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Sector update Korea / Handsets 21 March 2016 OVERWEIGHT Stocks under coverage Company Rating Price Target price, Analyst 3774 3831 jinho.cho@miraeasset.com See the last page of this report for important disclosures

, Analyst, 3774 3831, jinho.cho@miraeasset.com 2

, Analyst, 3774 3831, jinho.cho@miraeasset.com 3

, Analyst, 3774 3831, jinho.cho@miraeasset.com (Second) 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0 Sony Xperia Z5 Compact Sony Xperia Z5 Apple iphone6 Apple iphone6 Plus HTC One M9 LG G4 Samsung Galaxy S6 Samsung Note 4 4

, Analyst, 3774 3831, jinho.cho@miraeasset.com 5

, Analyst, 3774 3831, jinho.cho@miraeasset.com 자료 : 삼성전자, 미래에셋증권리서치센터 6

, Analyst, 3774 3831, jinho.cho@miraeasset.com 7

, Analyst, 3774 3831, jinho.cho@miraeasset.com 자료 : 미래에셋증권리서치센터 8

, Analyst, 3774 3831, jinho.cho@miraeasset.com 9

, Analyst, 3774 3831, jinho.cho@miraeasset.com 10

, Analyst, 3774 3831, jinho.cho@miraeasset.com 11

, Analyst, 3774 3831, jinho.cho@miraeasset.com 12

, Analyst, 3774 3831, jinho.cho@miraeasset.com Front End Sensor Die Attach IR Attach + PCB Test Back End Auto Focusing Lens Bonding Lens Curing Actuator Active Align + Holder Attach De-Focus Tape Attach Calibration Actuator Test 13

, Analyst, 3774 3831, jinho.cho@miraeasset.com Part Supplier CIS Sony ( RGB 12MP + RGB 12MP) Lens module 6P lens module ( wide): Largan; Kantatsu 5P lens module ( telephoto lens): Largan; Kantatsu; Genuius VCM(wide CCM) ALPS; Mitsumi Equipment ASM; HyVison 14

, Analyst, 3774 3831, jinho.cho@miraeasset.com 15

, Analyst, 3774 3831, jinho.cho@miraeasset.com 16

, Analyst, 3774 3831, jinho.cho@miraeasset.com Company Analysis 17

Earnings preview Korea / Handsets 21 March 2016 BUY 72,000 62,800 Upside/downside (%) 14.6 KOSPI 1,987.99 10,277 39,800-64,900 57.45 21.4 Forecast earnings & valuation Fiscal year ending Dec-14 Dec-15 Dec-16 E Dec-17 E 59,041 56,509 57,675 60,209 1,828.6 1,192.4 1,613.1 1,642.6 501.4 242.5 844.0 885.2 399.4 124.5 844.0 885.2 2,440 760 5,158 5,409 125.9 (68.8) 578.2 4.9 24.2 64.8 12.1 11.5 4.4 4.9 4.7 4.4 0.3 0.4 0.3 0.3 0.9 0.7 0.9 0.8 4.3 2.1 6.9 6.7 51.8 51.4 47.0 40.3 Change to EPS Dec-14 Dec-15 Dec-16 E Dec-17 E 2,440 760 5,158 5,409 2,440 760 5,172 5,738 - - (0.3) (5.7) Performance (KRW) Price (LHS) Rel. to KOSPI (RHS) 68,000 63,000 58,000 53,000 48,000 43,000 38,000 Mar15 Jun15 Sep15 Dec15 (%) 120 110 100 90 80 70 60 Performance 1M 3M 12M 5.4 20.5 4.3 (0.2) 20.0 6.4, Analyst 3774 3831 jinho.cho@miraeasset.com See the last page of this report for important disclosures 18

, Analyst, 3774 3831, jinho.cho@miraeasset.com (USD/t) 12,000 10,000 8,000 6,000 4,000 2,000 0 2010 2011 2012 2013 2014 2015 2016 19

