Display/Electronic Materials

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.

Reaching a turning point

2017 Outlook | December 2, 2016

Display/Electronic Materials

Analyst | Young [email protected]

Research Assistant | Chuljoong [email protected]

Contents

[Summary] Supply and demand to be in balance in 2017 3

I. Display market overview 4

II. 2017 outlook 7

III. 2017 issues 14

IV. 2017 strategy 16

V. Global peer valuations 18

VI. Top picks and stocks to watch 20

Mirae Asset Daewoo Research3| 2017 Outlook [Display/Electronic Materials]

Source: Mirae Asset Daewoo Research

2017: Concerns over LCD to ease; Time for a smooth transition to OLED

[Summary] Supply and demand to be in balance in 2017

-10

-8

-6

-4

-2

0

2

4

6

0

9,000

18,000

27,000

36,000

45,000

54,000

63,000

05 06 07 08 09 10 11 12 13 14 15 16 17 18

Panel price change (R) LG Display share price (L)(W) (%)

Moderation of panel price slowdown= Switch to LCD up cycle

Up cycle of LCD TV penetration

Recovery afterglobal financial

crisis

Demand decrease;

Supply increase

Growth of Chinese LCD TV

market

Reduction of investment

iPhone 6;TV size increase

17F 18F

Supply decrease; TV size increase

[Negatives]1) Supply increase due to Chinese production2) Absence of new applications

[Positives]1) Increase in average TV size2) Growth of OLED market; Domestic OLED

equipment companies to benefit

Demand decrease;

Supply increase


Source: IHS, Mirae Asset Daewoo Research Source: IHS, Mirae Asset Daewoo Research

39.5-40"12%

Other88%

% of 40” panels in 1H1640” panel M/S (as of October 2016)

• At end-2015, display makers were focusing on survival, not recovery.

• In the wake of the 6.4-magnitude earthquake in Taiwan, Innolux, and Hanstar experienced production disruptions.

• Samsung Display saw a decline in production yield due to process migration.

• All in all, supply, especially for 40” panels, was disrupted through 2Q.

Unexpected external factors boosted the market

I. Display market overview

0%

20%

40%

60%

80%

100%

40" 42" 43" 45" 47" 48" 49"

LG Display Samsung Display AUO Innolux Sharp BOE CSOT



35.9''

37.3''

38.4''

40.2''

41.1''

42.4''

32.0''

34.0''

36.0''

38.0''

40.0''

42.0''

44.0''

2013 2014 2015 2016F 2017F 2018F

% of shipments by size Average TV size trend

• The average TV size has gotten bigger by approximately 2” YoY.

• 40” TVs are currently most popular.

• Samsung Display is slated to suspend 7G production.

• We are seeing growing demand for 40” panels ahead of the 7G shutdown by Samsung Display.

TV screen sizes likely to continue to get bigger


0

10

20

30

40

50

60

1/14 7/14 1/15 7/15 1/16 7/16

(%)

32" and smaller

40-50"

Larger than 50"


Source: Bloomberg, Mirae Asset Daewoo Research Source: IHS, Mirae Asset Daewoo Research

TV makers’ ASP declined YoY in 3Q16 Margins of TV makers

• Major TV makers are maximizing profits with a focus on high-end products.

• Chinese makers are offering aggressive price cuts to penetrate overseas markets.

• In China, online competition is fierce.

• Non-Chinese producers are improving margins, while Chinese makers are seeing limited margins.

• In 1H16, TV sales in China reached 2,351 units (+6.9% YoY), or RMB71bn (-4% YoY).

Chinese makers vs. top-tiers Quantity vs. quality


-6

-3

0

3

6

9

12

1Q14 3Q14 1Q15 3Q15 1Q16 3Q16

(%)LGE HE business

TCL

Hisense

SEC CE business

0

5

10

15

20

25

30

35

(%)



80

90

100

110

120

130

140

150

160

0

10

20

30

40

50

1Q10 1Q11 1Q12 1Q13 1Q14 1Q15 1Q16 1Q17F

Demand (L) Supply (L) Oversupply ratio (R)

(mn m2) (%)

Loose

Tight

LCD capex to continue

BOE 8G: 60,000 sheets/month

Innolux 8G, 6G: 40,000 sheets/month

• In 2017, major panel suppliers are expected to bring their new plants online.

• We expect supply area growth to be just 1% YoY, affected by the suspension of Samsung Display’s 7G line in late 2016.

• We forecast demand area growth to be 3% YoY, implying balanced supply and demand.

• Key issues to watch in 2017 will be OLED capex and potential OLED production by non-Samsung suppliers.

LCD market to be stable; OLED deserves continued attention

LCD demand and supply

II. 2017 outlook



Factory Phase Technology Gen.Â000 sheets/

month1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18

BOE

Fuqing B101 a-Si 8 75

2 a-Si 8 75

Hefei B9

1 a-Si 10.5 40

2 a-Si 10.5 40

3 a-Si 10.5 40

Chongqing B8 4 a-Si/Oxide 8 30

Ordos B6 LTPS 2 LTPS 5.5 30

CEC Panda PND Chengdu1 a-Si/Oxide 8.6 60

2 a-Si/Oxide 8.6 60

Tianma Xiamen 2 LTPS1 LTPS 6 15

2 LTPS 6 15

CSOT

Shenzhen T2 2 a-Si/Oxide 8 60

Wuhan LTPS T31 LTPS 6 15

2 LTPS 6 15

CSOT T6 1 a-Si 10.5 60

AUO

Taichung L8B3 a-Si 8 27

4 a-Si 8 13

FVO Kunshan LTPS1 LTPS 6 13

2 LTPS 6 12

InnoluxKaohsiung Fab 8_B 1 a-Si 8.6 40

CMO Tainan Fab 5 2 a-Si/Oxide 5 5

Sharp Kameyama 2 Oxide 3 a-Si/Oxide 8 20

LG Display

Guangzhou 21 a-Si 8 50

2 a-Si 8 50

Paju P8 7 a-Si/Oxide 8 25

Gumi AP3 LTPS 3 LTPS 6 8

JDI Hakusan D3 LTPS 1 LTPS 6 25

( ( Order equipment Install Produce)

II. 2017 outlook: LCD capex schedule


Note: Max. = ‘000 sheets/monthSource: IHS, Mirae Asset Daewoo Research

Factory Phase Tech. Gen. App. Type Max. 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18

