mas q3 fy2006 ndr investor...

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MIRAE ASSET SECURITIESInvestor Presentation

January 2007

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This presentation may contain forward-looking statements about Mirae Asset Securities and unaudited preliminary figures internally collected as of December 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.

DISCLAIMER

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Corporate Overview

Financial Highlights

Operational Performance

Growth Strategy

TABLE OF CONTENTS

I

II

III

IV

4

I. Corporate OverviewII. Executive ManagementIII. Group Structure

- Positioning- Synergy Creation- Fund Performance

CORPORATE OVERVIEW

5

I. Corporate Overview

Mirae AssetCapital

41%

Overseas Investor14%

ESOP3%

Related Party2%

(As of December end 2006)

Local Investors40%

Network

73 local branches

Our shareholders

No. of Employees

Approx. 1,000

Market Cap

Approx. USD 2 bn

Credit Rating

February 15, 2006

Establishment

Commercial Paper: A2

December 2, 1999

March

Date of Listing

Fiscal Year

6

Korea’s firstmutual fund

First wrap account& installment-type

investment

First real estate fund&PEF

First int'l asset management

company

First int'l investment fund

First Retirement Annuity Institute

1998 20042001 2005

Create the marketfor installment fundsCreate the market

for installment fundsOpened the era of

indirect investmentOpened the era of

indirect investment

Installmentfund

Installmentfund

Mutualfund

Mutualfund

VariableinsuranceVariable

insurance

CorporatePension

CorporatePension

Real estatefund

Real estatefund

PEFPEF

Int'l investmentfund

Int'l investmentfund

Wrapaccount

Wrapaccount

Leading alternative investment market Leading alternative investment market

Innovator in Korean Capital Market as MAS led the capital market in Korea thru "First-See" & "First-In“ strategy

2006

First Biz Unit SystemFirst Simultaneous Nationwide Branch Investment Seminar


7

Each year MAS is recognized as an industry leader in both the services we provide our clients and the innovations that have led the financial industry in Korea

Aug 2006Korea Finance Culture, Customer Satisfaction (Installment-type fund)Asia Economy

Apr 2006Marketing Grand Prize for “Total Asset Management”The Korea Economic Daily

Jan 2006 DASAN Finance AwardThe Korea Economic Daily

Dec 20052005 IPO Excellence Korea Exchange

Dec 20042004 IPO Excellence KOSDAQ Committee

Nov 20051st. Weekly Distinguished AwardKorea Securities Dealers Association (KSDA)

Apr 2004 2004 Best IB-IPO UnderwriterKOSDAQ Committee

Jan 2002Foreign Capital Attraction AwardMinistry of Commerce, Industry and Energy (MoCIE)

Dec 2006 ‘Korea’s Most Trusted Company Award”

Korea Economic DailyKorea Chamber of Commerce


8

II. Executive Management – ‘Back to the basics’

Woong Kee ChoRepresentativeInstitutional Capital MarketBusiness Unit Experience : 16

The executive management were at the center of MAS becoming the leading Korean provider of comprehensive asset management and brokerage services achieving the status of a truly world-class financial company

Hyun Ju ParkChairmanMirae Asset GroupExperience : 23

Hyun Man ChoiPresident & CEOMirae Asset SecuritiesExperience : 18

Koo Bum LeeRepresentative IB Business UnitExperience : 20

Yoo Suk SeoRepresentativeRetail Business UnitExperience : 19

Byung Yoon KimRepresentative Management Support Business UnitExperience : 18

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III. Group Structure - Positioning

Within in 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 asset management arm

Financial GroupFinancial Group Mirae AssetMaps Invest.

Mgmt.

