COMPANY INITIATION

(3649) 27 411 COMPANY INITIATION 2) 3772-1594 2) 3772-1514 david.min@goodi.com mhyun@goodi.com KOSPI : 1499.16p KOSDAQ : 674.41p : 224.2 : 5 : 9. : 6.5 (72.5%) 52 / : 24,95 /12,8 (6 ) : 128,134 (6 ) : 2,171 : 1.1% : 25.3% 14.5% 3 58.9% 6 4.2% 12 44.2% KOSDAQ 3 4.6% 3, 2, 1, 6 15.3% 12 48.7% 15 1 5 12 EPS PER PCR EV/EBITDA PBR ROE ( ) ( ) ( ) ( ) () (%) () () () () (%) (%) 25 51.3 12.9 13.1 12. 1,438 (27.) 17.4 9.1 13. 2.9 18.9.4 26 62.7 14.9 1.6 1.2 1,141 (2.7) 21.9 8.3 11.1 2.6 12.4.6 27E 75.9 2.2 15.8 14.4 1,369 2. 18.2 6.8 8.5 2.2 15.3.6 28E 111.5 36. 31.7 3. 2,841 17.6 8.8 5.2 5.5 1.7 23.6.6 29E 133.7 41.3 37.7 32.5 3,82 8.5 8.1 4.8 4.7 1.4 19.1.6 Korea Equity Research

COMPANY INITIATION 27411 3 5 7 9 12 22 2

COMPANY INITIATION 27411 3 37,4,, 1Q7 167.1, 37.7 SiH 4 ( ), TFT-LCD

COMPANY INITIATION 27411 EBITDA, 12 1 8 6 4 2 (%) 6 5 4 3 2 1 21 22 23 24 25 26 27E 28E / / (%) 35 3 25 2 15 1 5 21 22 23 24 25 26 27E 28E 28, SiH 4 capex 6 1. 5 4 3 2 1 21 22 23 24 25 26 27E 28E.8.6.4.2. MEMC, 5 SODIFF KANTO 4 CENTRAL GLASS MEMC 3 WACKER TOKUYAMA 2 1 4

COMPANY INITIATION 27411 Valuation 37,4, CB valuation 27E 28E () 23,7 () EPS 1,369 2,841 BPS 11,2 14,631 Valuation (x) P/E 17.3 8.3 P/B 2.1 1.6 EV/EBITDA 7.1 4.9 Multiple (x) () 27E 28E ( ) P/B (27 / 28, 5%) 4.8 / 3.6 53,64 53,393 EV/EBITDA (27 / 28, 5%) 9.8 / 8.3 3,51 42,74 42,75 48,49 2 8 Discount (%) 2 6 () 37,4 SiH 4 NF 3 5

COMPANY INITIATION 27411 Valuation Valuation (US$ ) (%) P/E (x) P/B (x) EV/EBITDA (x) (US$ ) 27E 28E 27E 28E 27E 28E 27E 28E 27E 28E 228.23 1 117 26.1 25.2 11. 1.5 1.9 1.7 7.9 7. Kanto Denka Kogyo 325.87 369 396 13.6 11.7 12.2 13.2 1.8 NA 5.3 5.4 Central Glass 1,465.23 1,646 1,652 9. 9. 15.1 14.9 1.2 1.2 6.8 6.8 MEMC Elec. Materials 13,549.37 1,931 2,352 42.4 43.2 19.9 15.9 7.3 5.2 14.4 11.7 Wacker 9,153.87 4,849 5,31 14. 15.4 19.5 18.1 3.7 3.2 8.2 7.4 Tokuyama 4,83.33 2.5 2.6 12. 13.9 28.7 23.6 3.1 2.7 11.7 1. 16.3 14. 4.8 3.6 9.8 8.3 CB 28 PBR EV/EBITDA 6, 5, 4, 3, 2, 1, 8, 6, 4, 2, (2,) 6