JDI Mobara J1 2 LTPS 6 Mobile Rigid/flexible 24

JOLED JOLED 2 1 Oxide 8 IT Rigid/flexible 15

Sharp Sakai1 LTPS 6 Mobile Rigid/flexible 30

2 LTPS 6 Mobile Rigid/flexible 30

Tianma

Shanghai1 LTPS 5.5 Mobile Rigid 15

2 LTPS 5.5 Mobile Rigid/flexible 15

Wuhan1 LTPS 6 Mobile Rigid/flexible 30


Truly Huizhou B1 LTPS 4 Mobile Rigid 15


VisionoxKunshan 3

1 LTPS 5.5 Mobile Rigid 16

2 LTPS 5.5 Mobile Rigid 44

VSX Gu'an 1 LTPS 6 Mobile Rigid/flexible 60

EDO

Shanghai1

1 LTPS 4 Mobile Rigid 15



Shanghai 21 LTPS 6 Mobile Rigid/flexible 15


BOE B7




CSOT CSOT T4 1 LTPS 6 Mobile Rigid/flexible 60

AUO L4B 1 LTPS 4 Mobile Rigid 15

OLED investments for in-house production

Royole (Oppo, Vivo)

Huawei

• In 2016, OLED capex was equivalent to around 180,000 sheets/month, led by Samsung Display.

• In 2017, we expect OLED capex to be about 220,000 sheets/month, led by China.

• OLED investments should continue for some time, given the increasing adoption of OLED by smartphone makers.

• Domestic OLED equipment suppliers warrant continued attention.

• In 2017, Samsung Display should continue to have significant influence over the small/mid-sized OLED market.

2016 is just the beginning

Foreign display makers’ OLED investment schedule

II. 2017 outlook: OLED spending to continue


Note: Max. = ‘000 sheets/monthSource: IHS, Mirae Asset Daewoo Research

( ( Order equipment Install Produce)

Factory Phase Tech. Gen. App. Type Max. 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18

LG Display

AP2-E2


2 LTPS 4 Mobile Flexible 10



AP2-E5




P9-E6 G6 OLED




M2-E4-1 1 Oxide 8 TV Rigid 26

M2-E4-3 1 Oxide 8 TV Rigid/flexible 24

P9 WOLED E4-2 1 Oxide 8 TV Rigid/flexible 24

Samsung Display

A1 1/2/3 LTPS 4 Mobile Rigid 90

A2

1/2 LTPS 5.5 Mobile Rigid 224

3 LTPS 5.5 Mobile Rigid/flexible 32

4/5/6 LTPS 5.5 Mobile Rigid 296

7/8 LTPS 5.5 Mobile Rigid/flexible 96

A2-E 9 LTPS 5.5 Mobile Rigid 60

A3









SD A4 (L7-1)






II. 2017 outlook: Domestic OLED capex schedule



Inventory levels based on forward weeks of supplyInventory levels by panel maker

• The inventory levels of both set and panel makers are relatively benign.

• We believe the main driver has been pull-in demand in advance of the planned suspension of Samsung Display’s 7G line.

• We expect full operation to continue for some time.

Benign inventory levels

II. 2017 outlook: Low inventory burden

0

500

1,000

1,500

2,000

2,500

3,000

1/15 7/15 1/16 7/16

(km2)

LG Display AUO BOE

Samsung Innolux Sharp

-1.5

-1.0

-0.5

0.0

0.5

1.0

1/15 7/15 1/16 7/16

(weeks)

ITTVOverall

NormalLevel

Normalizedlevel



-2.1

2.5

1.8

-0.4

-3

-2

-1

0

1

2

3

1Q17F 2Q17F 3Q17F 4Q17F

( %)

YoY growth of LCD panel supply (in terms of area) QoQ LCD capacity growth

• Samsung Display’s decision to shut down its 7G production line will affect 40” panel supply/demand conditions.

• LCD panel supply growth (in terms of area) will likely fall to the low single digits for the first time in 2017.

• In 2018, BOE’s 10.5G line and CSOT’s 11G line are likely to come online sequentially.

• However, it will take some time for 10G-or-higher lines to achieve key yield levels.

Limited supply growth

II. 2017 outlook: Supply growth to be limited

7.3

4.6 4.7

6.6

5.2

1.0

4.6

0

1

2

3

4

5

6

7

8

12 13 14 15 16 17F 18F

(%)


Source: IHS, Mirae Asset Daewoo Research Source: Mirae Asset Daewoo Research

Acquisition of Mexico fab

Brand licensing

M&A

M&A

Proprietary brand

Export strategies of Chinese TV makersTV ASP vs. panel ASP (40”)

• In 1H16, Chinese TV sales volume and value reached 23.51mn units (+6.9% YoY) and RMB71bn (-4% YoY), respectively.

• Intense price competition in the Chinese market: Internet brands such as Xiaomi and LeTV have launched aggressive marketing campaigns.

• Higher panel prices have been weighing on Chinese TV makers, which have adopted price cut-oriented export policies.

• LeTV has recently raised the prices of its TV products, Beijing Funshion has announced that it would discontinue low-end TV production.

• If TV sales are sluggish in 4Q16, panel supply/demand conditions will likely deteriorate in 1H17.

Concerns over profitability at Chinese TV makers

II. 2017 outlook: Chinese device makers

20

25

30

35

40

45

50

0

200

400

600

800

1Q11 1Q12 1Q13 1Q14 1Q15 1Q16

(%)(US$)

TV ASP (L) Panel ASP (L) Panel/TV ASP (R)


Source: AT&T Entertainment

If AT&TÊs DirecTV Now drives an increase in cord-cutting, competition will likely

intensify in the TV market

• AT&T launched DirecTV Now, which allows subscribers to watch 60 channels via a US$35 fixed monthly plan.

• DirecTV Now subscribers can watch via smartphones, tablets, and PCs, with AT&T offering data.

• The service combines AT&T’s telecom network, Warner Bros.’ content, and DirecTV’s customer base.

• AT&T’s unlimited data policy will likely increase consumption via mobile devices, rather than TV.

Implications of free data plans

III. 2017 issues: Telcos and cord-cutters


Source: Press release Source: Press release

OLED wallpaper and transparent displaySEC’s Serif TV

• Gaps in the market are deepening amid sharp advances in TV technology; We note growing interest in aesthetics.

• SEC’s Serif TV, which is three to four times more expensive than existing TVs, has drawn attention with its sophisticated design features.