Mirae AssetInvestment

Management

Mirae AssetGlobal Invest.Mgmt. (Asia)(Singapore)

Mirae AssetGlobal Invest.Management(Hong Kong)

Asset Management Arm

Mirae AssetSecurities

Mirae Asset Life Insurance

Mirae Asset Capital

Mirae AssetVenture

InvestmentInvestment Arm

MAS HK

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III. Group Structure – Synergy Creation

Mirae Asset Capital,

PEF

Mirae Asset Capital,

PEF

Mirae AssetInvestment Mgt.

Affiliates

Mirae AssetInvestment Mgt.

Affiliates

Mirae AssetSecurities

Excellent Management Skill► Dominance in equity fund market► Brand Power► Source of stable brokerage revenue

- Captive for equity transaction (50% rule)

Growth of variable insurance market► Increasing brokerage transaction

Pursue organic business► Synergy for corporate pension & IB Biz► Support capital loan during big deal

M&A Collaboration► Share information and perform joint projects

Pre–IPO business► Venture Investment company’s IPO

Mirae AssetLife InsuranceMirae Asset

Life Insurance

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Mirae Asset investment arm continues to lead the indirect investment market with superior fund performance and 9% M/S within industry (33% M/S for equity-type fund)

(KrW Trillion)

Source: AMAK

0.08 0.3

11.9

2.1

0.90.6

15.2

-

10

20

30

40

50

Mar '01

Mar '02

Mar '03

Mar '04

Mar '05

Mar '06

Dec '06

Total Equity-type MarketMAG

Equity Fund Mkt.

(KrW Trillion)

Indirect Investment Mkt.

Source: AMAK

22.2

1.6

3.2

17.3

8.8

6.85.4

150

175

200

225

250

Mar '01

Mar '02

Mar '03

Mar '04

Mar '05

Mar'06

Dec '06

Total MarketMAG 11

313

No. of Eq.Fund

+41%+43%+61%

Vs. BM

PCA Mgmt.3KTB Mgmt.2

Mirae Asset1

CompanyRank

Equity Fund Return (Oct ’03 ~ Oct ’06)

(KrW)

2,000

4,000

6,000

Feb ‘02 Feb ‘04 Oct ‘06

439%

127%

+312%

Independence Equity fundKOSPI Index

Source : Zeroin

III. Group Structure – Fund Performance

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I. Diversified Revenue StructureII. Above Industry ReturnIII. Operational Stability and Growth

FINANCIAL HIGHLIGHTS

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I. Diversified Revenue Structure

MAS Peer Group

Source: Peer group includes industry top 4 brokers (Net Revenue = Operating Income – Operating Expenses excl. G&A expenses)

Brokerage

Investment Banking- Underwriting & IPO- Prop. trading- Fixed income securities- Principal Investment

Asset Management- Beneficiary certificates- Wrap account- Bancassurance

Interest Profit & Other19%

21%

30%

30%

29%

13%

50%

7%

MAS continuously maintains advanced and balanced revenue structure with comparatively high revenue proportion from asset management and a solid track record from investment banking

Net Revenue Comparison (Apr ~ Nov 2006)

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Source: FSS, MAS

(In %)

ROE (MAS vs. Peer)

11.4

13.6

27.1

20.9

12.5

23.6

FY05

8.9

12.9

18.5

13.6

11.3

18.8

1HFY06

3.25.83.4D2

3.5

-5.3

-4.8

3.7

9.5

FY02

0.3

11.4

-16.3

5.9

21.2

FY03

2.5

-11.7

4.6

1.9

13.3

FY04

MAS

S

H

D1

W

ROE

II. Above Industry Return

ROE (MAS vs. Industry)

MAS

Industry

9.5

-4.4

20.3

13.0

8.7

0.3

FY 02 FY 03 FY 04 FY05 1H FY06

21.2

13.3

23.6

18.8

MAS continuously generated high profits compared to 5 major securities firms

Source: FSS, Annualized ROE of top 5 brokers for 1H FY06

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III. Operational Stability & Growth

Operating Income Operating Profit Margin

(KrW billion)CAGR (’00 ~ ’05) : 33.3% (In %)

