mirae asset lens q1 2014 mirae asset mirae asset quarterly ... · 1) open marketplace. a more level...

Mirae Asset Quarterly Newsletter from the Investment TeamWelcome to Mirae Asset Lens, a quarterly newsletter by the investment team to share our

knowledge and thoughts. The Mirae Asset Investment team strives hard to identify highly

competitive business models with talented management teams. These are companies

capable of compounding value year after year; as they invest in their “moat-like” businesses

– a business that has a sustainable competitive advantage which enables it to maintain or

gain market share over time and achieve superior returns. We endeavor to look beyond

the obvious, analyze things differently, while identifying trends and companies before they

become market favorites. Our on-site visits provide us with the opportunity to take a deep

dive into our core holdings as well as provide a valuable insight into the minds of consumers.

This newsletter aims to highlight a small sample of our team efforts in Asia. We hope you

enjoy reading it as much as we enjoyed researching and writing it!

Chindonesia at a Crossroads

For the developed markets, 2013 has been more of a story of monetary easing – how much

more, less, and how long. In contrast, this year has marked the beginning of change or the

possibility of major change in China, India, and Indonesia. China, India, and Indonesia, with a

combined population of 2.8 billion—nearly 40% of the world’s total population— all need to

adjust to deliver strong steady growth in the coming years.

China, being a current account surplus nation, was not impacted by tapering fears but still

faces the challenge of rebalancing from the credit-fuelled, investment-led growth model.

With President Xi and Premier Li in command for the last 12 months, expectations ran high

ahead of the Third Plenum in November. We believe that the overall direction of the reforms

towards the easing of bureaucratic controls will improve market access, the move of the

Judiciary becoming increasingly linked to the central government and distancing from local

governments, as well as the easing of the “Single Child Policy” to all represent positive

signals. India and Indonesia will hold elections this year, and have different issues to address,

mostly in the form of reducing bureaucracy and making infrastructure improvements, all with

the goal of raising productivity for the longer term.

In this edition of Mirae Asset Lens, we aim to give you a sample of our views on these

reforms or potential reforms, coupled with our on-the-ground research to understand the

current state of affairs and how these reforms may impact the status quo.

Contributors

Mirae Asset Global Investments (HK)

Asia Pacific Investment/Research Team

Rahul Chadha

Co-Chief Investment Officer

David Glickman

Head of AP Research

Element Sun

Investment Analyst

Joao Cesar

Investment Analyst

Q1 2014

MIRAE ASSET LENS

1

MIRAE ASSET LENS Q1 2014

China’s 3rd Plenary Reform: What will this mean for China?

In November 2013, China began to release details of reforms that were finalized at the Third

Plenary Session, which is the Chinese government meeting that sets the tone and direction

of the country for the next decade. Headlines around the world flashed that China was going

to give the market a more significant role in the economy. But what are the finer details, how

will this work, and how will it be implemented? Furthermore, how do we believe this alters our

investment view?

We have been of the view for a long time that China was misallocating capital and labor, and

adjusting the flow of each lever would help to improve productivity, profitability, and growth.

Broadly speaking, the heart of the reforms attempt to tackle this misallocation. The four key

reforms are as follows:

1) Open Marketplace A more level playing field where public and private enterprise may compete. Currently, state-owned enterprise (SOE) banks are enjoying margins that are too high, and simply lend

heavily to SOE companies at low rates, enabling capital to flow cheaply to inefficient companies and

industries. The announced reform measures seek to liberalize the interest rate and foster the establishment

of more privately held banks, which can compete to lower the cost of capital for strong private companies

and raise the cost of capital for overleveraged, inefficient SOE companies.

Administratively, the government seeks to be more investment friendly by streamlining approvals and

opening more areas up for investment and competition. Private companies will be able to participate more

alongside the public sector and SOEs to drive efficiency.

In the same vein, market-based solutions will be used for environmental protection, such as mandating

more pollution controls on polluting industries, and market based pricing systems for water, oil, natural

gas, and electricity.

2) SOEs Reforms Incentives to align management performance and stakeholder value.