COMPANY INITIATION 27411 1Q7, 167.1, 37.7. 2Q7 ( ) 1Q6 2Q6 3Q6 4Q6 1Q7E 2Q7E 3Q7E 4Q7E 26 27E 12,92 16,581 16,7 17,21 16,78 17,938 19,971 21,297 62,69 75,914 4,847 5,386 6,685 6,671 5,926 6,859 7,819 8,843 23,589 29,447 2,81 3,216 4,368 4,54 3,77 4,67 5,434 6,345 14,926 2,156 EBITDA 6,377 6,856 8,83 8,156 8,411 9,331 1,257 11,82 29,472 39,8 2,556 2,59 3,94 2,434 3,99 4,82 4,367 4,269 1,594 15,816 2,25 2,52 3,94 2,337 2,829 3,727 3,987 3,897 1,183 14,44 (%) 37.6 32.5 41.8 38.8 35.5 38.2 39.2 41.5 37.6 38.8 21.7 19.4 27.3 26.4 22.6 25.7 27.2 29.8 23.8 26.6 EBITDA 49.4 41.3 5.5 47.4 5.3 52. 51.4 52. 47. 51.5 19.8 15.1 19.3 14.1 18.5 22.8 21.9 2. 16.9 2.8 17.4 15.1 19.3 13.6 16.9 2.8 2. 18.3 16.2 19. (%) 1.6 28.5 24.1 7.5 (2.9) 7.4 11.3 6.6 25.5 14.8 35.8 3.9 (17.) 22.2 18. 16.8 65.3 (1.8) 23.3 (21.3) 27.3 31.7 7. (2.2) 143.9 11.2 23.7 (24.5) 21.1 31.7 7. (2.2) (%) 4.3 26.8 22.2 35.5 29.5 8.2 24.8 23.8 22.3 21.1 (21.4) (12.) 25.4 13.3 34.6 43.2 24.4 39.8 15.4 35. (51.9) (2.9) (.4) 57.4 21.2 62.7 41.1 75.4 (19.4) 49.3 (51.3) (26.1) (.4) 153.4 25.8 48.9 28.8 66.8 (15.4) 41.8 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % 1.8% 2.4% 12.5% 29.3% 39.2% 9.3% 9.% 7.6% 76.7% 7.3% 61.7% 53.2% 27E 28E 29E 21E SiH4 WF6 NF3 7

COMPANY INITIATION 27411 Blended ASP 25, 2, 76 75 15, 74 1, 73 5, 72-1Q6 2Q6 3Q6 4Q6 1Q7E 2Q7E 3Q7E 4Q7E 71 NF 3 SiH 4 ASP 8

COMPANY INITIATION 27411 TFT-LCD Glass LPL 3, 2,5 2, 1,5 1, 5-1Q6 2Q6 3Q6 4Q6 1Q7E 2Q7E 3Q7E 4Q7E 1Q8E 2Q8E 3Q8E 4Q8E Glass, Gas NF 3 9

COMPANY INITIATION 27411 TFT-LCD Gate SiH 4, NH 3, N 2, N 2O, TEOS (Tetraethoxy Silane), TFT SiH 4, H 2 Source/Drain SiH 4, Phosphine(PH 3), H 2 Passivation SiH 4, NH 3, N 2 Sputtering Ar Ashing O 2 Dry Etcher CF 4, F - 6, Cl 2 (Cleaning) NF 3, F 2 N 2 N 2, NF 3 : 1,3 t/yr ( ) Air Products: US$5 Air Products () 2,5 t/yr (28.6) 5 t/yr (28.3 ) Kanto Denka Kogyo () : 3 t/yr ( ) 6 t/yr (28) Mitsui Chemical: Mitsui Chemical () : 4 t/yr (4. 27.3 ) Central Glass () WF 6 : 1 t/yr ( ) Matheson Trigas: Air Products () 2 t/yr (1Q8) US$3 (27.3) Cl 2, NH 3, WF 6 Metheson Trigas () Kanto Denka Kogyo () SiH 4 : 1,3 t/yr ( ) 2,5 t/yr (28.6) MEMC () ASiMI (5, t/yr, ) Mitsui Chemical (15 t/yr, ) Denal Silane (3 t/yr, ). 1

COMPANY INITIATION 27411 (ton/quarter) 3 25 2 15 1 5 SiH4 WF6 NF3 1Q5 2Q5 3Q5 4Q5 1Q6 2Q6 3Q6 4Q6 1Q7E 2Q7E 3Q7E 4Q7E 11

COMPANY INITIATION 27411, 43 72 62 231 11,95 43, 144 1,316, (Off-grid) (Grid-connected) (Off-grid non-domestic) 12