, Analyst, 3774 3831, jinho.cho@miraeasset.com 6% 5% 4.1% 4.9% 5.1% 3.8% 4% 3% 4.0% 2% 1% 0% 2012Q1 2012Q3 2013Q1 2013Q3 2014Q1 2014Q3 2015Q1 2015Q3 16% 14% 14.8% 15.1% 12% 10% 8% 9.9% 12.8% 6% 4% 2% 5.6% 7.6% 0% 2012Q1 2012Q3 2013Q1 2013Q3 2014Q1 2014Q3 2015Q1 2015Q3 25% 21.3% 20% 15% 16.4% 18.3% 14.2% 10% 5% 10.2% 9.6% 11.8% 0% 2012Q1 2012Q3 2013Q1 2013Q3 2014Q1 2014Q3 2015Q1 2015Q3 20

, Analyst, 3774 3831, jinho.cho@miraeasset.com 21

, Analyst, 3774 3831, jinho.cho@miraeasset.com Summary financial statements 2014 2015 2016E 2017E 59,041 56,509 57,675 60,209 45,299 43,635 43,984 45,953 13,742 12,874 13,691 14,256 11,913 11,682 12,078 12,614 1,829 1,192 1,613 1,643 1,829 1,192 1,613 1,643 (326) (367) (378) (373) 305 412 490 510 (589) (650) (600) (600) 1,218 586 1,125 1,180 540 340 281 295 501 243 844 885 399 124 844 885 EPS ( 지배주주지분, 원 ) 2,440 760 5,158 5,409 2014 2015 2016E 2017E 4.0 (4.3) 2.1 4.4 4.3 (6.3) 6.3 4.1 46.4 (34.8) 35.3 1.8 125.9 (68.8) 578.2 4.9 125.9 (68.8) 578.2 4.9 23.3 22.8 23.7 23.7 3.1 2.1 2.8 2.7 0.7 0.2 1.5 1.5 2014 2015 2016E 2017E 17,483 19,261 20,369 20,641 2,244 2,852 3,054 3,646 96 168 175 182 8,106 8,968 9,501 9,297 5,711 5,934 6,287 6,152 1,325 1,338 1,352 1,365 19,586 20,306 20,719 21,217 10,597 10,619 10,663 10,768 4,646 5,051 5,256 5,469 4,343 4,637 4,800 4,980 37,068 39,567 41,088 41,859 15,754 17,005 17,625 17,448 8,806 9,680 10,255 10,034 2,582 2,916 2,916 2,916 4,366 4,410 4,454 4,498 8,323 9,279 9,373 9,472 6,489 6,937 6,937 6,937 1,834 2,341 2,436 2,534 24,077 26,284 26,998 26,920 11,719 11,899 12,706 13,554 1,272 1,384 1,384 1,384 12,991 13,283 14,090 14,938 64,808 65,802 70,265 74,955 2014 2015 2016E 2017E 2014 2015 2016E 2017E 2,029 2,272 2,295 2,778 4.3 2.1 6.9 6.7 501 249 844 885 1.4 0.6 2.1 2.1 1,978 1,977 2,126 2,154 32.6 37.6 38.7 37.7 2,019 (153) (396) (412) 48.1 55.1 58.4 57.0 (2,469) 200 (280) 150 51.1 59.7 63.1 61.5 (2,397) (2,585) (2,056) (2,149) 51.8 51.4 47.0 40.3 (2,065) (1,762) (1,730) (1,806) 5.6 3.2 4.3 4.4 (331) (823) (325) (343) 64 920 (37) (37) (73) (37) (37) (37) 0 0 0 0 138 741 0 0 2,645 2,244 2,852 3,054 2,244 2,852 3,054 3,646 22