Members of the Chinese government intensively studied their own large SOE companies, Huawei,

and successful multinational companies, such as GE and IBM. They realized glaring differences in the

incentives of the employees and thus the global competitiveness of these companies. Currently, the

management of SOE companies does not own shares or stock option plans, but are rather paid a

Third Plenary Session; November 15, 2013, courtesy of Yahoo News, November 15th, 2013

We have been of the view for a long

time that China was misallocating

capital and labor, and adjusting the flow

of each lever would help to improve

productivity, profitability, and growth.

2


relatively low salary, prompting some to figure out ways to profit from the company, such as what we have

seen in the investigation of some former managers of PetroChina. The government has realized that by

paying competitive wages to top managers, along with the granting of stock options, these managers can

then work to drive shareholder value instead of acting with little or no corporate governance.

SOEs and private companies will also be able to compete with each other more directly in the marketplace,

as more areas will be unburdened by reduced red tape. This competition should be beneficial, as SOEs

will have to innovate and reinvent themselves to stay competitive, while private companies will have more

opportunity than in the past.

3) Rural Land Reforms Hukou household registration system to modernize.

The current hukou system, which divides people between urban and rural residents, was designed to limit

the number of inhabitants in cities. When China opened up three decades ago and people migrated from

rural to urban areas, it was of great economic benefit to them and to China, but this migration has run its

course and has reached a critical bottleneck – namely the existence of the hukou system, which limits

the ability of a migrant worker to buy an apartment and receive urban benefits such as healthcare and

schooling. Furthermore, the rural farmer is unable to monetize his land, as it is technically a collective that

can only be bought by the government. With this new reform, China looks to enable that farmer to sell or

lease his/her land to others to capture the economic value. The entire hukou system looks like it will be

reformed over time, starting with some pilot projects in a few cities. The goal of a freer flow of capital and

labor is clear and this is a big step in the right direction.

The positives of rural land reform are obvious: increased mobility of labor, a wealthier former farmer who

is able to spend more and larger plots of agricultural land that can benefit from more mechanized, large

scale farming techniques. On the other hand, this reform will limit the local governments’ profits and further

pressure them, leaving them to fill the gap with other reforms, such as local government bond issuance,

property tax collections, and a fairer balance of tax revenue to the central and local governments.

4) Financial Reforms The renminbi aims to eventually become a world reserve currency.

Regarding liberalizing the capital account, we expect a further relaxation of the Qualified Domestic

Institutional Investor and Qualified Foreign Institutional Investor (QDII and QFII, respectively) quota systems.

In addition, individuals and companies will be able to more freely convert currencies within higher annual

limits; in 3 to 5 years, basic RMB convertibility should then be achieved. To facilitate this process, the new

Shanghai Free Trade Zone and the Shenzhen Qianhai Zone will serve as pilot areas for these initiatives.

The longer term aim of the government is for the RMB to be considered eligible as a reserve currency,

alongside the greenback and pound sterling. We believe that this will take at least a decade, as even the

Yen accounts for less than 5% of the global FX reserves. We believe that the government’s objective for

the RMB to become a global reserve currency pushes the government in the right direction of capital

account and currency reforms.

We believe that the reform process will present many investment opportunities in the areas of

financial services, environmental protection, SOEs that are willing to work harder for minority

shareholders, private companies suffering from a high cost of capital, and the consumer

sector. These reforms should unlock productivity and serve to begin rebalancing the

economy away from investment-led growth towards a consumption economy. As President

Xi has consolidated his power and is increasingly gaining support among government officials

as well as the public, we believe that China should be headed in the right direction over the

next decade and present us with many exciting investment opportunities.

3


India & Indonesia: On the ground during tougher, yet hopeful times

We visited both India & Indonesia in recent months, and found that the mood was somber.

The reality that officials cannot take for granted the high GDP growth rates of the last decade

is starting to set in. Policymakers have now largely accepted that consumption-led growth

fuelled by imports and financed by capital flows was an unsustainable model. For the longer

term good, the building blocks of domestic infrastructure and manufacturing competitiveness

are imperative.

