(36 KS) Rising prospects for business expansion Holding Companies News Comment (Maintain) Buy Target Price (12M, W) 27, Share Price (9/9/13, W) 191,5 Expected Return 41% OP (13F, Wbn) 5,179 Consensus OP (13F, Wbn) 4,953 EPS Growth (13F, %) 2. Market EPS Growth (13F, %) 23.1 P/E (13F, x) 7.2 Market P/E (13F, x) 9.9 KOSPI 1,974.67 Market Cap (Wbn) 8,993 Shares Outstanding (mn) 47 Free Float (%) 54.3 Foreign Ownership (%) 3.2 Beta (12M).79 52-Week Low (W) 141, 52-Week High (W) 191,5 (%) 1M 6M 12M Absolute 11. 11.3 13.7 Relative 6. 12.9 11.3 12 11 1 9 8 7 Share price KOSPI 8/12 12/12 4/13 8/13 Daewoo Securities Co., Ltd. Holding Companies/IT Services Dae-ro Jeong +822-768-416 daero.jeong@dwsec.com SK E&S inks US shale gas liquefaction deal On September 9 th, subsidiary, SK E&S, struck a liquefaction tolling agreement with Freeport LNG Expansion (a subsidiary of Freeport LNG Development) to process 2.2mn tonnes of liquefied natural gas (LNG) annually over a twenty year period beginning 219. Access to local liquefaction facilities is essential to bring the cheap, abundant shale gas resources in North America to the domestic market. SK E&S plans to use the liquefaction plant that Freeport LNG is set to build in Texas to process the region s shale gas into LNG and transport it to the domestic market. Following the liquefaction deal, SK E&S is also looking to acquire shale gas assets in the region by the end of the year. Given that natural gas prices in North America are currently around US$3-4/MMBtu, we believe gas sourced from the region would be 3% cheaper than domestic gas, even after considering additional costs from liquefaction and transportation. Although the actual use of US shale gas is still years away, we believe the deal leaves SK E&S better positioned in terms of long-term energy procurement and raises the prospect of the company expanding its LNG business scope. 2H catalysts: 1) SK E&S earnings growth, 2) Potential business expansion SK E&S earnings growth: We expect SK E&S to allot a sizeable portion of the natural gas it directly sources from the Tangguh field (annual contract of 6, tonnes) to its Gwangyang plant in 2H. This should help the firm maintain high utilization on the back of cost advantages, and hence deliver solid earnings in 2H. The Oseong plant, which was hurt by a one-month suspension for inspection in June following a ground fault in the steam turbine (29MW), resumed normal operations on September 4th and should thus contribute to earnings from 3Q. Also, SK E&S purchased in late August an additional stake in Kimcheon Energy (to 8% from 5%), assuming managerial control and turning it into its consolidated subsidiary. This should allow SK E&S to expand its business in the high-efficiency, high-margin cogeneration power segment and accelerate the firm s earnings. We are also upbeat on SK E&S s potential business expansion. In addition to its city gas and power plant businesses, the company has a number of other projects in the pipeline, including the construction of an LNG terminal in Boryeong and the acquisition of gas fields in Australia. As these projects proceed, we believe the operating value of SK E&S (which has achieved vertical integration for LNG across exploration, development, production, trading, storage, and distribution) will come into renewed focus, especially if the pending direct natural-gas purchasing legislation passes into law. Maintain Buy and Raise TP by 15% to W27, We maintain Buy on and raise our target price by 15% to W27, (from W235,) to reflect the rising value of the firm s subsidiaries. In particular, we revised up our valuation multiple of SK E&S to 8x (from 7x) in light of growing prospects of the firm s business expansion. We expect to see continued appreciation in SK E&S s value in 2H, which can only be tapped into via (owns 94.1% of SK E&S; SK C&C holds the balance). FY (Dec.) 12/1 12/11 12/12 12/13F 12/14F 12/15F Revenue (Wbn) 9,533 11,574 119,678 117,487 123,295 127,743 OP (Wbn) 5,647 6,421 4,597 5,179 6,195 6,965 OP margin (%) 6.2 5.8 3.8 4.4 5. 5.5 NP (Wbn) 925 1,673 1,49 1,258 1,38 1,56 EPS (W) 19,484 35,244 22,95 26,56 29,59 32,85 ROE (%) 11.5 17. 9.5 1.7 1.8 11.3 P/E (x) 7.2 3.4 8.1 7.2 6.6 5.8 P/B (x) 3.4 2.3 2.6 2.1 1.6 1.3 Note: All figures are based on consolidated K-IFRS; NP refers to net profit attributable to controlling interests Source: Company data, estimates 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.