• OLED displays will allow for more flexibility in TV designs going forward.

• A new high-end segment is likely to open up, as TVs are increasingly viewed as components of interior design (not just home appliances).

• TVs priced at US$2,500 or higher account for less than 1% of the market.

A new high-end market is opening up

III. 2017 issues: Advances in TV technology



• Materials stocks rallied in 2016.

• Semiconductor materials > OLED materials > battery materials

• Semiconductor materials demand is likely to pick up as semiconductor fabs crank up operations in 2H17.

• A recovery in the FPCB market should further boost the earnings of materials makers such as Innox.

Materials to continue outperformance in the coming year

Share performances (YTD)

IV. 2017 strategy: Materials, once again

-60

-30

0

30

60

HansolChemical

Innox Foosung Soulbrain SKMaterials

ENF Tech WonikMaterials

IljinMaterials

DNF DuksanNeolux

Ecopro Duksan Hi-Metal

(%)


Source: VLSI 2009 Source: Versum Materials

Materials consumption: 2D vs. 3D3D NAND process

• Sharp cuts to unit prices helped resolve issues regarding 3D NAND content.

• SK Hynix, Toshiba/SanDisk, and Micron/Intel have recently joined the 3D NAND competition.

• Additional layers (24 32 48 64) require more advanced etching and deposition techniques.

• Etchant demand will likely rise (Soulbrain and ENF Technology).

• SK Materials and Foosung should benefit from higher demand for WF6 (used in tungsten deposition).

3D NAND

IV. 2017 strategy: Materials, once again

> 2x

~ 1.5x

> 6x

0

1

2

3

4

5

6

7

WF6 NF3 C4F6

2D3D

(x)


LG Display

AUOInnoluxJDI

0.0

0.3

0.6

0.9

1.2

1.5

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0

(ROE, %)

(P/B, x)

BOE

V. Global peer valuations

Relative share performance

Source: Bloomberg, Mirae Asset Daewoo Research

P/B-ROE of global display firms (2017F)


Display

(Wbn, %, x) Market capRevenue Operating profit Net profit ROE P/E P/B EV/EBITDA

16F 17F 16F 17F 16F 17F 16F 17F 16F 17F 16F 17F 16F 17F

LG Display 10,162 26,556 29,176 1,070 1,629 550 1,017 4.5 8.0 18.5 10.0 0.8 0.8 3.5 2.8

SEC 246,048 200,193 209,145 27,873 33,642 21,404 25,614 12.0 13.3 12.1 9.9 1.4 1.3 3.5 3.1

AUO 4,039 11,911 12,152 296 531 174 421 2.4 5.4 23.4 9.4 0.6 0.6 3.8 3.4

Innolux 3,995 10,159 10,762 -105 373 -160 288 -1.6 3.4 - 11.8 0.5 0.5 3.5 3.2

Sharp 9,704 21,806 22,228 169 420 -387 83 -40.6 4.4 - 287.9 4.5 4.4 17.9 12.2

JDI 1,640 9,270 8,871 114 117 -134 24 -3.5 0.3 - 129.4 0.5 0.5 1.4 1.3

BOE 17,107 10,379 12,005 63 626 188 506 1.3 3.0 96.7 32.2 1.2 1.2 10.0 7.1

Average -3.6 5.4 37.7 70.1 1.4 1.3 6.2 4.7

0

50

100

150

200

11/15 2/16 5/16 8/16 11/16

(-1Y=100)

LG Display AUO Innolux

Sharp JDI BOE


V. Global peer valuations

Relative share performance


P/E-EPS growth of global electronics materials firms (2017F)


Electronic materials (Wbn, %, x)

Market capRevenue Operating profit Net profit ROE P/E P/B EV/EBITDA16F 17F 16F 17F 16F 17F 16F 17F 16F 17F 16F 17F 16F 17F

SK Materials 1,634 459 577 156 200 105 138 26.4 29.9 15.5 11.9 3.9 3.3 6.2 4.1

Soulbrain 865 735 845 115 139 85 99 16.0 16.1 10.1 8.7 1.5 1.3 5.1 4.1

Innox 229 229 252 12 28 10 23 7.2 14.4 22.5 10.1 1.4 1.2 10.3 6.5

Samsung SDI 6,313 5,232 6,186 -904 3 262 410 2.4 3.7 24.6 15.8 0.6 0.6 - 7.6

Iljin Materials 466 392 418 29 42 33 30 13.4 10.7 14.0 15.5 1.8 1.6 8.5 7.4

Shin-Etsu Chemical 38,260 12,700 13,269 2,417 2,622 1,714 1,856 8.0 8.2 22.4 20.5 1.8 1.7 9.0 8.3

Hitachi Chemical 5,516 5,487 5,673 537 577 377 414 9.8 10.2 15.0 13.7 1.4 1.3 5.6 5.2

Sumitomo Chemical 9,230 20,296 21,045 1,325 1,497 710 869 9.2 10.6 13.1 10.8 1.1 1.1 7.4 6.8

JSR 3,881 3,838 3,975 297 331 227 242 6.3 6.8 17.1 15.9 1.1 1.0 7.3 6.5

Nitto Denko 14,616 7,571 7,837 755 867 565 641 8.7 9.6 24.8 21.4 2.1 2.0 9.7 8.9

Versum Materials 3,100 1,113 1,169 322 335 180 198 4.6 64.1 15.1 15.6 - - 11.3 10.8 Average 10.2 16.7 17.7 14.5 1.7 1.5 8.0 6.9

0

50

100

150

200

250

11/15 2/16 5/16 8/16 11/16

(-1Y=100)

SK Materials SoulbrainInnox Iljin MaterialsShin-Etsu Chemical Hitachi ChemicalJSR

SK Materials

Soulbrain

Innox

Samsung SDI

Versum Materials

Shin-Etsu Chemical

Sumitomo Chemical

JSR

Nitto Denko

0

5

10

15

20

25

-40 -20 0 20 40 60 80 100 120 140

(EPS growth, %)

(P/E, x)


(Maintain)

Target Price (12M, W)

Share Price (12/1/16, W)

1,580

EPS Growth (17F, %)

Market EPS Growth (17F, %)

P/E (17F, x)

Market P/E (17F, x)

KOSPI

Market Cap (Wbn)