Earnings preview Korea / Handsets 21 March 2016 HOLD 56,000 60,100 Upside/downside (%) (6.8) KOSPI 1,987.99 4,489 49,650-81,800 26.35 20.1 Forecast earnings & valuation Fiscal year ending Dec-14 Dec-15 Dec-16 E Dec-17 E 6,100 6,176 6,254 7,452 64.9 301.3 337.9 387.1 508.9 20.6 237.9 277.2 502.7 11.2 191.5 223.2 6,730 150 2,563 2,988 52.2 (97.8) 1,611.3 16.5 8.1 419.9 22.6 19.4 6.1 7.2 5.1 4.4 1.4 1.2 1.3 1.3 0.9 1.2 1.0 1.0 11.7 0.5 5.5 6.1 5.1 21.2 22.2 6.3 Change to EPS Dec-14 Dec-15 Dec-16 E Dec-17 E 6,730 150 2,563 2,988 6,730 150 2,453 3,024 - - 4.5 (1.2) Performance (KRW) Price (LHS) Rel. to KOSPI (RHS) 87,000 82,000 77,000 72,000 67,000 62,000 57,000 52,000 47,000 Mar15 Jun15 Sep15 Dec15 (%) 110 105 100 95 90 85 80 75 70 65 60 Performance 1M 3M 12M (0.3) (10.7) (24.3) (5.9) (11.2) (22.2), Analyst 3774 3831 jinho.cho@miraeasset.com See the last page of this report for important disclosures 23

, Analyst, 3774 3831, jinho.cho@miraeasset.com 24

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, Analyst, 3774 3831, jinho.cho@miraeasset.com Summary financial statements 2014 2015 2016E 2017E 6,100 6,176 6,254 7,452 5,065 4,865 4,894 5,844 1,035 1,312 1,360 1,608 970 1,010 1,022 1,221 65 301 338 387 65 301 338 387 (18) (10) (56) (53) 2 7 36 36 767 69 0 0 816 367 317 370 127 45 79 92 509 21 238 277 503 11 191 223 EPS ( 지배주주지분, 원 ) 6,730 150 2,563 2,988 2014 2015 2016E 2017E (26.1) 1.2 1.3 19.1 (33.1) 26.7 3.7 18.2 (86.0) 364.0 12.1 14.6 52.2 (97.8) 1,611.3 16.5 52.2 (97.8) 1,611.3 16.5 17.0 21.2 21.7 21.6 1.1 4.9 5.4 5.2 8.2 0.2 3.1 3.0 2014 2015 2016E 2017E 3,554 2,730 3,441 3,998 688 1,035 952 1,649 790 90 94 97 965 821 1,314 920 841 679 952 1,185 270 105 130 146 4,165 4,539 4,345 4,199 2,926 3,298 3,091 2,929 979 844 878 914 260 397 375 356 7,719 7,269 7,785 8,197 2,151 1,768 2,098 2,283 599 485 757 943 1,116 1,025 1,025 1,025 436 258 316 316 925 1,186 1,193 1,200 597 1,017 1,017 1,017 328 169 176 183 3,076 2,954 3,290 3,483 4,553 4,222 4,402 4,621 89 93 93 93 4,643 4,315 4,495 4,714 58,677 54,408 56,722 59,543 2014 2015 2016E 2017E 2014 2015 2016E 2017E 380 1,307 480 1,266 11.7 0.5 5.5 6.1 509 21 238 277 6.8 0.3 3.2 3.5 660 494 732 687 51.7 44.9 47.6 52.3 (453) 792 (29) (29) 54.7 52.8 62.3 54.7 (336) 0 (461) 330 36.3 32.0 36.2 41.6 (371) (1,083) (505) (510) 5.1 21.2 22.2 6.3 (845) (1,010) (519) (522) 3.7 29.1 6.0 7.3 474 (72) 14 12 (30) 123 (58) (58) (58) (58) (58) (58) 0 0 0 0 67 259 0 0 738 688 1,035 952 688 1,035 952 1,649 27