Table 1. SK E&S s LNG-related projects Type Activities Details Jan. 26 ~ Tangguh field in Indonesia 5, - 6, tonnes per year (Jan. 26 - Dec. 225) Direct LNG sourcing Underway Signed agreement on direct LNG sourcing with the Kalimantan gas field development consortium To Import 1.5mn tonnes annually starting 216 Share acquisition Jun. 212~ Acquired 37.5% stake in the Barossa-Caldita gas field in Australia (June 7 th, 212) Paid US$31mn for 37.5% stake; The gas filed is jointly owned by SK E&S (37.5%), ConocoPhillips (37.5%), and Santos (25%); If natural gas is confirmed to be abundant in the field, SK E&S can exercise an option to acquire an additional 12% stake Current Acquired 16% stake in China Gas Holdings Aimed at investing in the Chinese natural gas market Storage facilities May 213~ Boryeong LNG terminal project Established 5-5 JV with GS Energy ; Annual LNG storage capacity of 3mn tonnes; SK E&S to use 2mn tonne capacity and GS Energy to use the remaining 1mn tonne capacity Liquefaction deal Sep. 213 SK E&S struck a liquefaction tolling agreement with Freeport LNG Expansion SK E&S plans to use the liquefaction plant that Freeport LNG is set to build in Texas to process the region s shale gas into LNG and transport it to the domestic market (2.2mn tonnes annually for 2 years from 219 ) Source: Company data, estimates Figure 1. SK E&S s LNG power generation capacity expansion plans (MW) 7, 6, 5, 4, Samcheonpo Yeoju Munsan Jangheung Pyeongtaek Gwangyang 6,657 2, 3.5x increase in power generation capacity 1, 3,77 95 95 95 3, 2, 1, 9 9 9 9 1,97 9 9 9 9 1,74 833 833 833 833 833 1,74 1,74 1,74 1,74 1,74 1,74 ~212 9/9/213 216~ June 217~ Oct. 218 Apr. 219 Figure 2. SK E&S s LNG requirements and direct LNG sourcing (' tonnes) 5, 4, Annual LNG demand (estimated) Annual direct LNG souring (planning) 4,3 3, 2, 2,1 2,1 2,1 1, 6 6 6 12 13 15F 16F 17F 18F 19F Source: Company data, 2
Figure 3. Fuel and system marginal price (SMP) trends (Petroleum: W'/ kl ; LNG: W'/tonne) 1,5 Petroleum 유류 LNG 1, 5 Figure 4. Reserve power supply: IPP capacity utilization (MW) Supply capacity (L) (%) 1, Maximum power consumption (L) 25 Reserve margin (R) 8, 2 2 3 4 5 6 7 8 9 1 11 12 13 (W/kWh) 2 SMP 15 6, 4, 15 1 1 2, 5 5 2 3 4 5 6 7 8 9 1 11 12 13 1/1 7/1 1/11 7/11 1/12 7/12 1/13 7/13 Source: Korea Power Exchange, Source: Korea Power Exchange, Table 2. Earnings breakdown for SK E&S (Wbn, %, %p) 212 213F 3Q13 growth 1Q 2Q 3Q 4Q Annual 1Q 2Q 3QF 4QF Annual QoQ YoY Revenue 2,29 1,14 989 1,653 5,776 2,21 1,427 1,262 2,1 6,711-11.6 27.6 Power generation 351 291 299 243 1,183 279 58 546 538 1,871 7.5 82.8 Gwangyang (1,74MW) 351 291 299 243 1,183 249 288 348 318 1,22 21 16.5 Capacity (GWh) 2,266 2,329 2,33 2,316 9,214 2,266 2,291 2,33 2,316 9,176.5 Generation (GWh) 1,991 1,562 1,585 1,289 6,427 1,45 1,697 2,27 1,76 6,934 19.4 27.9 Utilization (%) 87.9 67.1 68.8 55.7 69.8 64 74.1 88 76 75.6 13.9 