India

In the near term, the stability of the currency is a priority with the RBI (Reserve Bank of India)

raising dollar deposits, hiking interest rates to slow the domestic economy, and encouraging

growth of exports through 10-15% currency depreciation. The trade deficit, which was at

USD 15-17 billion per month earlier this year has come down to USD 8-10 billion per month

in recent months—a gap which is easily financed by software exports and remittances from

non-resident Indians.

Mixed business and social class sentiment

The business mood has somewhat improved from extreme pessimism in July, as strong

export orders feed through the economy. The urban middle class still remains pressured by

high inflation and low salary growth. However, the rural population, which makes up nearly

60% of the total population, remains resilient on the back of good monsoons, improved road

connectivity, and high value agriculture outputs.

In the run up to the general elections in April 2014, the whole nation is focused on the key

opposition contender, Mr. Narendra Modi, Chief Minister of Gujarat, one of the fastest

growing and most business friendly states in the country, as a beacon of hope for getting the

“Growth Mojo” back into the economy. The restless Indian youth, numbering 150 million new

voters (aged 18 or above) in 2014, are further driving the need for a government which goes

beyond subsidies and handouts to sustainable development and good governance.

Corporate focus on efficiencies

Our interactions with companies across sectors indicated that though they are dismayed by

state of the country, they were focused on improving their product portfolios, implementing

cost control, expanding distribution reach and optimizing inventory management. Our travel

to cities of Delhi, Mumbai, and Bangalore highlighted the different moods. In Delhi, auto

companies like Maruti Suzuki and Hero Motor Corp shared a common theme of strong

rural demand making up for weak urban consumer, while both continued to cut costs

through vendor efficiencies and increasing the proportion of components produced locally.

Mumbai, the financial capital, reflected the downbeat mood of the banks in light of currency

Our interactions with companies

across sectors indicated that though

they are dismayed by state of the

country, they were focused on

improving their product portfolios,

implementing cost control, expanding

distribution reach and optimizing

inventory management.

4


depreciation and the policy bottlenecks for infrastructure projects. Finally, Bangalore, India’s IT

export hub is shining with new real estate project launches and jewelry showrooms budding

up all over the city. With US outsourcing demand improving, the outlook from technology

companies in Bangalore was positive.

Our most interesting meeting was with Mr. Narayan Murthy, Founder & Chairman of Infosys.

This was one of his first interactions with investors since his return to the company. He

presented us with an honest admission of what went wrong over the last two years as

Infosys—the industry bellwether—lagged peers in growth and profitability. The meeting

provided a useful insight into how good companies sometimes lose their way, but an inner

strength remains in their ability to quickly rectifying the shortcomings. In their case, the detour

was simply letting go of large outsourcing deals during 2010-12 and to improvise project

delivery tools to execute them profitably.

Short-term pain for long-term gain

On the macro policy front, a pragmatic approach by the new RBI Governor, Mr. Raghuram

Rajan, to focus on inflation control while sacrificing near term growth should provide a much

needed stabilization window for the economy to regain its competitiveness. Since 2011,

India has also witnessed a policy paralysis due to the Supreme Court, apex judicial body,

continuously revisiting the Executive branch’s legacy policy decisions, as well as media

and environmental activism challenging business, creating a stalemate instead of mutually

agreeable solutions. We believe that new leadership in India in 2014 would bring a practical

insight into these critical issues of balancing growth with the social good, a challenge faced

by all emerging markets.

Evolving local tastes

Meanwhile, the Indian consumers’ tastes and preferences are catching up fast with global

peers, as shown in our pictures of Orion Choco Pies in a Mumbai hypermarket and Hamleys’s

store in a suburban Mumbai mall.

Reliance Hypermarket, in the suburbs of Mumbai Hamleys, Phoenix Mall, Kurla, Mumbai

5


Indonesia

The India trip was followed by a visit to Jakarta, providing an opportunity to meet with key

policymakers, management of companies, and to observe consumer behavior. The trip got

off to a positive start, with the policymakers going beyond the usual pitch of “the long term

demographic opportunity in Indonesia” to being more mindful of the near term challenges.