Earnings preview Korea / Handsets 21 March 2016 BUY 130,000 83,100 Upside/downside (%) 56.4 KOSPI 1,987.99 1,967 79,000-116,000 14.66 11.7 Forecast earnings & valuation Fiscal year ending Dec-14 Dec-15 Dec-16 E Dec-17 E 6,466 6,138 6,504 7,545 314.0 223.7 297.0 360.5 112.7 95.1 206.2 257.8 112.7 95.1 206.2 257.8 4,761 4,017 8,712 10,894 517.9 (15.6) 116.8 25.1 23.6 24.8 9.9 7.9 4.4 4.1 3.6 3.1 0.0 0.0 0.0 0.0 1.6 1.3 1.0 0.9 7.5 5.4 10.8 12.1 62.7 30.5 26.8 17.2 Change to EPS Dec-14 Dec-15 Dec-16 E Dec-17 E 4,761 4,017 8,712 10,894 4,761 4,017 8,862 10,867 - - (1.7) 0.3 Performance (KRW) Price (LHS) Rel. to KOSPI (RHS) 120,000 115,000 110,000 105,000 100,000 95,000 90,000 85,000 80,000 75,000 Mar15 Jun15 Sep15 Dec15 (%) 110 105 100 95 90 85 80 75 70 Performance 1M 3M 12M (1.0) (17.7) (25.1) (6.5) (18.2) (23.1), Analyst 3774 3831 jinho.cho@miraeasset.com See the last page of this report for important disclosures 28

, Analyst, 3774 3831, jinho.cho@miraeasset.com 29

, Analyst, 3774 3831, jinho.cho@miraeasset.com Summary financial statements 2014 2015 2016E 2017E 6,466 6,138 6,504 7,545 5,603 5,374 5,642 6,560 863 764 862 985 549 540 565 624 314 224 297 360 314 224 297 360 (66) (39) (34) (32) 0 0 0 0 (57) (62) 2 3 192 122 264 331 79 27 58 73 113 95 206 258 113 95 206 258 EPS ( 지배주주지분, 원 ) 4,761 4,017 8,712 10,894 2014 2015 2016E 2017E 4.1 (5.1) 6.0 16.0 25.1 (11.5) 12.8 14.2 130.6 (28.7) 32.8 21.4 625.0 (15.6) 116.8 25.1 517.9 (15.6) 116.8 25.1 13.3 12.4 13.3 13.1 4.9 3.6 4.6 4.8 1.7 1.5 3.2 3.4 2014 2015 2016E 2017E 2,082 2,344 2,694 3,043 396 659 670 818 1 3 3 3 1,262 1,250 1,300 1,450 354 362 650 700 69 70 71 71 2,347 2,130 2,094 2,112 1,898 1,672 1,619 1,621 4 2 2 2 445 456 473 490 4,429 4,473 4,788 5,155 1,647 1,743 1,845 1,947 965 1,100 1,200 1,300 495 455 455 455 186 188 190 192 1,086 930 937 944 965 757 757 757 120 173 180 187 2,732 2,673 2,782 2,891 1,696 1,800 2,006 2,264 0 0 0 0 1,696 1,800 2,006 2,264 71,681 76,066 84,777 95,671 2014 2015 2016E 2017E 2014 2015 2016E 2017E 743 845 399 587 7.5 5.4 10.8 12.1 192 95 206 258 2.5 2.1 4.5 5.2 535 484 423 420 20.6 21.3 28.4 32.7 62 (27) 7 7 68.5 74.7 71.6 66.5 (45) 293 (237) (99) 50.3 61.4 64.5 60.5 (309) (349) (387) (439) 62.7 30.5 26.8 17.2 (244) (300) (325) (377) 4.8 5.7 8.7 11.1 (65) (49) (62) (62) (440) (234) 0 0 0 0 0 0 0 0 0 0 (440) (262) 0 0 400 396 659 670 396 659 670 818 30