19.2 Oseong (833MW) - - - - - 3 22 198 22 669-1.2 - Capacity (GWh) - - - - - 2 1,819 1,819 1,819 5,658 - Generation (GWh) - - - - - 18 1,296 1,273 1,31 4,59-1.7 - Utilization (%) - - - - - 9 71.2 7 72 71.8-1.2 7 City gas 1,69 829 71 1,435 4,664 1,755 959 737 1,49 4,94-23.2 3.8 Consolidation adjustments -12-16 -19-24 -71-13 -4-21 -26-99 RR RR Operating profit 291 192 143 134 76 199 135 217 221 772 6.8 51.6 Power generation 215 164 135 111 625 133 14 26 19 634 97.3 52.2 Gwangyang 215 164 135 111 625 132 76 18 16 549 135.7 32.7 Oseong 1 28 26 3 85-6.4 - City gas 72 3 12 33 147 66 33 13 33 145-59.6 9.5 Consolidation adjustments 4-2 -4-1 -12-2 -2-2 -7 RR OP margin 14.3 17.4 14.5 8.1 13.2 9.8 9.5 17.2 11 11.5 7.7 2.7 Net profit 224 16 122 14 61 159 135 185 17 649 37.4 51.6 Note: Oseong complex started commercial operations on March 22, 213; RR stands for remain in red. Source: Company data, Table 3. Quarterly and annual earnings (Wbn, %, %p) 212 213F 3Q13 growth 1Q 2Q 3Q 4Q Annual 1Q 2Q 3QF 4QF Annual QoQ YoY Revenue 3,847 3,472 29,761 28,598 119,678 29,579 28,174 29,212 3,522 117,487 3.7-1.8 Cost of sales 27,951 28,228 27,6 26,527 19,766 27,373 25,711 26,54 27,47 17,94 3.2-1.9 Gross profit 2,896 2,244 2,7 2,71 9,911 2,26 2,463 2,672 3,52 1,393 8.5-1 SG&A expenses 1,297 1,556 1,33 1,131 5,314 1,14 1,322 1,236 1,517 5,214-6.5-7.1 Operating profit 1,598 688 1,37 94 4,597 1,66 1,141 1,437 1,535 5,179 26 4.9 Other non-operating income 87-22 19 146 23-227 34-65 44-214 TTR TTR Equity-method income 22 2-8 66 82 92 248 237 225 82-4.6 TTB Financial income -65-3 -45-64 -88-411 -378-29 -139-1,137 RR RR Pre-tax profit 1,643 368 931 1,88 4,29 521 1,45 1,399 1,665 4,63 33.9 5.3 Net profit 1,175 29 713 713 2,631 354 816 1,47 1,12 3,319 28.4 46.7 Net profit (controlling interest) 46 78 25 261 1,49 199 36 367 386 1,258 2 46.7 Note: RR stands for remain in red, TTR stands for turn to red, TTB stands for turn to black. estimates 3
Table 4. Major subsidiaries earnings (Wbn, %, %p) 212 213F 3Q13 growth 1Q 2Q 3Q 4Q Annual 1Q 2Q 3QF 4QF Annual QoQ YoY SK Innovation Revenue 18,834 18,878 18,458 17,16 73,33 18,18 16,853 17,474 17,681 7,115 3.7-5.3 (33.4%) Operating profit 927-13 649 227 1,699 696 395 569 6 2,26 44.1-12.3 OP margin 4.9 -.5 3.5 1.3 2.3 3.8 2.3 3.3 3.4 3.2.9 -.3 SK Telecom Revenue 3,97 4,8 4,74 4,18 16,232 4,17 4,164 4,319 4,43 17,2 3.7 6 (25.2%) Operating profit 452 385 31 623 1,76 411 553 572 593 2,129 3.4 9.4 OP margin 11.4 9.6 7.4 14.9 1.8 1 13.3 13.3 13.4 12.5 5.9 SK Networks Revenue 6,637 7,147 7,273 6,879 27,936 6,427 6,313 7,31 7,142 26,913 11.4-3.3 (39.1%) Operating profit 5 15 47 5 252 24 61 62 84 232 2.8 32.4 OP margin.7 1.5.6.7.9.4 1.9 1.2.9 -.1.2 SKC Revenue 598 677 667 687 2,629 56 632 696 725 2,613 1.1 4.3 (42.5%) Operating profit 25 47 42 31 145 24 31 49 55 159 6.2 17.1 OP margin 4.3 6.9 6.3 4.5 5.5 4.2 4.9 7.1 7.6 6.1 2.2.8 SK E&C Revenue 1,788 1,94 1,896 1,949 7,537 1,521 1,93 1,842 2,7 7,3-9.4-7.6 (4.