Investor Presentation Q2 FY2006 1
DISCLAIMER This presentation contain forward-looking statements about Mirae Asset Securities and unaudited preliminary figures internally collected as of September 2006. These figures are subject to change without prior notice, and Mirae Asset Securities is neither obligated to provide revisions, nor responsible for any loss or inconvenience caused by changes regarding the projection and forecast presented in this document.
CONTENTS Market Environment Financial Highlights Performance Review - Asset Management - Brokerage - Investment Banking - Appendix
Market Environment
Equity Market The KOSPI and KOSDAQ market modestly recovered in FY06 Q2 along with stabilizing daily average trading value since its dramatic fall at FY 2005 end Daily Average Trading Value KOSPI / KOSDAQ Index (KrW billion) (KrW billon) 8,000 7,000 6,000 5,000 4,000 3,000 2,000 2,621 2,874 2,356 4,285 5,215 7,694 5,279 4,135 1,600 1,400 1,200 1,000 800 600 505 764 KOSPI (LHS) KOSDAQ (RHS) 1,007 899 499 817 431 366 1,368 1,357 679 1,106 600 512 800 700 600 500 400 1,000 Source: KRX 2003.09 2004.06 2005.03 2005.12 2006.09 400 300 2003.09 2004.06 2005.03 2005.12 2006.09 Source: KRX 5
Indirect Investment Market The market s total fund balance stands at KrW 225 trillion rising 0.9% since the end of FY2005. MAS total fund balance rose 10.9% to KrW 8.7 trillion and equity-type fund balance rose 22.7% to KrW 4.7 trillion for the same period Market Total Fund Market Total Equity Fund (KrW trillion) (KrW trillion) 240 225 50 44 220 200 180 160 162 193 204 40 30 20 26 140 120 10 8 11 100 2004.06 2005.03 2005.12 2006.09 Source: AMAK (Asset Management Association of Korea) 0 2004.06 2005.03 2005.12 2006.09 Source: AMAK 6
Financial Highlights
Financial Highlights Due to strong IB new issue underwriting biz, MAS achieved KrW 256 billion in operating income and KrW 50 billion in net income for FY2006 1H Operating Income Net Income [KrW million] [KrW million] CAGR ( 00 ~ 05) CAGR ( 00 ~ 05) 33.3% 40.4% 432,133 91,517 102,517 223,861 264,014 293,905 272,842 255,518 16,774 13,670 17,409 43,662 31,261 49,743 FY2000 FY2001 FY2002 FY2003 FY2004 FY2005 FY06, 1H FY2000 FY2001 FY2002 FY2003 FY2004 FY2005 FY06, 1H Source: Company data Source: Company data 8
Financial Highlights [KrW million] Items Q2 FY06 Q1 FY06 QoQ Q2 FY05 YoY Operating Income 122,781 132,737-7.5% 109,138 12.5% Operating Expenses 85,816 100,636-14.7% 71,053 20.8% A. Other Operating Expenses 44,301 59,736-25.8% 37,195 19.1% B. G&A Expenses 41,515 40,900 1.5% 33,858 22.6% Net Revenue (Operating Inc - Operating Exp + G&A) 78,480 73,000 7.5% 71,943 9.1% Operating Profit 36,965 32,101 15.2% 38,085-2.9% Non-operating Profit 169 344-50.9% 2,282-92.6% Non-operating Expense 509 15 NA 12,153-95.8% Ordinary Profit 36,625 32,430 12.9% 28,214 29.8% Net Income 26,400 23,343 13.1% 20,038 31.7% Q2 FY06 Q1 FY06 FY05 Amount Portion Amount Portion Amount Portion G & A 41,515 100% 40,900 100% 148,381 100% Others 5,197 12.5% 5,666 13.8% 20,822 14.1% Depreciation 1,438 3.5% 1,416 3.5% 5,173 3.5% Rental Expenses 1,254 3.0% 1,302 3.2% 3,902 2.6% IT Cost 1,726 4.2% 1,650 4.0% 6,129 4.1% Misc. Commissions 1,750 4.2% 1,656 4.0% 6,350 4.3% Advertising Expenses 6,783 16.3% 5,792 14.2% 14,450 9.7% Salary & Compensation 23,367 56.3% 23,418 57.3% 91,557 61.7% Source: Company data 9
Net Revenue Breakdown MAS continuously maintains advanced and balanced revenue structure with comparatively high revenue proportion from asset management and a solid track record from investment banking Asset Management - Beneficiary certificates - Wrap account - Bancassurance 23% 30% 28% Brokerage Investment Banking - Underwriting & IPO - Prop. trading - Fixed income securities - Principal Investment 39% 22% 32% 25% 26% 31% Interest Profit & Other 16% 13% 15% FY2005 FY2006 Target FY2006 Q2 Source: Company data (Net Revenue = Operating Income Operating Expenses + G&A expenses) 10