Shares Outstanding (mn) FY (Dec.) 12/12 12/13 12/14 12/15 12/16F 12/17F

Free Float (%) Revenue (Wbn) 29,430 27,033 26,456 28,384 26,556 29,176

Foreign Ownership (%) OP (Wbn) 912 1,163 1,357 1,626 1,070 1,629

Beta (12M) OP margin (%) 3.1 4.3 5.1 5.7 4.0 5.6

52-Week Low NP (Wbn) 233 426 904 967 550 1,017

52-Week High EPS (W) 652 1,191 2,527 2,701 1,537 2,841

(%) 1M 6M 12M ROE (%) 2.3 4.1 8.2 8.2 4.5 8.0

Absolute 2.2 11.4 13.4 P/E (x) 47.6 21.3 13.3 9.1 18.5 10.0

Relative 3.4 11.3 15.7 P/B (x) 1.1 0.9 1.1 0.7 0.8 0.8

Note: All figures are based on consolidated K-IFRS; NP refers to net profit attributable to controlling interests

Source: LG Display, Mirae Asset Daewoo Research estimates

32.2

0.64

20,950

32,150

10.0

9.6

1,983.75

10,162

358

62.1

OP (17F, Wbn) 1,629

Consensus OP (17F, Wbn)

84.9

10.9

Buy

37,000

28,400

Expected Return 30%

80

90

100

110

120

130

140

150

15.11 16.3 16.7 16.11

LG Display KOSPI

LG Display (034220 KS)Top pick

Looking for a smooth transition in 2017

2017 forecasts: Revenue of W29.2tr (+9.9% YoY) and OP of W1.6tr (+52.2% YoY)

• Optimistic outlook for the panel market in 2017

• Likely to maintain market position by making preemptive investments in large OLEDs and small-and mid-sized OLEDs

• Differentiated competitiveness thanks to M+ and OLED technologies

Risk factors

• Delays to small- and mid-sized OLED production

• Potential for sluggish demand

• Burden associated with massive investments


LG Display (034220 KS)Top pick

Comprehensive Income Statement (Summarized) Statement of Financial Condition (Summarized) Forecasts/Valuations (Summarized)

(Wbn) 12/14 12/15 12/16F 12/17F (Wbn) 12/14 12/15 12/16F 12/17F 12/14 12/15 12/16F 12/17F

Revenue 26,456 28,384 26,556 29,176 Current Assets 9,241 9,532 9,819 11,051 P/E (x) 13.3 9.1 18.5 10.0

Cost of Sales 22,667 24,070 23,032 24,866 Cash and Cash Equivalents 890 752 463 2,366 P/CF (x) 2.3 1.6 2.4 2.2

Gross Profit 3,789 4,314 3,524 4,310 AR & Other Receivables 3,546 4,188 4,462 4,142 P/B (x) 1.1 0.7 0.8 0.8

SG&A Expenses 2,431 2,689 2,454 2,681 Inventories 2,754 2,352 2,506 2,326 EV/EBITDA (x) 2.9 2.2 3.5 2.8

Operating Profit (Adj) 1,357 1,626 1,070 1,629 Other Current Assets 2,051 2,240 2,388 2,217 EPS (W) 2,527 2,701 1,537 2,841

Operating Profit 1,357 1,626 1,070 1,629 Non-Current Assets 13,726 13,046 15,370 15,468 CFPS (W) 14,802 15,049 11,902 13,053

Non-Operating Profit -115 -192 -202 -209 Investments in Associates 408 385 410 381 BPS (W) 31,948 34,076 34,328 36,670

Net Financial Income -61 -71 -81 -81 Property, Plant and Equipment 11,403 10,546 12,778 13,175 DPS (W) 500 500 500 500

Net Gain from Inv in Associates 18 19 5 0 Intangible Assets 577 839 869 603 Payout ratio (%) 19.5 17.5 31.0 16.5

Pretax Profit 1,242 1,434 868 1,420 Total Assets 22,967 22,577 25,189 26,518 Dividend Yield (%) 1.5 2.0 1.8 1.8

Income Tax 325 411 291 337 Current Liabilities 7,550 6,607 7,201 7,261 Revenue Growth (%) -2.1 7.3 -6.4 9.9

Profit from Continuing Operations 917 1,023 577 1,084 AP & Other Payables 4,900 4,264 4,501 4,532 EBITDA Growth (%) -3.0 3.1 -17.4 16.2

Profit from Discontinued Operations 0 0 0 0 Short-Term Financial Liabilities 968 1,416 1,713 1,813 Operating Profit Growth (%) 16.7 19.8 -34.2 52.2

Net Profit 917 1,023 577 1,084 Other Current Liabilities 1,682 927 987 916 EPS Growth (%) 112.2 6.9 -43.1 84.8

Controlling Interests 904 967 550 1,017 Non-Current Liabilities 3,634 3,265 4,970 5,335 Accounts Receivable Turnover (x) 8.0 7.5 6.3 6.9

Non-Controlling Interests 13 57 27 67 Long-Term Financial Liabilities 3,279 2,808 4,483 4,883 Inventory Turnover (x) 11.3 11.1 10.9 12.1

Total Comprehensive Profit 843 1,003 257 1,084 Other Non-Current Liabilities 355 457 487 452 Accounts Payable Turnover (x) 7.1 7.8 8.1 8.4

Controlling Interests 820 940 261 1,019 Total Liabilities 11,184 9,872 12,417 12,842 ROA (%) 4.1 4.5 2.4 4.2

Non-Controlling Interests 23 63 -4 65 Controlling Interests 11,431 12,193 12,283 13,121 ROE (%) 8.2 8.2 4.5 8.0

EBITDA 4,850 5,001 4,129 4,798 Capital Stock 1,789 1,789 1,789 1,789 ROIC (%) 8.0 8.8 4.8 7.8

FCF (Free Cash Flow) -118 362 -1,737 1,413 Capital Surplus 2,251 2,251 2,251 2,251 Liability to Equity Ratio (%) 94.9 77.7 97.2 93.9

EBITDA Margin (%) 18.3 17.6 15.5 16.4 Retained Earnings 7,455 8,159 8,527 9,365 Current Ratio (%) 122.4 144.3 136.4 152.2

Operating Profit Margin (%) 5.1 5.7 4.0 5.6 Non-Controlling Interests 352 512 489 556 Net Debt to Equity Ratio (%) 15.5 13.3 30.1 18.8