%) Operating profit 27 5 3 22 11-244 -18-45 -22-329 RR RR OP margin 1.5 2.6.2 1.1 1.3-16 -.9-2.4-1.1-4.5-1.6-2.6 SK Shipping Revenue 686 645 563 621 2,515 647 687 591 652 2,577-14 5 (83.1%) Operating profit 1 7-13 -3 1-2 16 4 5 4 TTB -13 OP margin 1.5 1.1-2.4 -.5-3.1 2.3.7.8.2-1.6 3 Note: Figures in parentheses indicate ownership Source: FnGuide, estimates Figure 4. Correlation of and SK Innovation (1/1/12=1) 18 SK Innovation Correlation between and SK Innovation shares 16.89.59.32 14 12 Valuation of SK E&S attracts attention Correlation between and SK Innovation shares widens 1 8 1/12 4/12 7/12 1/12 1/13 4/13 7/13 1/13 Source: Bloomberg, 4
Table 5. Valuation of Valuation 1. Operating value 1,311 Notes In-house business - - Pure holding company Royalty income 1,311 - Perpetual growth rate g=2%, WACC=11% Real estate 2. Value of investment assets 16,65 Listed subsidiaries 1,17 Unlisted subsidiaries 5,958 3. Total asset value (1+2) 17,377 4. Net borrowings (-) 2,614 - As of end-june 213 Treasury stock market cap (+) 1,242 5. NAV (3+4) 16,5 Market cap 8,993 Discount to NAV 43.8 6. Number of outstanding shares ( shares) 4,987 7. NAV per share 39,483 - Number of shares outstanding (Including preferred shares) 8. Theoretical target price 273,338 - Application of 3% discount to NAV Target price 27, - Previous TP: 235, Current share price 191,5 - Based on September 9, 213 closing price Upside potential 41 (Wbn,W,%) Table 6. Value of investment securities (Wbn) Ownership Book value Current price (W) Valuation Notes Listed subsidiaries 1,17 - Based on September 9, 213 closing price SK Innovation 33.4% 148,5 4,586 SK Telecom 25.2% 216,5 4,49 SK Networks 39.1% 6,6 641 SKC 42.5% 3,6 471 Unlisted subsidiaries 5,958 SK E&C 4.% 485 98 - Based on OTC price SK E&S 94.1% 1,26 4,922 - Based on P/E of 6x (213F net profit) SK Shipping 1.% 68 68 SK Biopharm 1.% 229 229 Other 12 12 Figure 5. NAV breakdown Figure 6. Discount rate to NAV Other investment securities, 12.4% Royalty income, 7.5% SK Innovation, 26.4% (%) 7 6 5 Highest discount: 57% 4 3 Lowest discount: 35% 2 SK E&S, 28.3% SK Telecom, 25.4% 1 8 9 1 11 12 13 5
(36 KS /Buy/TP: W27,) Comprehensive Income Statement (Summarized) Statement of Financial Condition (Summarized) (Wbn) 12/12 12/13F 12/14F 12/15F (Wbn) 12/12 12/13F 12/14F 12/15F Revenue 119,678 117,487 123,295 127,743 Current Assets 35,546 39,983 46,233 52,576 Cost of Sales 19,766 17,94 111,638 115,118 Cash and Cash Equivalents 7,146 12,56 17,52 22,437 Gross Profit 9,911 1,393 11,657 12,625 AR & Other Receivables 14,897 14,624 15,347 15,91 SG&A Expenses 5,314 5,214 5,462 5,661 Inventories 9,168 9, 9,445 9,786 Operating Profit (Adj) 4,597 5,179 6,195 6,965 Other Current Assets 1,781 1,749 1,834 1,899 Operating Profit 4,597 5,179 6,195 6,965 Non-Current Assets 55,99 53,729 52,562 51,583 Non-Operating Profit -568-549 -51-585 