Earnings preview Korea / Handsets 21 March 2016 BUY 54,000 32,150 Upside/downside (%) 68.0 KOSDAQ 691.49 523 26,800-41,400 3.45 33.3 Forecast earnings & valuation Fiscal year ending Dec-14 Dec-15 Dec-16 E Dec-17 E 391 536 660 660 36.1 55.9 62.1 61.5 30.2 48.5 62.7 62.3 30.2 48.5 62.7 62.3 1,855 2,980 3,855 3,830 (8.5) 60.7 29.4 (0.7) 13.5 10.6 8.3 8.4 4.7 4.0 3.3 2.8 2.4 3.2 3.7 3.7 1.4 1.5 1.3 1.2 10.5 14.9 16.8 14.9 (71.8) (66.5) (68.9) (70.9) Change to EPS Dec-14 Dec-15 Dec-16 E Dec-17 E 1,855 2,980 3,855 3,830 1,855 2,980 3,889 3,862 - - (0.9) (0.8) Performance (KRW) Price (LHS) Rel. to KOSDAQ (RHS) 43,000 41,000 39,000 37,000 35,000 33,000 31,000 29,000 27,000 25,000 Mar15 Jun15 Sep15 Dec15 (%) 120 115 110 105 100 95 90 85 80 75 70 Performance 1M 3M 12M 14.8 (6.9) (7.7) 9.3 (7.5) (5.7), Analyst 3774 3831 jinho.cho@miraeasset.com See the last page of this report for important disclosures 31

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, Analyst, 3774 3831, jinho.cho@miraeasset.com Summary financial statements 2014 2015 2016E 2017E 391 536 660 660 312 419 523 523 79 117 137 137 43 61 75 75 36 56 62 62 36 56 62 62 5 4 8 8 (0) 0 0 0 (2) (0) 0 0 38 60 70 70 8 12 7 7 30 48 63 62 30 48 63 62 EPS ( 지배주주지분, 원 ) 1,855 2,980 3,855 3,830 2014E 2015 2016E 2017E (4.6) 37.2 23.2 (0.0) 9.4 48.8 17.1 (0.4) 5.5 55.0 11.0 (0.8) (8.5) 60.7 29.4 (0.7) (8.5) 60.7 29.4 (0.7) 20.1 21.8 20.8 20.7 9.2 10.4 9.4 9.3 7.7 9.0 9.5 9.4 2014 2015 2016E 2017E 337 406 454 496 190 233 274 312 25 0 0 0 92 108 113 115 24 58 61 62 6 6 6 6 40 52 55 58 15 16 20 24 6 6 6 6 19 30 29 28 376 458 508 553 75 103 107 109 60 88 92 94 0 0 0 0 15 15 15 15 2 4 4 4 0 0 0 0 2 4 4 4 78 107 111 113 299 351 397 440 0 0 0 0 299 351 397 440 18,375 21,564 24,420 27,050 2014 2015 2016E 2017E 2014 2015 2016E 2017E 48 21 72 73 10.5 14.9 16.8 14.9 30 48 63 62 8.3 11.6 13.0 11.7 5 14 13 12 25.6 27.9 32.9 34.0 12 (61) 0 0 85.7 68.4 61.2 63.2 1 20 (3) (2) 58.1 50.4 49.6 51.2 44 21 (15) (15) (71.8) (66.5) (68.9) (70.9) (2) (3) (7) (7) (7.2) (12.9) (7.7) (7.6) 45 24 (8) (8) (8) 1 (16) (20) (9) (10) (16) (20) 0 5 0 0 0 0 0 0 105 190 233 274 190 233 274 312 33