Net Profit Margin (%) 3.4 3.4 2.1 3.5 Stockholders' Equity 11,783 12,705 12,772 13,677 Interest Coverage Ratio (x) 12.4 12.7 8.8 10.6

Source: LG Display, Mirae Asset Daewoo Research estimates


(Maintain)



194

EPS Growth (17F, %)


P/E (17F, x)

Market P/E (17F, x)

KOSDAQ

Market Cap (Wbn)


Free Float (%) Revenue (Wbn) 254 191 212 338 459 577

Foreign Ownership (%) OP (Wbn) 50 7 26 113 156 200

Beta (12M) OP margin (%) 19.7 3.7 12.3 33.4 34.0 34.7

52-Week Low NP (Wbn) 29 0 14 66 105 138

52-Week High EPS (W) 2,756 33 1,289 6,270 9,979 13,061

(%) 1M 6M 12M ROE (%) 8.6 0.1 4.3 18.9 26.4 29.9

Absolute -0.3 30.8 33.6 P/E (x) 13.9 891.8 39.7 18.6 15.5 11.9

Relative 5.1 54.2 55.7 P/B (x) 1.2 1.0 1.7 3.3 3.9 3.3


Source: SK Materials, Mirae Asset Daewoo Research estimates

14.8

0.99

97,000

165,000

11.9

9.6

593.85

1,634

11

50.9

OP (17F, Wbn) 200


30.9

10.9

Buy

198,000

154,900

Expected Return 28%

70

80

90

100

110

120

130

140

150

160

170

15.11 16.3 16.7 16.11

SK Materials KOSDAQ

SK Materials (036490 KQ)Top pick

Poised for liftoff in 2017

2017 forecasts: Revenue of W577.1bn (+25.8% YoY) and OP of W200.5bn (+28.5% YoY)

• Rising demand for materials in light of growing downstream investments

• Supply and demand to tighten in 2017 given higher-than-expected NF3 demand

• Likely to acquire growth drivers with releases and sales of new products (e.g., via a SK Trichem joint venture)

• Potential new business opportunities thanks to SK Group’s support

Risk factors

• Delays to downstream investments

• Chinese makers’ aggressive capacity ramp-ups


SK Materials (036490 KQ)Top pick


(Wbn) 12/14 12/15 12/16F 12/17F (Wbn) 12/14 12/15 12/16F 12/17F 12/14 12/15 12/16F 12/17F

Revenue 212 338 459 577 Current Assets 119 165 217 367 P/E (x) 39.7 18.6 15.5 11.9

Cost of Sales 164 199 270 341 Cash and Cash Equivalents 18 41 71 191 P/CF (x) 6.5 7.2 5.3 3.7

Gross Profit 48 139 189 236 AR & Other Receivables 47 64 80 102 P/B (x) 1.7 3.3 3.9 3.3

SG&A Expenses 21 26 33 35 Inventories 46 58 64 71 EV/EBITDA (x) 9.6 8.2 6.2 4.1

Operating Profit (Adj) 26 113 156 200 Other Current Assets 8 2 2 3 EPS (W) 1,289 6,270 9,979 13,061

Operating Profit 26 113 156 200 Non-Current Assets 471 500 638 606 CFPS (W) 7,833 16,267 29,022 41,344


Net Financial Income -9 -7 -10 -11 Property, Plant and Equipment 450 480 614 583 DPS (W) 1,000 2,560 2,560 2,560

Net Gain from Inv in Associates -1 0 -2 -1 Intangible Assets 3 3 4 3 Payout ratio (%) 77.6 40.8 25.2 19.2

Pretax Profit 17 88 143 188 Total Assets 590 665 855 972 Dividend Yield (%) 2.0 2.2 1.7 1.7

Income Tax 4 22 36 48 Current Liabilities 105 145 235 263 Revenue Growth (%) 11.0 59.4 35.8 25.7

Profit from Continuing Operations 14 66 107 141 AP & Other Payables 31 39 49 63 EBITDA Growth (%) 20.6 122.4 81.1 42.8

Profit from Discontinued Operations 0 0 0 0 Short-Term Financial Liabilities 63 73 145 147 Operating Profit Growth (%) 271.4 334.6 38.1 28.2

Net Profit 14 66 107 141 Other Current Liabilities 11 33 41 53 EPS Growth (%) 3,806.1 386.4 59.2 30.9

Controlling Interests 14 66 105 138 Non-Current Liabilities 161 144 187 193 Accounts Receivable Turnover (x) 7.8 7.7 7.6 7.5

Non-Controlling Interests 0 0 2 3 Long-Term Financial Liabilities 157 127 166 166 Inventory Turnover (x) 4.7 6.5 7.5 8.6

Total Comprehensive Profit 11 64 106 141 Other Non-Current Liabilities 4 17 21 27 Accounts Payable Turnover (x) 13.3 15.0 17.9 17.8

Controlling Interests 11 64 104 137 Total Liabilities 267 289 422 456 ROA (%) 2.3 10.5 14.1 15.4

Non-Controlling Interests 0 0 2 4 Controlling Interests 323 376 420 501 ROE (%) 4.3 18.9 26.4 29.9

EBITDA 76 169 306 437 Capital Stock 5 5 5 5 ROIC (%) 4.0 16.3 19.3 22.7

FCF (Free Cash Flow) 23 63 99 175 Capital Surplus 68 68 34 34 Liability to Equity Ratio (%) 82.7 76.7 97.6 88.2

EBITDA Margin (%) 35.8 50.0 66.7 75.7 Retained Earnings 249 301 380 461 Current Ratio (%) 112.5 113.8 92.3 139.3

Operating Profit Margin (%) 12.3 33.4 34.0 34.7 Non-Controlling Interests 0 0 13 16 Net Debt to Equity Ratio (%) 60.6 42.1 55.5 23.7

Net Profit Margin (%) 6.6 19.5 22.9 23.9 Stockholders' Equity 323 376 433 517 Interest Coverage Ratio (x) 2.8 15.7 15.2 16.6

Source: SK Materials, Mirae Asset Daewoo Research estimates


(Maintain)



133

EPS Growth (17F, %)


P/E (17F, x)

Market P/E (17F, x)

KOSDAQ

Market Cap (Wbn)