Source: FSSSource: MAS

103224 264 294 273

432 439

FY00 FY01 FY02 FY03 FY04 FY05 Q1-Q3 FY06 (20)

(10)0

102030

FY00 FY01 FY02 FY03 FY04 FY05

HW

MAS

D1S

32%

9%15% 13%

22% 19%

Net Income EPS Growth

CAGR (’00 ~ ’05) : 40.4%

Source: MAS

17 14 1744 31

92 82

FY00 FY01 FY02 FY03 FY04 FY05 Q1-Q3 FY06 (2)

(1)01234

FY00 FY01 FY02 FY03 FY04 FY05

WH D1S

(KrW K)

Source: FSS

(KrW billion)MAS

In addition to high profitability, MAS is increasing the scale of operating income and net come year after year

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Installment Fund Balance

Mirae Asset Securities holds more than 257K installment-type fund accounts, constituting approximately 19% M/S within securities industry

Source: AMAK (As of Nov ‘06)

Balance of Ins-Type within total Funds

5

10

15

H S D1 W-

14%14%

MAS

Source: AMAK (As of Nov ‘06)

(In KrW billion)

1,2191,219

897

280335

4.4X

354

S W H D1 MAS

M/S in no. of Ins Accounts

Source: AMAK

(In million accounts)Total Market incl. Banks (LHS)MAS M/S (RHS)

-

1

2

3

4

5

6

7

8

Mar '05

Jun '05

Sep '05

Dec '05

Mar '06

Jun '06

Sep '06

Nov '06

2.5%

3.0%

3.5%

4.0%

III. Operational Stability & Growth

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I. Operational Performance- Asset Management- Brokerage - Investment Banking

OPERATIONAL PERFORMANCE

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MAS is the no. 1 seller of lucrative equity-type fund with 5.3 KrW trillion in balance and 42% M/S within industry

I. Operational Performance - Asset Management

(In KrW billion)

Others

MMF

Hybrid

Bond-type

Domestic equity-type

Overseas equity-type

Equity-type Proportion

Source: MAS

24% 25% 33% 39% 49% 53% 54%

244 266 394 524 1,022 1,406 1,558 2,074874 1,113 1,5382,048

2,7992,984 3,119

3,223

971 1,0651,170

1,043

951955 1,038

935

9001,096

795785

8291,016 956

1,115

1,2601,337

1,514 1,137

1,126814 669

388

452554

5131,029

1,0841,138 1,320

2,179

Mar ‘05 Jun ‘05 Sep ‘05 Dec ‘05 Mar ‘06 Jun ‘06 Sep ‘06 Dec '06

4,7005,430

5,9236,565

7,8118,312 8,659 22%

4%

11%

9%

33%

21%

9,914

54%

Other : PEF, REIT etc.

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Portion of lucrative equity-type funds continues to increase recording 31% M/Swithin securities industry

MAS vs. Ind. Equity Portion

Source: AMAK

MASIndustry

Mar ’03 Mar ’04 Mar ’05 Dec ’06

54%

7% 6%4%

11%

3% 6%

17%

MAS vs. Peer Equity Portion

(In billion KrW)

Source: MAS

Mar ’03

Mar ’04

Mar ’05

Mar ’06

Dec ’06

5,297

591 6711,118

3,821

9X

MAS Equity Funds Sales

I. Operational Performance - Asset Management

Source: AMAK (As of Oct ‘06)

S D2 W D1 H

5,245

MAS

2,454

1,845 872

518599

2X

10X

(In billion KrW)

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Source: MAS, data from each company

MAS vs. Peer M/S (Q306)

In addition to having the dominant position in financial product sales, equity brokerage M/S recovered 7.2% along with higher portion of commissions being generated from institutions (Institutionalization)

MAS

7.2%

7.9%

6.8%6.7%

WH S D1

7.0%

I. Operational Performance - Brokerage

MAS Equity Brokerage M/S

Source: MAS

Brokerage Breakdown

Source: MAS

5.7

8.18.4

8.2

7.2

6.6

5.85.9

6.9

7.27.1

FY2004Q1Q2Q3Q4

FY2005Q1Q2Q3Q4

FY2006Q1Q2Q3

Offline (Ins.)