Investments in Associates 7,592 8,395 9,119 9,881 Net Financial Income 993 1,137 1,33 1,124 Property, Plant and Equipment 33,2 31,292 29,554 27,97 Net Gain from Inv in Associates 1 82 724 762 Intangible Assets 8,523 8,221 7,966 7,75 Pretax Profit 4,29 4,63 5,684 6,379 Total Assets 9,645 93,712 98,795 14,159 Income Tax 1,241 1,311 1,749 1,93 Current Liabilities 31,331 3,952 31,957 32,726 Profit from Continuing Operations 2,788 3,319 3,936 4,449 AP & Other Payables 13,76 13,455 14,12 14,63 Profit from Discontinued Operations -158 Short-Term Financial Liabilities 1,617 1,617 1,617 1,617 Net Profit 2,631 3,319 3,936 4,449 Other Current Liabilities 7,8 6,88 7,219 7,479 Controlling Interests 1,49 1,258 1,38 1,56 Non-Current Liabilities 23,899 24,93 25,921 26,943 Non-Controlling Interests 1,582 2,61 2,556 2,89 Long-Term Financial Liabilities 18,88 18,88 18,88 18,88 Total Comprehensive Profit 1,856 2,544 3,161 3,675 Other Non-Current Liabilities 5,57 6,511 7,53 8,552 Controlling Interests 782 991 1,112 1,292 Total Liabilities 55,23 55,855 57,878 59,669 Non-Controlling Interests 1,74 1,553 2,49 2,382 Controlling Interests 11,352 12,24 13,252 14,443 EBITDA 8,295 7,794 8,594 9,171 Capital Stock 239 239 239 239 FCF (Free Cash Flow) -218 5,994 5,974 6,433 Capital Surplus 6,27 6,27 6,27 6,27 EBITDA Margin (%) 6.9 6.6 7. 7.2 Retained Earnings 5,96 7,62 8,34 9,799 Operating Profit Margin (%) 3.8 4.4 5. 5.5 Non-Controlling Interests 24,64 25,617 27,665 3,47 Net Profit Margin (%).9 1.1 1.1 1.2 Stockholders' Equity 35,416 37,857 4,917 44,49 Cash Flows (Summarized) Forecasts/Valuations (Summarized) (Wbn) 12/12 12/13F 12/14F 12/15F 12/12 12/13F 12/14F 12/15F Cash Flows from Op Activities 6,269 6,555 6,537 7,16 P/E (x) 8.1 7.2 6.6 5.8 Net Profit 2,631 3,319 3,936 4,449 P/CF (x) 1.8 2.4 2.4 2.4 Non-Cash Income and Expense 6,272 4,476 4,658 4,722 P/B (x) 2.6 2.1 1.6 1.3 Depreciation 2,943 1,98 1,738 1,584 EV/EBITDA (x) 6.7 6.7 5.8 5.1 Amortization 755 78 661 622 EPS (W) 22,95 26,56 29,59 32,85 Others -648-215 -21-223 CFPS (W) 99,997 81,599 79,67 79,321 Chg in Working Capital -1,37 72-39 -225 BPS (W) 68,39 93,468 12,143 149,78 Chg in AR & Other Receivables -6 273-723 -554 DPS (W) 2,5 2,5 2,5 2,5 Chg in Inventories 389 168-445 -341 Payout ratio (%) 9.8 8. 7.3 6.5 Chg in AP & Other Payables -864-251 665 59 Dividend Yield (%) 1.4 1.3 1.3 1.3 Income Tax Paid -1,263-1,311-1,749-1,93 Revenue Growth (%) 8.2-1.8 4.9 3.6 Cash Flows from Inv Activities -9,11 2,543 2,81 2,862 EBITDA Growth (%) -16.4-6. 1.3 6.7 Chg in PP&E -5,838 Operating Profit Growth (%) -28.4 12.7 19.6 12.4 Chg in Intangible Assets -46-46 -46-46 EPS Growth (%) -37.3 2. 9.6 13.1 Chg in Financial Assets 1 Accounts Receivable Turnover (x) 9.6 9.4 9.7 9.7 Others -2,769 2,949 3,216 3,268 Inventory Turnover (x) 12.7 12.9 13.4 13.3 Cash Flows from Fin Activities 551-4,189-4,351-4,493 Accounts Payable Turnover (x) 1.7 11. 