A number of these challenges emerged because policymakers basked in the glory of high

growth rates of 2010-12 without enhancing the overall competitiveness of the economy.

What is needed, and what is starting to happen, is a two-pronged approach where the

government focuses on boosting non-resource exports, provides better training for the

workforce, and encourages foreign direct investment in the medium term, while the Central

Bank raises interest rates to slow domestic demand and allow for a market-determined level

for the currency.

Demographics and consumption remain favorable

Market research agency Nielsen highlighted that longer term consumption trends are fairly

positive with the Indonesian middle class likely to triple to 200 million people by 2020. The

Indonesian consumer, along with their Indian and Filipino peers, ranked amongst the world’s

most confident consumers with holiday, entertainment, smartphone, and tablet purchases as

significant categories of expenditure.

There was a distinctly more somber tone in the corporate outlook with banks like Mandiri

and Rakyat talking of 15-17% credit growth instead of the 20-23% growth they have seen

in recent years. Semen Gresik alluded to a more moderate level of cement industry growth

at about 6% and Bumi Sepong, a developer, guiding towards slower demand with a skew

towards smaller ticket size apartments.

We traveled around Jakarta visiting Matahari, Uniqlo, H&M, and 7-11 outlets. Matahari’s outlet

in the upscale South Jakarta neighborhood of Clandik Town square was impacted in recent

year because of new mall openings in the vicinity. Same store sales growth at the store this

year was only 4%, with shoes and apparel growing in excess of 10% while home, cosmetics,

and intimate wear lagged. A notable highlight in the outlet was the high proportion of private

label brands like Nevada, Connexions, and Fladeo represented 35% of merchandise across

key categories of footwear and apparel. The quality in the high margin private label portfolio

was good and priced reasonably, at about US $20 for pair of ladies shoes. The store

manager was fairly knowledgeable and highlighted the store’s quick response by discounting

slow moving merchandise, and replacing the consignee if there is no improvement.

The India trip was followed by a visit

to Jakarta, providing an opportunity

to meet with key policymakers,

management of companies, and to

observe consumer behavior.

6


Matahari store in South Jakarta highlighting some of their private label brands

Our interaction with Ace Hardware gave us a useful insight into how during the boom times

of 2010-2012, companies overextended themselves by opening stores too quickly, thereby

cannibalizing existing sales. Ace Hardware guided to a subdued trend in same stores sales

growth while reducing their new store openings from 15 to 10 with only 1 new store in

Jakarta. The company highlighted the negative impact of the nearly 30% wage increase

resulting in a 2 percentage point margin hit, while higher incomes seem to be taking some

time to translate into greater spending by consumers.

Jokowi’s Hope Factor

On the political front, considerable hope surrounds Mr. Joko Widodo (popularly called

“Jokowi”), Jakarta‘s Governor, becoming the next President of Indonesia in 2014. Similar to

the sentiment in India for Mr. Narendra Modi of India, Jokowi embodies “the Hope Factor

for getting things done,” such as building infrastructure, and running a cleaner, efficient

government with charisma. With 67 million new voters in Indonesia, there has been a fair

bit of discontentmernt with the slow decision-making in the second term of the current

SB Yodhoyuno Government. In just under two years as Governor of Jakarta, Jokowi has

emerged as a tough taskmaster who has fast-tracked construction of the Jakarta metro,

while putting a check on unabated growth of malls and cars in Jakarta City, which lacks

the infrastructure to cope with such influxes. With a sound land acquisition policy yet to be

implemented after years of debate, patience is wearing thin among the masses, who suffer

through endless traffic jams and frequent flooding in the Greater Jakarta region, which is

home to 24 million people. It is widely believed that the verdict of the Presidential Elections in

2014 will determine whether Indonesia maintains the growth momentum of the last decade

or falls off the radar. We do agree—as in India, 2014 is the year to start changing the course

of the country.

It is widely believed that the verdict

of the Presidential Elections in 2014

will determine whether Indonesia

maintains the growth momentum of

the last decade or falls off the radar.