Beta (12M) OP margin (%) 16.1 13.9 8.9 16.1 15.6 16.4

52-Week Low NP (Wbn) 74 62 38 81 85 99

52-Week High EPS (W) 4,631 3,844 2,336 4,878 5,145 5,983

(%) 1M 6M 12M ROE (%) 26.4 17.3 9.4 17.6 16.0 16.1

Absolute -19.1 6.3 34.5 P/E (x) 10.1 11.6 13.8 8.3 10.1 8.7

Relative -14.6 25.3 56.8 P/B (x) 2.3 1.8 1.2 1.3 1.5 1.3


Source: Soulbrain, Mirae Asset Daewoo Research estimates

29.4

0.84

35,300

67,500

8.7

9.6

593.85

865

17

51.8

OP (17F, Wbn) 139


16.3

10.9

Buy

77,000

52,200

Expected Return 48%

70

90

110

130

150

170

190

15.11 16.3 16.7 16.11

Soulbrain KOSDAQ

Soulbrain (036830 KQ)Top pick

A strong 3D NAND player

2017 forecasts: Revenue of W844.7bn (+15% YoY) and OP of W138.8bn (+20.9% YoY)

• Semiconductor materials: Demand to come from migration to 3D V-NAND and new lines in Pyeongtaek

• Display materials: Normalization of Chongqing factories

• Battery materials: Limited short-term growth potential, but likely to become future growth driver

Risk factors

• Losses related to delayed normalization of subsidiaries and Chinese factory

• Potential market share loss due to fierce competition


Soulbrain (036830 KQ)Top pick


(Wbn) 12/14 12/15 12/16F 12/17F (Wbn) 12/14 12/15 12/16F 12/17F 12/14 12/15 12/16F 12/17F





Operating Profit (Adj) 48 101 115 139 Other Current Assets 11 23 27 31 EPS (W) 2,336 4,878 5,145 5,983


Non-Operating Profit 5 9 -10 -10 Investments in Associates 64 160 182 207 BPS (W) 26,149 30,570 35,094 40,589

Net Financial Income -1 -1 -1 0 Property, Plant and Equipment 300 321 325 315 DPS (W) 450 500 500 500

Net Gain from Inv in Associates 8 3 -8 -7 Intangible Assets 13 13 12 12 Payout ratio (%) 20.0 10.0 9.5 8.2


Income Tax 17 30 20 31 Current Liabilities 144 223 225 236 Revenue Growth (%) -15.1 16.5 17.0 15.0

Profit from Continuing Operations 36 81 85 99 AP & Other Payables 27 35 39 45 EBITDA Growth (%) -28.7 64.4 22.4 13.7

Profit from Discontinued Operations 0 0 0 0 Short-Term Financial Liabilities 98 150 141 141 Operating Profit Growth (%) -45.5 110.4 13.9 20.9

Net Profit 36 81 85 99 Other Current Liabilities 19 38 45 50 EPS Growth (%) -39.2 108.8 5.5 16.3


Non-Controlling Interests -2 0 0 0 Long-Term Financial Liabilities 3 11 10 10 Inventory Turnover (x) 21.4 22.5 21.4 21.7



Non-Controlling Interests -2 0 0 0 Controlling Interests 424 495 569 661 ROE (%) 9.4 17.6 16.0 16.1


FCF (Free Cash Flow) 38 60 106 103 Capital Surplus 76 79 79 79 Liability to Equity Ratio (%) 36.1 48.5 41.8 37.9


Operating Profit Margin (%) 8.9 16.1 15.6 16.4 Non-Controlling Interests -2 -2 3 2 Net Debt to Equity Ratio (%) 3.0 13.1 3.6 -7.2


Source: Soulbrain, Mirae Asset Daewoo Research estimates


(Maintain)



28

EPS Growth (17F, %)


P/E (17F, x)

Market P/E (17F, x)

KOSDAQ

Market Cap (Wbn)




Beta (12M) OP margin (%) 13.4 18.3 14.5 5.2 5.2 11.1

52-Week Low NP (Wbn) 13 28 16 10 10 23

52-Week High EPS (W) 1,144 2,387 1,269 824 828 1,845

(%) 1M 6M 12M ROE (%) 18.3 27.5 12.0 7.4 7.2 14.4

Absolute 1.1 53.1 38.8 P/E (x) 13.8 9.2 11.6 15.8 22.5 10.1

Relative 6.6 80.5 61.7 P/B (x) 2.3 2.1 1.3 1.1 1.4 1.2


Source: Innox, Mirae Asset Daewoo Research estimates

1.9

1.01

10,850

19,800

10.1

9.6

593.85

229

12

64.8

OP (17F, Wbn) 28


122.8

10.9

Buy

22,500

18,600

Expected Return 21%

70

80

90

100

110

120

130

140

150

160

15.11 16.3 16.7 16.11

Innox KOSDAQ

Innox (088390 KQ)Top pick

A comprehensive materials provider

2017 forecasts: Revenue of W252bn (+10.2% YoY) and OP of W27.6bn (+121.8% YoY)

• Revenue to grow in line with growth of OLED industry

• Full-swing growth fueled by acquisition of a new customer

• Improving earnings at FPCB makers

• Limited capex (utilization of previous property/building investments)

Risk factors

• Potential fall in prices due to fierce market competition

• Delays to revenue from a new semiconductor customer

• Sluggishness of Alton Sports


Innox (088390 KQ)Top pick


(Wbn) 12/14 12/15 12/16F 12/17F (Wbn) 12/14 12/15 12/16F 12/17F 12/14 12/15 12/16F 12/17F





Operating Profit (Adj) 21 11 12 28 Other Current Assets 3 6 8 9 EPS (W) 1,269 824 828 1,845



Net Financial Income 0 -2 -3 -3 Property, Plant and Equipment 102 117 113 128 DPS (W) 0 0 0 0

Net Gain from Inv in Associates 0 0 -1 -1 Intangible Assets 3 44 41 38 Payout ratio (%) 0.0 0.0 0.0 0.0


Income Tax 3 3 2 6 Current Liabilities 41 67 96 96 Revenue Growth (%) -22.0 46.9 7.5 10.0

Profit from Continuing Operations 16 7 9 20 AP & Other Payables 9 12 13 17 EBITDA Growth (%) -27.9 -16.1 7.7 57.1

Profit from Discontinued Operations 0 0 0 0 Short-Term Financial Liabilities 27 47 75 70 Operating Profit Growth (%) -38.2 -47.6 9.1 133.3

Net Profit 16 7 9 20 Other Current Liabilities 5 8 8 9 EPS Growth (%) -46.8 -35.1 0.5 122.8