11.4 11.3 Chg in Financial Liabilities 1,44 ROA (%) 2.9 3.6 4.1 4.4 Chg in Equity ROE (%) 9.5 1.7 1.8 11.3 Dividends Paid -77-13 -11-11 ROIC (%) 7.5 7.9 9.6 11.3 Others -812-4,86-4,249-4,392 Liability to Equity Ratio (%) 156. 147.5 141.5 134.1 Increase (Decrease) in Cash -2,226 4,91 4,997 5,384 Current Ratio (%) 113.5 129.2 144.7 16.7 Beginning Balance 9,372 7,146 12,56 17,52 Net Debt to Equity Ratio (%) 53.7 37.2 22.2 8.4 Ending Balance 7,146 12,56 17,52 22,437 Interest Coverage Ratio (x) 3.4 1.3 1.5 1.6 Source: Company data, estimates 6
APPENDIX 1 Important Disclosures & Disclaimers Disclosures As of the publication date, Daewoo Securities Co., Ltd. issued equity-linked warrants with as an underlying asset, and other than this, Daewoo Securities has no other special interests in the covered companies. Of the equity-linked warrants covered in this report, Daewoo Securities Co., Ltd. has acted as a liquidity provider for equity-linked warrants backed by shares of as underlying assets. (W) 3, 25, 2, 15, 1, 5, Stock Ratings Industry Ratings Buy Relative performance of 2% or greater Overweight Fundamentals are favorable or improving Trading Buy Relative performance of 1% or greater, but with volatility Neutral Fundamentals are steady without any material changes Hold Relative performance of -1% and 1% Underweight Fundamentals are unfavorable or worsening Sell Relative performance of -1% * 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 Daewoo Securities, 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. 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. Daewoo Securities Co., Ltd. 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 Daewoo Securities, the Analysts receive compensation that is impacted 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 Daewoo Securities Co., Ltd. except as otherwise stated herein. Disclaimers This report is published by Daewoo Securities Co., Ltd. ( 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 from sources believed to be reliable and in good faith, but such information has not been independently verified and 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. If this report is 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. Daewoo, its affiliates and their directors, officers, employees and agents do not accept any liability for any loss arising from the use hereof. 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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. 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. The price and value of the investments referred to in this report and the income from them may go down as well as up, and investors may realize losses on any investments. Past performance is not a guide to future performance. Future returns are not guaranteed, and a loss of original capital may occur. 9/11 3/12 9/12 3/13 9/13 7
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