We do agree—as in India, 2014 is the

year to start changing the course of

the country.

7


China divesting from coal, but not all gas is equal

In the past decade the Chinese economy has experienced extraordinary growth. However,

this has come at a price as air pollution has also been growing at a fast pace and has

reached unacceptable levels in Beijing.

[left] Air Quality Index map on December 8, 2013. Courtesy of China Air Quality Index (http://fresh-ideas.cc)[right] Shanghai in bad pollution days

As the government shifts its focus to a more sustainable growth path, air pollution needs

to be tackled and emissions have to be reduced. The best way to achieve this target is by

decreasing the reliance on coal and increasing the share of gas and renewables out of the

primary energy mix. Currently, coal represents around 70% of China’s primary energy mix,

while natural gas’ share is just around 5%, compared to a global average of 24%.

Source: BP statistical review of world energy 2013, measured in million tonnes of oil equivalent, China includes Hong Kong.

Natural Gas 23.9%

Coal 29.9%

Hydro 6.7%Oil 33.1%

Renewables 1.9%Nuclear 4.5%

World 2012

Oil 33.1%

Natural Gas, 4.8%

Nuclear, 0.8%

Hydro, 7.0%

Renewables 1.2%

Coal, 68.1%

China 2012

8


Diesel and gasoline are also another relevant source of air pollution. According to an NDRC

research institute analyst, automotive fuels are responsible for around 25% of the air pollution

in the Beijing urban area. One of China’s most important initiatives to increase gas penetration

is to replace gasoline and diesel with compressed natural gas (CNG) and liquefied natural gas

(LNG), which generate about 11% 1 fewer emissions.

The appeal of CNG

CNG is mostly used in city transportation—by cars and taxis, while LNG is used by buses

and long distance heavy transportation trucks. In our most recent trip to China, we met

with several industry specialists and companies engaged in both the CNG and LNG

transportation supply chain.

For CNG, we concluded that the adoption makes sense for city vehicles and taxis. Based on

data we gathered on the ground, the payback period for the conversion of a gasoline engine

to a CNG engine ranges from five to 11 months, assuming a conversion cost of roughly RMB

7,500 and the vehicle logging 50,000 km per year.

From the CNG refilling station perspective, the return on investment is also very attractive and

in some cases, IRRs may exceed 20%. We were told by some industry players that the cost

of building a CNG station is relatively low, and depending on the location, the cost may range

between RMB 7mn to 10mn, including land. Based on what PetroChina has disclosed as its

average selling price and the retail prices we saw at the various pumps, the gas is sold to the

end customer at almost twice the price of purchase, so the economics are clearly attractive.

In our view, the main challenges for the construction and operation of CNG stations are

getting the licenses and finding stable gas suppliers. Therefore, the companies with a

natural advantage are the city gas operators, such as ENN and China Resources Gas,

and companies which already engage in the fuel marketing business such as Sinopec,

PetroChina and Kunlun Energy, a listed subsidiary of PetroChina. Another additional

challenge is that the Chinese government prioritizes the supply of natural gas to domestic

users for heating and cooking, then to industrial users, and lastly to CNG refilling stations.

Hence, we believe that the large players, such as PetroChina and other gas distribution

companies, are again in a better position as they command more flexibility in how to

allocate their gas. We also believe that new players will find it difficult to build CNG stations

since CNG is a high yielding business, and existing players will not be so kind as to allow

them to have a consistent supply.

We believe that the large players,

such as PetroChina and other gas

distribution companies, are again in a

better position as they command more

flexibility in how to allocate their gas.

1 US Department of energy http://www.afdc.energy.gov/vehicles/natural_gas_emissions.html,

9


LNG’s difficult road

For the LNG liquefaction facilities, we found a different reality on the ground from what we

saw of the CNG supply chain, as the LNG value chain is more complex. Natural gas needs to

be liquefied first and then shipped to the LNG refilling stations, where it is then sold as a fuel

for LNG trucks and buses.