COMPANY INITIATION 27411, Project Million Solar Roofs Initiative 1, Roofs Program 1, Roof-top PV Program 3,25MW (1 ) 4,82MW 3MW 5MW Project 1999 ~ 21 1994 ~ 21 2 ~ 24 1999 ~ 23 23 ~ 213 - - - - - (Green Pricing) - : 7.7 /kwh (4kW (5,3 ) 1/3 ) (1,7 ) (8% 2.8%) - - - - - (, MW) Country 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 Australia 7.3 8.9 1.7 12.7 15.7 18.7 22.5 25.3 29.2 33.6 39.1 45.6 52.3 6.6 Austria.6.8 1.1 1.4 1.7 2.2 2.9 3.7 4.9 6.1 1.3 16.8 21.1 24. Canada 1. 1.2 1.5 1.9 2.6 3.4 4.5 5.8 7.2 8.8 1. 11.8 13.9 16.7 Switzerland 4.7 5.8 6.7 7.5 8.4 9.7 11.5 13.4 15.3 17.6 19.5 21. 23.1 27.1 Denmark.1.1.1.2.4.5 1.1 1.5 1.5 1.6 1.9 2.3 2.7 Germany 5.6 8.9 12.4 17.7 27.8 41.8 53.8 69.4 113.7 194.6 278. 431. 794. 1,729. Spain 4. 4.6 5.7 6.5 6.9 7.1 8. 9.1 12.1 15.7 2.5 27. 37. 57.4 Finland.9 1. 1.2 1.3 1.5 2. 2.2 2.3 2.6 2.7 3.1 3.4 France 1.8 2.1 2.4 2.9 4.4 6.1 7.6 9.1 11.3 13.9 17.2 21.1 26. 33. UK.2.3.3.4.4.6.7 1.1 1.9 2.7 4.1 5.9 8.2 1.9 Israel.1.1.2 1.2.2.3.3.4.4.5.5.5.9 1. Italy 8.5 12.1 14.1 15.8 16. 16.7 17.7 18.5 19. 2. 22. 26. 3.7 37.5 Japan 19. 24.3 31.2 43.4 59.6 91.3 133.4 28.6 33.2 452.8 636.8 859.6 1,132. 1,421.9 Korea 1.5 1.6 1.7 1.8 2.1 2.5 3. 3.5 4. 4.8 5.4 6. 8.5 15. Mexico 5.4 7.1 8.8 9.2 1. 11. 12. 12.9 13.9 15. 16.2 17.1 18.2 18.7 Netherlands 1.3 1.6 2. 2.4 3.3 4. 6.5 9.2 12.8 2.5 26.3 45.9 49.1 5.8 Norway 3.8 4.1 4.4 4.7 4.9 5.2 5.4 5.7 6. 6.2 6.4 6.6 6.9 7.3 Portugal.2.2.3.3.4.5.5.9 1.1 1.3 1.7 2.1 2.6 3. Sweden.8 1. 1.3 1.6 1.8 2.1 2.4 2.4 2.8 3. 3.3 3.6 3.9 4.2 USA 43.4 5.3 57.8 66.8 76.5 88.2 1.1 117.3 138.8 167.8 212.2 275.2 376. 476. Total 11 136 164 199 245 314 396 52 729 989 1,334 1,828 2,67 3,7 13

COMPANY INITIATION 27411, IEA PVPS (25 ) (W/Capita) 18 15 12 9 6 3 Australia Austria Canada Switzerland Denmark Germany Spain France UK Israel Italy Japan Korea Mexico Netherlands Norway Sweden USA (25 ) Country (US$ ) R&D Demonstration/ field trials Market stimulation Total Portion (%) Australia 3.84 16.15 19.99 3.3 Austria.79 5.93 6.72 1.2 Canada 5.62.66.8 6.36.96 Switzerland 11.12.24 1.36 12.72 1.93 Denmark 7.5.7 8.2 1.24 Germany 51.9. Spain.65.1 France 15.4 18.5 33.9 5.13 UK 5.29 16.64 21.93 3.32 Israel.17.3.47.7 Italy 5.9.25 37 43.2 6.54 Japan 37.24 96.19 23.61 157.4 23.78 Korea 5.89 7.1 59.86 72.85 11.3 Mexico. Netherlands 13.5 2.2 15.7 2.38 Norway 1.3 1.3.2 Sweden 2.42.24 2.66.4 USA 75.8 1 18 256.8 38.88 14

COMPANY INITIATION 27411 24,, (, Mwatt) Japan USA Europe 1, 5,1 2,8-8,9 (Ingot) sc-si, 1,71 1, 275 - mc-si, 2,4 5 3,875-9,121 (Wafer) sc-si, MW 15 - mc-si, MW 177 181 352-86 (Cell)All types, MW 64 138 329 38 1,19 MW/year 65 171 425 49 1,295 sc-si, MW 19 86 126 1 322 mc-si, MW 396 3 86 1 513 a-si, MW 25 14 2-41, MW 6-198 9 267 Other, MW NA 9 8 <1 17 Total, MW 59 139 42 11 1,16 MW/year 821 177 578 53 1,629, Cell/Module manufacturer Technology Total Production (MWp) Maximum production capacity (MWp) Cell Module Cell Module Neskor Solar Co. sc-si.28 2. Photon Semiconductor & Energy Co. sc-si 5.2 6. Symphonyenergy sc-si, mc-si 3. 3 S-Energy Co. mc-si 1.2 2 Hyundai Co. mc-si.4 1 LS Industrial Systems 1. 1 Solar Tech Co. sc-si, mc-si.4 1 KD Solar sc-si, mc-si.4 1 Haesung Solar Co. sc-si, mc-si NA 1 Eta Solar sc-si, mc-si NA 1 Total 5.3 6.4 8. 11 15