Performance Review
Asset Management Mirae Asset Group Mirae Asset Group continues to lead the indirect investment market with M/S of 9.0% (32.7% M/S for equity-type fund) Total Fund Market vs. MAG Total Equity Fund Market vs. MAG [KrW billion] [KrW billion] 230,000 220,000 210,000 200,000 190,000 180,000 - Total Market (LHS) 20,162 MAG (RHS) 18,927 17,288 12,133 9,955 8,828 8,775 2005.03 2005.09 2006.03 2006.09 25,000 20,000 15,000 10,000 5,000-50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000-16,000 Total Market (LHS) 14,278 MAG (RHS) 13,200 14,000 11,885 12,000 10,000 6,602 8,000 4,299 6,000 4,000 2,841 2,000 2,109-2005.03 2005.09 2006.03 2006.09 Source: AMAK Source: AMAK 12
Asset Management Total Fund Sales MAS fund market M/S continuously increased for the quarter recording M/S of 3.9% Quarter-end Balance of Fund Sales [KrW billion] M/S 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 - Fund sales M/S (RHS) Fund balance (LHS) 8,312 8,659 7,811 6,565 5,923 5,430 4,700 2005.03 2005.12 2006.03 2006.09 4.0% 3.5% 3.0% 2.5% 2.0% Source: Company data, AMAK 13
Asset Management Fund sales by type Equity-type fund which is a main source of profit for MAS recorded KrW 4.7 trillion for the quarter and its proportion is continuously increasing [KrW billion] Others MMF Hybrid Bond-type Domestic equity-type Overseas equity-type 8,659 8,312 7,811 1,320 1,138 6,565 1,084 669 814 5,923 5,430 1,029 1,126 956 513 1,016 4,700 554 1,137 829 1,038 955 452 1,514 1,337 951 785 1,260 795 1,096 1,043 2,984 3,119 900 1,170 2,799 1,065 971 2,048 1,538 874 1,113 1,022 1,406 1,558 244 266 394 524 2005.03 2005.06 2005.09 2005.12 2006.03 2006.06 2006.09 18% 8% 12% 11% 36% 15% Equity-type Proportion 24% 25% 33% 39% 49% 53% 54% Source: Company data 14
Asset Management Installment-type As end of August, MAS number of installment-type account stands at 230K maintaining superior M/S of 19.1% Installment-type Fund Accounts M/S (Unit: No. of account) 1,200,000 Industry (LHS) Mirae Asset Sec (RHS) 1,102,453 1,154,161 1,184,766 M/S 20.0% 1,000,000 933,061 18.0% 800,000 682,565 758,379 806,995 16.0% 600,000 14.0% 400,000 12.0% 200,000 10.0% - 2005.03 2005.12 2006.03 2006.08 8.0% No. of accounts sold through securities firms Source: AMAK 15
Brokerage - Equity Equity brokerage M/S recovered 7% along with higher portion of commissions generated from institutions which is more profitable than the retail (Institutionalization) Equity Brokerage M/S Proportion Breakdown Offline (Ins.) 14.9% 19.7% 9% 8% 7.17 8.22 8.41 8.12 Offline (Retail) 2.6% 2.1% 36.9% 44.2% 7% 6% 5% 4% 5.68 5.88 5.84 6.59 6.92 7.09 Online (Retail) 82.5% 78.2% 15.5% 47.6% 10.6% 44.6% FY04 FY04 FY04 FY04 FY05 FY05 FY05 FY05 FY06 FY06 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1'06 Q2'06 Q1'06 Q2'06 Trading Value Commissions Source: Company data Source: Company data 16
Investment Banking MAS continues to focus on strengthening IB competency and successfully completed the IPO of PSM (prior Pyeongsan Metal) which is the largest deal on KOSDAQ YTD FY06 Q2 Performance IPO Net Revenue Breakdown KOSDAQ IPO M/S (CY2005) KrW billions FY06 Q2 FY05 Investment Banking 11 61% 26 45% No. Lead Manager No. of IPOs M/S Commissions (KrW billion) IPO, Underwriting, ABS, M&A Fixed Income Securities 3 17% 9 17% Dealing 4 22% 21 38% 1 2 Mirae Asset Securities K 11 11 16.4% 16.4% 56.1 50.5 TOTAL 18 100% 56 100% 3 D1 10 14.9% 62.0 4 K 7 10.4% 27.8 5 H 5 7.5% 17.2 Source: Company data Source: S-IPO 17
Thank You For more information, please contact MIRAE_IR@miraeasset.com or visit www.miraeasset.com.