Through our channel checks, we found out that most of the liquefying facilities, located in

Inner Mongolia, are currently being underutilized, with utilization for some players reaching

levels as low as 20%, given low demand from the still nascent LNG industry. The exception

is Kunlun Energy, which has been able to achieve an average utilization rate of 70%, thanks

to its integrated business model, which allows them to manage the expansion of liquefaction

and LNG retail stations at the same pace. Kunlun Energy also counts on more stable supply

of gas from its parent PetroChina, which controls most of the gas supply in China. An

additional barrier is that capital requirements to build these facilities are high, at around RMB

1 bn for 1 million m3/day of capacity.

Based on the data we collected on the ground and on our assumptions, we believe these

liquefying facilities’ IRR will remain at mid-single digit, ranging between 4% and 7%. This is

due to the relatively larger capex investment as well as the narrower spread between the

selling price to the LNG station and the cost of gas acquisition from PetroChina compared to

the spread between the CNG retail price and the gas acquisition cost from PetroChina.

For the LNG refilling stations, returns are higher than liquefaction facilities. Based on the data

we gathered from a Guangdong LNG refilling station manager and on our assumptions, we

believe the project payback period can be less than three years, as there is still a significant

spread between the cost of LNG and the retail price of LNG and the capex requirement is

only just slightly higher than a CNG station. An LNG station also has the flexibility to change

the source of its gas depending on the price. If LNG prices in the coast are lower than Inner

Mongolia price plus transportation, the station buys it in the coastal area; otherwise it sources

from Inner Mongolia.

Due to major price differences of LNG around China, the payback period is only short enough

to justify LNG conversion in the central part of the country—not along the coasts. This is

because along the coasts, there is a much higher transportation cost to get piped gas or to use

LNG imports. The difference is quite meaningful, as the payback period of LNG conversion for

trucks based in Inner Mongolia is around 18 months, but in Guangdong, it is about 33 months.

Lastly, we heard from LNG equipment makers that LNG engines still need some technical

improvements in order to reach optimal utilization, as LNG engines are less efficient (less output

per unit of fuel input) and they must be in constant use to minimize the vaporization loss of the

fuel. If left idle for one week, an LNG truck loses all the fuel in its tank through vaporization.

10


CNG is viable now, LNG has potential later

We do not believe the LNG story in China is over, but the government will have to put some

more incentives in place in order to see a faster adoption of LNG as a fuel for vehicles. CNG

as vehicle fuel source, on the other hand, has favorable economic incentives that will drive

adoption and government just needs to make sure that supply growth is stable and reliable.

Hence we believe that the city gas distribution companies with CNG optionality, such as

ENN and China Resources Gas are better positioned to tap the gas for the vehicle market,

whereas Kunlun Energy’s LNG business, despite being one of the better LNG businesses,

may still suffer for a while before it finally takes off.

CNOOC (parent company) LNG refilling station in Shenzhen

PetroChina/Kunlun LNG refilling station (2) http://www.kunlun.com.hk/userfiles/image/1.png

11


Investment principles

We value a team based approach in decision making

What does it mean to us?

We do not rely on any single star portfolio manager or star analyst.

We believe in sharing information and analysis among ourselves.

We rely on our collective knowledge and invest in long-term ideas.

How do we apply it?

We openly discuss and examine key ideas in Investment Committee

meetings where investment professionals participate.

We share our research notes globally on MARS (Mirae Asset

Research System) online, over email and we have regular video

conference calls with other overseas offices.

We identify the sustainable competitiveness of

companies


We believe companies that have strong moats will have stable

earnings growth and cash flow, and share prices will rise as

these companies add considerable value each year. This tenet

drives our investment ideas, not short-term trading profits.

How do we apply it?

Sustainable competitiveness scorecards: We thoroughly analyze 30

factors for each company to identify the competitiveness of the company

for the long term. This scorecard includes six main categories,

which are: Barriers to Entry, Competitive Dynamics, Sustainability of

Returns, Management Track Record, Reliance on Outside Support,

and Ownership of Distribution/Production Supply Chain.

