 Celltrion 57,400 1,500 1,955 Source: Korea Exchange