Offline (Retail)

Online (Retail)

Trading ValueQ1 '06 Q3 ‘06 Q1 ‘06 Q3 ‘06

Commissions

82 80

32

1815

45

1511

4437

48

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SF Performance

MAS lead Korea’s Financial market thru development of alternative investment products and has extensive knowledge and expertise in IPO and selling structured finance related products

I. Operational Performance - Investment Banking

ABCP

ABS

3,5605ABCP

1,7503ABS

14,24020

11,21814Real

EstateDev.

AmtNo. of Issue

Product(Mar ‘05 ~ Dec ’06)

Alternative Investments

2801Floating Capital Related

801Korean Beef Cattle Fund

1,3556Vessel Fund

1,4391School BTL

AmtNo. of Issue

Product(Sep ‘05 ~ Nov ‘06)

※Oil Fund, Mineral Fund, Solar Heat Fund, Art Fund, and Wind Power Plant Fundunder consideration

1,162Giga Telecom & other 92003

793Korea Ratings & other 52002

661Core Logic &

other 52004

1,139Dom & other 72005

784Pyungsan & other 22006

AmtNo. of IPOsYear

(In 100 million KrW)

IPO Performance

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IPO Share Performance

KB41NA

DY52DiBoss Co.

MAS52iMBC Co.

K47SNU Precision

MAS56Able C&C

MAS45Seo San Co.

D240BIEMT Co.

KB33Havit Information Co.

MAS36iCRAFT Co.

K37Innowireless Co.

UnderwriterGain (%)1H ’05

Top 10 Performers

-50

-40

-30

-20

-10

0D2 D1 W K MAS BM

2006 Share Performance*

6214.9%10D13

2710.4%7K4

7.5%

16.4%

16.4%

M/S

17 5H5

5111K2

5611MAS1

Fees(KrW bn)

No. ofIPOs

LeadManagerNo.

Source: S-IPO

KOSDAQ IPO M/S (2005)IPO Share Performance

(In %)

Source: Bloomberg *Average of all IPO shares issued

In order to compete with foreign investment bankers, MAS focused on building reputation by underwriting good quality companies and its outcome is reflected in our KOSDAQ IPO market share

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OTC PerformancePEF Performance DLS Performance

Source: FSS(In 100 million KrW)

90417ELW

6,291110Total

65013DLS

4,73180ELS

AmtNo. of Issue

Derivative Offerings

7,910

6,110

400

1,400

Amt

Sep ‘06Mirae Asset Partners 3

Total

Sep ‘05Mirae Asset Partners 2

Dec ‘04Mirae Asset Partners 1

Date ofIssue

PEFOfferings

MAS is leading the PEF industry with 46% M/S since the company’s first industry offering in Dec ’04. This success is continued with OTC derivative products with 67% M/S in public DLS placements since regulatory approval in March of ’06

S D1 W MAS H

650

271

400

620

1,193

(In 100 million KrW)

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I. Changing Market EnvironmentII. Strategy in Fund MarketIII. Future Growth DriversIV. Network ExpansionV. Corporate PensionVI. Investment Summary

LONG-TERM GROWTH STRATEGY

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I. Changing Market Environment

Bank

Integration

Under

CMISA

Insurance

BankSecurities

Futures

Asset Mgmt & Other

Insurance

Derivatives, FX Etc

Regulatory Changes (IB at center)

Individual : Direct Indirect Market

Investors’ preference is shifting from bank deposit’s to equity and from direct equity market to indirect investments. With upcoming regulatory changes, this trend is expected to accelerate