Extensive company meetings and research trips: Third party research

is useful for us to know the consensus, but it cannot be the sole

input when making investment decisions. We have investment

professionals around the globe; we frequently hold meetings in our

offices and conduct numerous on-site visits and meetings.

We invest with a long term perspective


Many of our investors are investing with us for their retirement, or

even for their children. Long-term does not mean only three to

five years for us. Our goal is to find companies that can last and

prosper in the next several decades and invest in them – these

are companies with high terminal values.

How do we apply it?

Analysts and portfolio managers are evaluated by their long-

term performance. To add a new position into a fund, we spend

considerable time researching and evaluating it. We’re not looking

to rush in based on a news headline, we are more concerned with

generating solid, long-term, well researched ideas.

We assess investment risks with expected return


We constantly monitor the changes in regulation, competitive

environments, and managements strategies. We do not fall in love

with our holdings, and will exit a position when the investment

thesis is no longer valid. The potential upside and downside and

our conviction drives the sizing of our positions.

How do we apply it?

In addition to risk analysis done by research team, where we quantify

the upside and downside to earnings and valuation, our risk team

monitors various parameters including sector volatility and liquidity,

and gives active feedback to the research team. Our risk team is

aided with a range of third-party risk management systems such as

Factset, Axioma, Thomson Reuters, and Bloomberg POMS/AIM.

12


Global Offices

Mirae Asset Global Investments

East Tower 26F, Mirae Asset CENTER1 Bldg,

67, Suha-dong, Jung-gu,

Seoul, Korea (100-210)

Tel.+82-2-3774-6644

Mirae Asset Global Investments (HK)

Level 15, Three Pacific Place, 1 Queen’s

Road East, Hong Kong, HK

Tel.+852-2295-1500

Mirae Asset Global Investments (UK)

4-6 Royal Exchange Buildings,

London, EC3V 3NL, United Kingdom

Tel. +44-20-7715-9900

Mirae Asset Global Investments (USA)

1 Bryant Park, 39th Floor, New York, NY,

10036, USA

Tel. +1-212-205-8300

Mirae Asset Global Investments (Taiwan)

6F, NO. 42, Sec.2 Zhongshan N. Rd.,

Taipei City 10445, Taiwan (R.O.C)

Tel. +886-2-7725-7555

Mirae Asset Global Investments (India)

Unit No. 606, 6th Floor, Windsor Building

Off. C.S.T Road, Vidyanagari Marg.

Kalina, Sanatacruz (East), Mumbai

400 098, India

Tel. +91-22-6780-0300

Mirae Asset Global Investments (Brazil)

Rua Olimpíadas, 194/200,

12 Andar, CJ 121, Vila Olímpia

São Paulo, CEP 04551-000, Brazil

Tel: +55-11-2608-8500

Disclaimer

This document has been prepared for presentation, illustration and discussion purpose

only and is not legally binding. Whilst complied from sources Mirae Asset Global

Investments believes to be accurate, no representation, warranty, assurance or implication

to the accuracy, completeness or adequacy from defect of any kind is made. Division,

group, subsidiary or affiliate of Mirae Asset Global Investments which produced this

document shall not be liable to the recipient or controlling shareholders of the recipient

resulting from its use. Mirae Asset Global Investments is under no obligation to keep the

information current and the author’s views may have changed since the date indicated.

Also the opinions expressed are those of the author and may differ from those of other

Mirae Asset investment professionals.

The provision of this document shall not be deemed as constituting any offer, acceptance,

or promise of any further contract or amendment to any contract which may exist

between the parties. It should not be distributed to any other party except with the written

consent of Mirae Asset Global Investments. Nothing herein contained shall be construed

as granting the recipient whether directly or indirectly or by implication, any license or

right, under any copy right or intellectual property rights to use the information herein.

Mirae Asset Global Investments accepts no liability for any loss or damage of any kind

resulting out of the unauthorized use of this document. Investment involves risk. Past

performance figures are not indicative of future performance. Forward-looking statements

are not guarantees of performance. The information presented is not intended to provide

specific investment advice. Please carefully read through the offering documents and

seek independent professional advice before you make any investment decision.

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