, Analyst, 3774 3831, jinho.cho@miraeasset.com Target Price and Recommendation Chart (KRW) Stock Price Target Price 88,000 83,000 78,000 73,000 68,000 63,000 58,000 53,000 48,000 43,000 38,000 Mar14 Sep14 Mar15 Sep15 Mar16 Date Recommendation 12m target price 2014-03-20 BUY 85,000 2014-04-03 BUY 85,000 2014-04-29 BUY 85,000 2014-05-28 BUY 85,000 2014-06-23 BUY 85,000 2014-07-18 BUY 85,000 2014-07-24 BUY 85,000 2014-10-06 BUY 85,000 2014-10-30 BUY 85,000 2014-11-20 BUY 85,000 2014-12-16 BUY 85,000 2015-01-30 BUY 85,000 2015-02-26 BUY 85,000 2015-04-09 BUY 82,000 (Down) 2015-07-14 BUY 68,000 (Down) 2015-10-16 BUY 68,000 2015-10-22 BUY 68,000 2015-10-30 BUY 68,000 2016-01-12 BUY 68,000 2016-01-27 BUY 68,000 2016-02-25 BUY 72,000 (Up) 2016-03-21 BUY 72,000 (KRW) Stock Price Target Price 108,000 98,000 88,000 78,000 68,000 58,000 48,000 38,000 Mar14 Sep14 Mar15 Sep15 Mar16 Date Recommendation 12m target price 2014-03-24 BUY 76,000 2014-04-16 BUY 80,000 (Up) 2014-04-25 BUY 80,000 2014-06-16 HOLD (Change) 64,000 (Down) 2014-07-18 HOLD 64,000 2014-07-29 HOLD 64,000 2014-08-14 HOLD 64,000 2014-08-25 HOLD 54,000 (Down) 2014-10-01 HOLD 54,000 2014-10-29 BUY (Change) 59,000 (Up) 2014-11-10 BUY 59,000 2014-11-26 BUY 71,000 (Up) 2014-12-08 BUY 71,000 2015-02-02 BUY 91,000 (Up) 2015-03-16 BUY 98,000 (Up) 2015-04-09 BUY 98,000 2015-05-20 BUY 98,000 2015-06-01 BUY 98,000 2015-07-07 BUY 68,000 (Down) 2015-07-29 BUY 68,000 2015-08-28 BUY 68,000 2015-10-07 HOLD (Change) 56,000 (Down) 2015-10-30 HOLD 56,000 2016-01-12 HOLD 56,000 2016-02-01 HOLD 56,000 2016-03-21 HOLD 56,000 2016-03-21 HOLD 56,000 34

, Analyst, 3774 3831, jinho.cho@miraeasset.com (KRW) Stock Price Target Price 155,000 145,000 135,000 125,000 115,000 105,000 95,000 85,000 75,000 Mar14 Sep14 Mar15 Sep15 Mar16 Date Recommendation 12m target price 2014-04-03 HOLD 83,000 2014-04-30 HOLD 105,000 (Up) 2014-06-23 HOLD 105,000 2014-07-18 HOLD 105,000 2014-07-24 HOLD 105,000 2014-10-07 BUY (Change) 140,000 (Up) 2014-10-30 BUY 140,000 2014-12-15 BUY 140,000 2015-01-28 BUY 130,000 (Down) 2015-04-09 BUY 130,000 2015-07-07 BUY 130,000 2015-07-27 BUY 130,000 2015-10-14 BUY 130,000 2015-10-28 BUY 130,000 2015-12-21 BUY 130,000 2016-01-26 BUY 130,000 2016-03-21 BUY 130,000 (KRW) Stock Price Target Price 60,000 55,000 50,000 45,000 40,000 35,000 30,000 25,000 20,000 Mar14 Sep14 Mar15 Sep15 Mar16 Date Recommendation 12m target price 2014-04-17 BUY 38,000 2014-05-19 BUY 38,000 2014-05-26 BUY 38,000 2014-06-27 BUY 31,000 (Down) 2014-07-18 BUY 28,000 (Down) 2014-09-01 BUY 28,000 2014-10-08 BUY 28,000 2014-12-01 BUY 28,000 2014-12-18 BUY 34,000 (Up) 2015-01-23 BUY 38,000 (Up) 2015-03-03 BUY 41,000 (Up) 2015-04-09 BUY 41,000 2015-10-07 BUY 54,000 (Up) 2015-10-21 BUY 54,000 2015-11-11 BUY 54,000 2015-12-21 BUY 54,000 2016-01-14 BUY 54,000 2016-01-15 BUY 54,000 2016-03-21 BUY 54,000 35