Non-Controlling Interests 0 -3 -1 -3 Long-Term Financial Liabilities 0 41 30 30 Inventory Turnover (x) 8.2 9.9 7.8 7.4



Non-Controlling Interests 0 -3 -2 -1 Controlling Interests 136 137 146 169 ROE (%) 12.0 7.4 7.2 14.4


FCF (Free Cash Flow) 11 -3 8 -3 Capital Surplus 54 54 54 54 Liability to Equity Ratio (%) 35.2 69.7 77.1 71.1


Operating Profit Margin (%) 14.5 5.2 5.2 11.1 Non-Controlling Interests 0 34 33 30 Net Debt to Equity Ratio (%) -3.9 24.8 12.9 13.2


Source: Innox, Mirae Asset Daewoo Research estimates


(Maintain)



25

EPS Growth (17F, %)


P/E (17F, x)

Market P/E (17F, x)

KOSPI

Market Cap (Wbn)


Free Float (%) Revenue (Wbn) 5,771 3,428 5,474 7,569 5,232 6,186

Foreign Ownership (%) OP (Wbn) 187 -11 71 -60 -904 3

Beta (12M) OP margin (%) 3.2 -0.3 1.3 -0.8 -17.3 0.0

52-Week Low NP (Wbn) 1,472 131 -84 54 262 410

52-Week High EPS (W) 31,192 2,768 -1,426 765 3,727 5,823

(%) 1M 6M 12M ROE (%) 21.8 1.8 -0.9 0.5 2.4 3.7

Absolute -3.0 -21.5 -27.1 P/E (x) 4.8 58.5 - 149.0 24.6 15.8

Relative -1.8 -21.6 -25.7 P/B (x) 0.9 1.0 0.7 0.7 0.6 0.6


Source: Samsung SDI, Mirae Asset Daewoo Research estimates

33.9

0.68

87,400

129,000

15.8

9.6

1,983.75

6,313

70

77.5

OP (17F, Wbn) 3


56.3

10.9

Trading Buy

107,000

91,800

Expected Return 17%

70

80

90

100

110

120

130

15.11 16.3 16.7 16.11

Samsung SDI KOSPI

Stock towatch Samsung SDI (006400 KS)

Still looking for the light at the end of a tunnel

2017 forecasts: Revenue of W6.2tr (+18.2% YoY) and OP of W3.2bn (turn to black YoY)

• The battery business (both small- and large-sized) is bottoming; The company’s struggles have already been priced in.

• The current share price is lower than the company’s asset value Valuation is attractive.

• We will likely see great upward momentum once fundamentals begin to recover.

• Samsung SDI is a proxy investment for Samsung Display.

Risk factors

• The EV battery business remains in a slump due to delays to China’s announcement of its fifth certification list.

• The renewable energy industry could be hit by the Trump administration’s support of conventional energy.

• Investor confidence in the small-sized battery business is likely to recover at a slower-than-expected pace.


Samsung SDI (006400 KS)Stock towatch


(Wbn) 12/14 12/15 12/16F 12/17F (Wbn) 12/14 12/15 12/16F 12/17F 12/14 12/15 12/16F 12/17F

Revenue 5,474 7,569 5,232 6,186 Current Assets 3,536 4,774 5,453 5,822 P/E (x) - 149.0 24.6 15.8

Cost of Sales 4,545 6,186 4,289 4,911 Cash and Cash Equivalents 628 1,288 2,487 1,976 P/CF (x) 19.0 22.5 26.9 10.0

Gross Profit 929 1,383 943 1,275 AR & Other Receivables 893 1,055 756 981 P/B (x) 0.7 0.7 0.6 0.6

SG&A Expenses 858 1,443 1,847 1,272 Inventories 769 750 537 697 EV/EBITDA (x) 13.9 13.4 - 7.6

Operating Profit (Adj) 71 -60 -904 3 Other Current Assets 1,246 1,681 1,673 2,168 EPS (W) -1,426 765 3,727 5,823

Operating Profit 71 -60 -904 3 Non-Current Assets 12,433 11,451 9,908 10,477 CFPS (W) 6,118 5,063 3,410 9,191

Non-Operating Profit 128 99 57 566 Investments in Associates 4,979 5,173 5,190 5,190 BPS (W) 164,775 156,614 155,958 160,782

Net Financial Income -16 -14 3 12 Property, Plant and Equipment 3,325 3,229 2,522 2,881 DPS (W) 1,000 1,000 1,000 1,000

Net Gain from Inv in Associates 190 280 212 539 Intangible Assets 1,279 1,278 909 841 Payout ratio (%) -85.6 267.6 26.9 16.3

Pretax Profit 199 39 -847 569 Total Assets 15,969 16,225 15,361 16,299 Dividend Yield (%) 0.9 0.9 1.1 1.1

Income Tax 47 13 -13 146 Current Liabilities 2,254 3,201 2,358 2,641 Revenue Growth (%) 59.7 38.3 -30.9 18.2

Profit from Continuing Operations 152 26 -834 423 AP & Other Payables 565 595 509 661 EBITDA Growth (%) 44.2 0.0 - -

Profit from Discontinued Operations -232 0 1,090 0 Short-Term Financial Liabilities 975 1,047 731 531 Operating Profit Growth (%) - - - -

Net Profit -80 26 255 423 Other Current Liabilities 714 1,559 1,118 1,449 EPS Growth (%) - - 387.2 56.2

Controlling Interests -84 54 262 410 Non-Current Liabilities 1,887 1,771 1,807 2,110 Accounts Receivable Turnover (x) 7.6 8.6 6.6 8.2

Non-Controlling Interests 4 -28 -7 13 Long-Term Financial Liabilities 803 702 623 623 Inventory Turnover (x) 8.5 10.0 8.1 10.0

Total Comprehensive Profit 244 -530 0 423 Other Non-Current Liabilities 1,084 1,069 1,184 1,487 Accounts Payable Turnover (x) 13.3 16.2 13.2 15.8

Controlling Interests 237 -503 25 426 Total Liabilities 4,142 4,972 4,165 4,751 ROA (%) -0.6 0.2 1.6 2.7

Non-Controlling Interests 6 -27 -25 -3 Controlling Interests 11,587 11,012 10,944 11,283 ROE (%) -0.9 0.5 2.4 3.7

EBITDA 604 604 -412 612 Capital Stock 357 357 357 357 ROIC (%) 1.4 -0.7 -18.6 0.1