20032006

Shift in Household Asset

0

20

40

60

Bank Savings Equity FI Insurance Other

Source: Korea Bank

- Standardized product Customized prod/Services ☞ Importance of ability to design new products and

offer consulting services

1. Asset/Wealth Management

- Agent/Broker Principal

2. Investment Banking6

16

26

36

46

56

Jan ‘03 Jan ‘04 Jan ‘05 Jan ‘06 Jan ‘07

(4)(2)0246

Equity-Type Fund (LHS)Net Inflow (RHS)

-5T

(In KrW trillion)

+35T

Source: AMAK, MAS Research

(In %)

26

Source: AMAK

12

0.6

Mar ‘03 Dec ‘06

Total equity fund market

MAS equity-type funds balance

(In KrW trillion)

5.3

I. Strategy in Fund Market

Capital inflow to equity-type financial products is accelerating and MAS is well positioned to grasp future growth

47

2010

4X

9X

Installment funds

Aging population

Corporate Pension

Variable insurance

Globalization

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II. Future Growth Drivers

As of March end

0.5Wrap1.4Others

8.7Fund Product

Financial Product3.2Investment Advisory0.6Trust

23.1Total

8.1Deposit Asset0.6Shareholder equity

BalanceItemNo.

As of September end

Financial productDeposit assetShareholder Equity

3.6 6.5 5.6 7.9 11

2026

3237

4350

‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11

(KrW trillion)

To accomplish our long-term goal to reach “KrW 50 trillion of AUM by 2011”, MAS is focusing on expanding our “Total Asset Management Consulting” model, strengthening globalization and by expanding IB business locally and in overseas market

Asset Under Management Future Growth Drivers and Vision

CMA & SF product line-up

Corporate Pension

Wrap/Trust/Advisory products

Expand client assets to overseas equity-type fund

Expand global network in Hong Kong, China, Vietnam & India

Continue our success in Korea (PF, SF) to overseas

Strengthen principal IB function with increased equity capital

Increase proprietary trading

1. Expand Total Asset Management Consulting

2. Strengthen Globalization

3. Expand IB Business

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In order to leverage the current and upcoming business environment and regulatory changes, MAS is planning to expand its current 73 branch network to 150 within the next couple years

III.Network Expansion

MAS Network Expansion Plan

No. of EmployeesNo. of Branch Network

- CMISA : Opportunity due to regulatory changes(Enlargement of scale)

Environmental Changes

- Wider recognition and inflow of funds to indirect investments (IRAs, corporate pension, VUL etc)

- Effective means to transfer commercial banks’deposits (Demand Deposit KrW 162 T as of July ’06)

1. Capital Market and Investment Services Act

2. Investment Asset

3. Introduction of CMA

As of March end

8

66

EF/B

1,061

71

BranchEq. Fund

8,832

4,717

21,162

8,662 122MAS

20KB

AF/BAll FundAs of Oct ‘06

(In KrW Billion)

379887 1,0001,1001,1501,2001,250

533 594 603 667

25 28 35 35 4669

80100

120140 150

'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11

8X 6X

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MAS’s M/S in the securities industry corporate pension segment is already 18%, well positioned to grasp future growth leveraging Mirae Asset’s brand power

IV.Corporate Pension

Corporate Pension Market Outlook MAS M/S in Corporate Pension (CY2006)

Source: Korea Securities Dealers AssociationBased on 20% conversion in 2006 to reach 70% by 2015Source: MAS

7% growth assumption5% growth assumption

40

80

120

160

2007 2008 2009 2010 2015-

144133

4442

(In KrW billion) (In KrW trillion)

Pension Market (LHS)MAS M/S (RHS)

-

2,500

5,000

7,500

10,000

Jan '06 Mar '06 Jun '06 Sep '06 Dec '06

0%

1%

2%

3%

4%

5%

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V. Investment Summary

Our strategy & track record- Chairman Park & CEO Choi

(1st gen. founder, knowledge/experience, dynamic mgmt. style, and youth)

Our positioning within the group and synergy creation

Our key differentiation-Revenue structure that is diversified, stable and growing

Growth Prospects- Asset management (Expand CMA, overseas equity-type fund and network)- Investment banking (Expand IB biz to Hong Kong, China, Vietnam & India)- Corporate pension (Cost center Profit center)

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THANK YOU

For more information, please contact [email protected] or visit www.miraeasset.com.