COMPANY INITIATION 27411 ( ) 9 8 7 6 5 4 3 2 1 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 9 8 7 6 5 4 3 2 1 23 24 25 26 27 28 29 21 16

COMPANY INITIATION 27411 (25 ) BP Solar (Australia, Spain, USA) 5% RWE Schott (Germany, USA) 6% Shell Solar (Germany, USA) 4% Isofoton (Spain) 4% Photowatt International (FRA) 2% Sharp (Japan) 28% Mitsubishi Electric (Japan) 7% Sanyo Electric (Japan) 8% Kyocera (Japan) 9% Q-Cells (Germany) 11% Others (23 companies) 16% Solar Module Solar Module 6% Silicon 4% (26 ) (US$ ) Si (Feedstock).5 Ingot, Wafer.9 Solar Cell 1.7 Solar Module 3. System / Equipment 1. Installation / Service 7. Total 14.1 17

COMPANY INITIATION 27411 (25, US$/Watt) (US$) 8 6 4 2 Australia Austria Canada Switzerland Denmark Germany France UK Israel Italy Japan Korea Mexico Netherlands Sweden USA,, 18

COMPANY INITIATION 27411 Bulk Bulk ( : 28%, :18%) Si ( :2~3) (CellModule ) (2~3) Substrate (Glass, ), Flexible 낮은생산성 (Cell 공정과 Module 공정분리 ) ( : 1~12%) Wafer Si ( :25~35) Cell (CVD, Sputter ) (5~6), (Wafer-based) SiO 2 Si Feedstock Si Block Si Wafer TFT-LCD Lamination Solar Cell Module 19

COMPANY INITIATION 27411 SiH 4 MG-Si H 2 TET TCS synthesis by Hydrogenation of TET in Fluidised bed reactor TCS TET Separation TCS/TET by Distillation TET TCS Redistribution 1 in catalytic column Separation DCS/TET/TCS distillation DCS Redistribution 2 in catalytic column Electrical Energy Pyrolysis on heated Silicon rods Poly silicon Residues: spent mass Low boiling impurities Separation DCS/TET/SiH 4 SiH 4 Purification of SiH 4 distillation TET H 2 SiH 4, TFT-LCD, (SiHCl 3) (SiH 4) Bell-Jar (Rod) Fluid Bed (granule) VLD (pellet) Bell-Jar (Rod) Hemlock (US), Wacker (Germany), Tokuyama (Japan), MiPSi (US), SUMCO (Japan) ASiMI (US), SGS (Norway) Wacker (Germany), (Korea) Tokuyama (Japan) Fluid Bed (granule) MEMC (US) SGS (Norway) Space Dec. (powder) JSS (Germany) 2