FCF (Free Cash Flow) -166 155 -2,408 -216 Capital Surplus 5,033 5,031 5,031 5,031 Liability to Equity Ratio (%) 35.0 44.2 37.2 41.1

EBITDA Margin (%) 11.0 8.0 -7.9 9.9 Retained Earnings 4,862 4,853 5,034 5,373 Current Ratio (%) 156.8 149.1 231.2 220.5

Operating Profit Margin (%) 1.3 -0.8 -17.3 0.0 Non-Controlling Interests 240 241 252 265 Net Debt to Equity Ratio (%) 0.6 -1.2 -18.1 -17.2

Net Profit Margin (%) -1.5 0.7 5.0 6.6 Stockholders' Equity 11,827 11,253 11,196 11,548 Interest Coverage Ratio (x) 1.7 -1.1 -21.2 0.1

Source: Samsung SDI, Mirae Asset Daewoo Research estimates


(Maintain)



41

EPS Growth (17F, %)


P/E (17F, x)

Market P/E (17F, x)

KOSPI

Market Cap (Wbn)



Foreign Ownership (%) OP (Wbn) -7 -15 -29 -31 29 42

Beta (12M) OP margin (%) -1.8 -4.3 -7.0 -6.8 7.4 10.0

52-Week Low NP (Wbn) -57 -7 3 -38 33 30

52-Week High EPS (W) -1,459 -187 86 -978 853 766

(%) 1M 6M 12M ROE (%) -19.1 -2.7 1.2 -15.2 13.4 10.7

Absolute -27.2 -32.4 28.0 P/E (x) - - 82.9 - 14.0 15.5

Relative -26.3 -32.4 30.5 P/B (x) 1.3 1.6 1.0 2.0 1.8 1.6


Source: Iljin Materials, Mirae Asset Daewoo Research estimates

2.2

0.30

9,300

19,650

15.5

9.6

1,983.75

466

39

36.6

OP (17F, Wbn) 42


-10.1

10.9

Buy

18,400

11,900

Expected Return 55%

70

80

90

100

110

120

130

140

150

160

15.11 16.3 16.7 16.11

Iljin Materials KOSPI

Stock towatch Iljin Materials (020150 KS)

In need of additional growth momentum

2017 forecasts: Revenue of W417.8bn (+6.0% YoY) and OP of W42.5bn (+45.5% YoY)

• The ICS business should continue benefiting from the suspension of production lines at major suppliers.

• The I2B business is expected to enjoy improved stability thanks to its diversified customer base (mainly Chinese customers).

• Iljin Materials is anticipated to maintain a technological edge over rivals in the I2B market.

• Customer base expansion and investments in new production lines should provide additional momentum to the company.

Risk factors

• The renewable energy industry could be hit by the Trump administration’s support of conventional energy.

• Uncertainties over China’s subsidy guidelines and fifth certification list

• Delayed investments in new production lines


Iljin Materials (020150 KS)Stock towatch


(Wbn) 12/14 12/15 12/16F 12/17F (Wbn) 12/14 12/15 12/16F 12/17F 12/14 12/15 12/16F 12/17F

Revenue 415 458 392 418 Current Assets 220 199 188 210 P/E (x) 82.9 - 14.0 15.5




Operating Profit (Adj) -29 -31 29 42 Other Current Assets 27 24 20 23 EPS (W) 86 -978 853 766

Operating Profit -29 -31 29 42 Non-Current Assets 376 237 186 250 CFPS (W) 1,590 531 1,255 1,530

Non-Operating Profit 43 -17 -6 -3 Investments in Associates 0 0 0 0 BPS (W) 6,921 5,945 6,769 7,535

Net Financial Income -4 -3 0 0 Property, Plant and Equipment 267 179 138 197 DPS (W) 0 0 0 0

Net Gain from Inv in Associates 0 0 0 0 Intangible Assets 26 7 6 5 Payout ratio (%) 0.0 0.0 0.0 0.0

Pretax Profit 14 -48 23 39 Total Assets 596 437 374 460 Dividend Yield (%) 0.0 0.0 0.0 0.0

Income Tax 15 15 10 8 Current Liabilities 265 166 83 136 Revenue Growth (%) 18.6 10.4 -14.4 6.6

Profit from Continuing Operations -2 -63 13 31 AP & Other Payables 59 59 44 53 EBITDA Growth (%) -60.0 16.7 628.6 25.5

Profit from Discontinued Operations 0 0 21 0 Short-Term Financial Liabilities 184 79 18 58 Operating Profit Growth (%) - - - 44.8

Net Profit -2 -63 34 31 Other Current Liabilities 22 28 21 25 EPS Growth (%) - - - -10.2

Controlling Interests 3 -38 33 30 Non-Current Liabilities 39 38 20 24 Accounts Receivable Turnover (x) 5.8 5.9 6.0 6.8

Non-Controlling Interests -5 -25 1 1 Long-Term Financial Liabilities 15 15 3 3 Inventory Turnover (x) 4.9 5.8 6.3 7.1

Total Comprehensive Profit -4 -60 33 31 Other Non-Current Liabilities 24 23 17 21 Accounts Payable Turnover (x) 10.7 12.8 10.3 11.3

Controlling Interests 2 -35 36 40 Total Liabilities 303 204 104 159 ROA (%) -0.3 -12.3 8.4 7.3

Non-Controlling Interests -5 -24 -3 -10 Controlling Interests 272 233 265 295 ROE (%) 1.2 -15.2 13.4 10.7

EBITDA 6 7 51 64 Capital Stock 20 20 20 20 ROIC (%) 1.1 -11.7 6.6 13.6

FCF (Free Cash Flow) -78 22 44 -36 Capital Surplus 193 190 190 190 Liability to Equity Ratio (%) 103.7 87.6 38.4 53.0


Operating Profit Margin (%) -7.0 -6.8 7.4 10.0 Non-Controlling Interests 21 0 5 6 Net Debt to Equity Ratio (%) 58.7 27.2 -14.8 0.7

Net Profit Margin (%) 0.7 -8.3 8.4 7.2 Stockholders' Equity 293 233 270 301 Interest Coverage Ratio (x) -5.2 -10.5 68.1 35.6

Source: Iljin Materials, Mirae Asset Daewoo Research estimates


APPENDIX 1


APPENDIX 1


APPENDIX 1


APPENDIX 1

Documents

Display/Electronic Materials