Q & A

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I. Income StatementII. Balance Sheet

APPENDIX

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I. Income Statement

[KrW million]

Items Q3 FY2006 Q2 FY2006 Q1 FY2006 FY2005 FY2004 FY2003

Operating Income 186,230 123,062 132,736 432,134 272,842 293,905

A. Commissions Received 63,916 59,564 62,826 234,076 106,181 105,033

1) Brokerage commission 27,152 25,811 31,083 142,433 74,497 77,945

2) Underwriting commission 760 4,468 844 9,702 5,094 5,845

3) Brokerage Commission on beneficiary certificates 23,673 17,217 22,431 56,883 12,221 9,622

4) Commission from Wrap account & asset management 1,955 1,857 1,956 5,143 1,736 350

5) Others 10,376 14,145 6,512 19,915 12,633 11,271

B. Interest Income 18,835 15,754 12,035 48,796 19,184 21,844

C. Dividends Income 36 38 70 223 158 865

D. Distribution Income - 75 162 160 224 415

E. Gain on Sales of Trading Securities 8,540 9,147 14,261 45,806 36,088 23,347

F. Gain on Valuation of Trading Securities 7,251 (83) 2,141 1,422 1,522 80

G. Gain on Valuation of Deposits 5,622 5,647 6,077 18,384 12,705 14,479

H. Gain on Derivatives Transactions 14,548 14,985 20,492 83,180 96,780 127,836

I. Others 67,482 17,935 14,672 86 2 6

Operating Expenses 143,038 86,058 100,636 294,587 220,354 229,885

A. Other Operating Expenses 101,621 44,302 59,736 146,206 121,134 128,199 B. G&A Expenses 41,417 41,756 40,900 148,381 99,220 101,686

Net Revenue (Operating Profit + G&A Expenses) 84,609 78,760 73,000 285,928 151,708 165,706

Operating Profit 43,192 37,004 32,100 137,546 52,488 64,020

Net Profit (Before Tax) 43,873 36,634 32,429 128,349 46,570 63,261

Net Income (After Tax) 32,085 26,569 23,343 91,527 31,261 43,662

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II. Balance Sheet

[KrW million]

Items Q3 FY2006 Q2 FY2006 Q1 FY2006 FY2005 FY2004 FY2003

Total Assets 3,309,592 2,749,859 2,476,218 1,509,682 824,258 704,979

Ⅰ. Current Assets 3,138,736 2,588,435 2,315,391 1,373,547 677,867 602,121

Ⅱ. Fixed Assets 170,856 161,424 160,827 136,134 146,391 102,858

Total Liabilities 2,724,926 2,196,809 1,949,424 979,442 578,715 481,301

Ⅰ. Current Liabilities 2,722,839 2,195,418 1,947,671 978,066 577,790 480,623

Ⅱ. Long-term Liabilities 2,087 1,391 1,753 1,377 926 678

Total Shareholder's Equity 584,666 553,050 526,793 530,239 245,542 223,678

I. Stockholder's Equity 134,925 134,925 134,925 134,750 112,800 112,800

II. Capital Surplus 213,133 213,134 213,133 213,032 35,721 35,721

III. Retained Earnings 237,418 205,502 178,932 182,539 98,908 76,685

IⅤ. Capital Adjustment (810) (511) (197) (81) (1,887) (1,528)

Total Liabilities & Stockholder's Equity 3,309,592 2,749,859 2,476,217 1,509,682 824,258 704,979

mas q3 fy2006 ndr investor...

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