Appendix
Appendix-Income Statement [KrW million] Items Q2 FY06 Q1 FY06 FY05 FY04 FY03 Operating Income 122,781 132,736 432,134 272,842 293,905 A. Commissions Received 59,274 62,826 234,076 106,181 105,033 1) Brokerage commission 25,841 31,083 142,433 74,497 77,945 2) Underwriting commission 4,468 844 9,702 5,094 5,845 3) Brokerage Commission on beneficiary certificates 17,217 22,431 56,883 12,221 9,622 4) Commission from Wrap account & asset management 1,857 1,956 5,143 1,736 350 5) Others 9,891 6,512 19,915 12,633 11,271 B. Interest Income 15,833 12,035 48,796 19,184 21,844 C. Dividends Income 38 70 223 158 865 D. Distribution Income 76 162 160 224 415 E. Gain on Sales of Trading Securities 9,147 14,261 45,806 36,088 23,347 F. Gain on Valuation of Trading Securities (83) 2,141 1,422 1,522 80 G. Gain on Valuation of Deposits 5,648 6,077 18,384 12,705 14,479 H. Gain on Derivatives Transactions 14,985 20,492 83,180 96,780 127,836 I. Others 17,863 14,672 86 2 6 Operating Expenses 85,816 100,636 294,587 220,354 229,885 A. Other Operating Expenses 44,301 59,736 146,206 121,134 128,199 B. G&A Expenses 41,515 40,900 148,381 99,220 101,686 Net Revenue (Operating Profit + G&A Expenses) 78,480 73,000 285,928 151,708 165,706 Operating Profit 36,965 32,100 137,546 52,488 64,020 Net Profit (Before Tax) 36,625 32,429 128,349 46,570 63,261 Net Income (After Tax) 26,400 23,343 91,527 31,261 43,662 20
Appendix-Balance Sheet [KrW million] Items Q2 FY06 Q1 FY06 FY05 FY04 FY03 Total Assets 2,741,090 2,476,218 1,509,682 824,258 704,979 Ⅰ. Current Assets 2,563,198 2,315,391 1,373,547 677,867 602,121 Ⅱ. Fixed Assets 177,892 160,827 136,134 146,391 102,858 Total Liabilities 2,188,209 1,949,424 979,442 578,715 481,301 Ⅰ. Current Liabilities 2,186,818 1,947,671 978,066 577,790 480,623 Ⅱ. Long-term Liabilities 1,391 1,753 1,377 926 678 Total Shareholder's Equity 552,881 526,793 530,239 245,542 223,678 I. Stockholder's Equity 134,925 134,925 134,750 112,800 112,800 II. Capital Surplus 213,134 213,133 213,032 35,721 35,721 III. Retained Earnings 205,333 178,932 182,539 98,908 76,685 IⅤ. Capital Adjustment (511) (197) (81) (1,887) (1,528) Total Liabilities & Stockholder's Equity 2,741,090 2,476,217 1,509,682 824,258 704,979 21
Appendix-Ownership Structure Mirae Asset Group Within the Mirae Asset Group, Mirae Asset Securities is at the core of the group s sales and distribution channel well positioned to benefit from the group s three asset management arm Chairman Hyun-joo Park 68.7% 63.6% 79.8% 43.8% Mirae Asset Investment Trust Mgmt. Mirae Asset Investment Management Mirae Asset Maps Invest. Mgmt. Mirae Asset Capital 100% Mirae Asset Global Invest. Mgmt. (Asia) (Singapore) 3.1% 65.6% Mirae Asset Life Insurance 40.1% Mirae Asset Securities Asset Management Sales & Distribution (As of October 2006) 74.1% Mirae Asset Venture Investment 100% Mirae Asset Global Invest. Management (Hong Kong) 22