COMPANY INITIATION 27411 SiH 4, LCD 21

COMPANY INITIATION 27411 : 25 26 27E 28E 29E 2.5 223.4 238.8 28.3 34. 49.1 38.2 41.6 55.9 66.3 13. 9.4 8.2 12. 16.4 6.6.2.2.2.2 &..... & 6.8 9.3 11.3 16.6 19.9 21.4 17.5 2. 24.6 27.1 1.3 1.8 2. 2.4 2.7 151.4 185.2 197.2 224.4 237.7 7.8 9.1 7.9 8.1 8.5 136.9 168.6 182.3 29.3 221.4 6.6 7.5 7. 7. 7.7 124. 135.8 138.2 126. 118.8 46.2 47.1 55. 53. 6.7 5.2 17.1 15.3 18.8 22.6 33.5 19.1 29.7 19.3 18.3 3.8 5.7 5.7 1.3 15. 3.7 5.2 4.4 4.6 4.8 77.8 88.8 83.2 73. 58.1 27.9 27.9 27.9 27.9 27.9 48.6 59.3 53.6 43.3 28.3 1.3 1.6 1.7 1.7 1.8 76.5 87.5 1.6 154.3 185.2 4.4 4.5 4.5 5.3 5.3 32.5 34.3 34.3 58.5 58.5 39.5 48.8 61.8 9.5 121.5.1.... 113.9 112. 116.8 1.8 89.5 ( ) 94.2 12.4 18.4 88.6 72.9 25 26 27E 28E 29E 12.4 38.9 26.4 44.3 52.1 12. 1.2 14.4 3. 32.5 1.8 13.9 18.2 2.5 21.5.6.7.7.6.6.4.6.1.2.2 ( ) (1.2)..1.3.1 ( )....., (1.5) 12.1 (6.6) (6.7) (2.3).2 1.5 (.5) (.6) (.4) (42.8) (41.4) (3.3) (48.1) (34.9) ( ) (6.3) 6.4 (.) (.) (.) ( )..... ( ) (.2) (.)... ( ) (35.8) (45.5) (32.) (47.5) (33.6) 1.6.... ( ) (1.1) (.9).5 (.) (.7) (1.) (1.4) 1.2 (.6) (.5) Free Cash Flow (3.4) (2.4) (3.9) (3.8) 17.3 4.5 (2.) 3.5 7.6 (12.8) ( ) 39.9 (2.1) 4.8 (16.1) (11.3) ( ) 1.1.9. 25.. (.4) (.9) (1.3) (1.3) (1.6) (.2) (.)... ( ) 1.1 (4.4) (.4) 3.8 4.4 2.9 13. 8.6 8.2 12. 13. 8.6 8.2 12. 16.4 / (%) 69.8 72.6 42.2 42.6 25.1 / (%) 21.1 22.2 24. 18.4 16.1 / (%) 3.2 3.5 57. 43.2 64. 25 26 27E 28E 29E 51.3 62.7 75.9 111.5 133.7 (%) 5.1 22.3 21.1 46.8 2. (%) 87.9. 98.4 98.4 98.4 3.7 39.1 46.5 63.6 77.8 (%) 2.8 27.2 18.8 36.8 22.3 2.5 23.6 29.4 47.9 55.9 (%) 4. 37.6 38.8 43. 41.8 7.6 8.7 9.3 11.9 14.6 (%) (1.1) 14.2 7.2 28.1 22.7 12.9 14.9 2.2 36. 41.3 (%) (17.3) 15.4 35. 78.6 14.9 (%) 25.2 23.8 26.6 32.3 3.9 ( ).2 (4.3) (4.3) (4.2) (3.7).2.2.1.2.2 3.8 3.5 3.5 3.4 2.9 ( ) 2.5 (.4) (.1) (.2) (.) ( ).1.... ( )..... ( ) 1.2 (.7) (.9) (.9) (.9) 13.1 1.6 15.8 31.7 37.7 (%) (15.3) (19.4) 49.3 1.7 18.6 ( )..... 13.1 1.6 15.8 31.7 37.7 1.1.4 1.4 1.7 5.2 12. 1.2 14.4 3. 32.5 (%) (22.5) (15.4) 41.8 18. 8.2 EBITDA 24.4 29.5 39.1 57.2 63.5 (%) 5.4 2.8 32.6 46.3 11.1 (%) 7.3 13.2 9.3 5.3 4.9 25 26 27E 28E 29E () 1,438 1,141 1,369 2,841 3,82 () 1,432 1,141 1,67 2,841 3,81 () 8,719 9,743 11,2 14,631 17,562 () 1 15 15 15 15 PER () 17.4 21.9 18.2 8.8 8.1 PEG ().7.6.4.5.4 PER () 17.4 21.9 15.5 8.8 8.1 PCR () 9.1 8.3 6.8 5.2 4.8 EV/ EBITDA () 13. 11.1 8.5 5.5 4.7 PBR () 2.9 2.6 2.2 1.7 1.4 (%).4.6.6.6.6 (%) 4. 37.6 38.8 43. 41.8 (%) 25.2 23.8 26.6 32.3 3.9 EBITDA (%) 47.6 47. 51.5 51.3 47.5 (%) 23.5 16.2 19. 26.9 24.3 (%) 6.8 4.8 6.2 11.6 11.1 (%) 18.9 12.4 15.3 23.6 19.1 (%) 1.2 1. 12.5 19.6 18. / (%) 123.2 117. 17.8 57.4 39.3 (%) 16.3 81.1 75.7 15.4 19.3 () 3.4 4.3 5.7 1.7 14.1 ().3.3.3.4.5 () 7.2 7.8 7.3 8. 7.3 () 2.9 3.2 4.1 5. 5.2 () 8. 5.6 4.7 6.5 6.5 () 3.3 4.6 7.6 6.6 6.3 22

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