Korean Film & Broadcasting Content Industry

Analysts who prepared this report are registered as research analysts in Korea but not in any other jurisdiction, including the U.S.
PLEASE SEE ANALYST CERTIFICATIONS AND IMPORTANT DISCLOSURES & DISCLAIMERS IN APPENDIX 1 AT THE END OF REPORT.
Film/Broadcast Content
The increasing role of “tentpoles” in the
content industry
The need for tentpoles in the content industry
The content industry and a tent have one thing in common: both need a tentpole to
support the entire structure. In the content industry, tentpoles are defined as hit titles
that provide a source of steady cash flow, such as the blockbuster films of movie studios
and the top-rated programs of TV networks.
The content industry is vulnerable to the success or failure of a title as well as changes in
seasonality. Establishing a tentpole by investing around 70% of the annual budget on
just one or two projects could prove an effective strategy against such risks. If tentpole
films or shows become a hit, they can compensate for losses made elsewhere. Creating a
long-term tentpole lineup, increasing the number of tentpoles, and being able to predict
future revenue can lead to a structural improvement in the business. In other words,
tentpoles can make the content industry more predictable.
Tentpole strategies used in the film distribution and broadcasting industries
The tentpole strategy is primarily used in the film distribution and broadcasting
industries. A major proponent of the strategy is Walt Disney, which plans its five-year
release lineup based on its Disney and Marble Comics franchises. The media giant has
recently seen its film profits steadily grow after releasing a string of successful tentpole
movies every quarter. We believe Korean film distributors are also beginning to follow
this strategy. Similar moves have also been seen in the broadcasting industry’s
programming trends. A notable example is CJ E&M, which has built its Friday night
entertainment shows into its tentpoles. The company has also been moving to increase
its tentpoles on a weekday, quarterly, and channel basis.
2015 earnings to confirm growth opportunities
In 2015, we expect major domestic film and broadcast content companies to deliver YoY
earnings improvements, backed by the release of a number of tentpole films in 2H and
continued cost control. The growth of the content rights distribution market should also
prove favorable to profit margins. In 2H, we expect to see more foreign co-productions,
as well as more localized content offerings overseas via newly established subsidiaries in
China and several other countries.
Overweight on film/broadcast content; Top pick is CJ E&M
We believe the increasing adoption of the tentpole strategy is making film and
broadcast content a more predictable and investable sector. We present CJ E&M as our
top pick in the sector. We upgrade our rating on J Contentree to Buy (from Trading Buy)
and initiate coverage on movie investors/distributors Showbox and Next Entertainment
World (NEW).
Overweight (Maintain)
Industry Report
July 27, 2015
Daewoo Securities Co., Ltd.
[Telecom Service / Media]
Jee-hyun Moon
+822-768-3615
jeehyun.moon@dwsec.com
A look at the film/broadcasting industry through the tentpole lens
Source: KDB Daewoo Securities Research
Profit leverage
Stable cash flow
Balanced growth of
business portfolio
Growth opportunities
overseas
Geographical
expansion
Better domestic
profit margins
Stronger growth in
China and SE Asia
Cash-cow
stability
Rising stars
Growth
<Films>
Box-office hits
<Broadcasting>
Top programs
Business
structure
Lineup

2
July 27, 2015
KDB Daewoo Securities Research
C O N T E N T S
I. The role of “tentpoles” in the content industry 3
1. What do tentpoles mean for the content industry? 3
2. Need for tentpoles in the content industry 4
II. Tentpoles in the film distribution industry 5
1. Concerns about the Korean film market 5
2. Hollywood cases 7
3. Growth opportunities for Korean films 9
III. Tentpoles in the broadcasting industry 12
1. Broadcasters taking a tentpole strategy in programming 12
2. Snowball effect of tentpoles 13
IV. Earnings forecast 14
1. Turnaround 14
2. Growth opportunities 15
3. Major lineup for 2H 17
V. Investment strategy and valuation 19
1. Investment strategy and key considerations 19
2. Comparison with global peers 20
Key Recommendations 21
CJ E&M (130960 KQ) 22
J Contentree (036420 KQ) 28
Showbox (086980 KQ) 32
Next Entertainment World (160550 KQ) 37

3
July 27, 2015
I. The role of “tentpoles” in the content industry
1. What do tentpoles mean for the content industry?
Tentpoles are playing an increasingly important role in the film and broadcasting industry. In the
content industry, the term refers to hit titles that provide a source of steady cash flow, such as
the blockbuster films of movie studios and the top-rated programs of TV networks (analogous to
Samsung’s Galaxy smartphone models in the manufacturing sector).
Let us imagine a film studio or TV network is planning 10 projects for the year; in that case, a
tentpole strategy would be to concentrate 70-80% of the annual budget on just one or two
projects, as opposed to allocating 10% of the budget to each project. This can be an effective
strategy because the success of a single title can have an outsized impact, potentially
compensating for losses made elsewhere.
As tentpole content determines producers’ annual earnings, the presence of long-term tentpole
lineups can make the content industry more predictable. In addition, increasing the number of
tentpole titles would signal that a producer is increasing its investments and business scale.
Although risks could also grow, such a strategy should ease earnings uncertainties/volatility,
assuming the projects have a reasonable expectation of success.
Building tentpoles into lineups is widespread among Hollywood film studios, with many studios
even presenting five-year tentpole lineups; examples include The Avengers series by Disney’s
Marvel Studios, Warner Bros. Entertainment’s superhero-themed movies (e.g., Batman,
Superman, and Wonder Woman), and 21st
Century Fox’s Fantastic Four and X-Men series.
Korean movie studios are also building tentpoles into their lineups. For example, CJ E&M released
The Admiral: Roaring Currents and Ode to My Father last year and plans to release Veteran and
Himalayas this year. The company also has tentpole shows for its broadcast business, including
Superstar K, Three Meals a Day, and the Reply series. Showbox’s tentpoles are Kundo: Age of the
Rampant (2014), Assassination (2015), and The Throne (2015). And NEW’s tentpoles are Haemoo
(2014), Northern Limit Line (2015), and The Great Tiger (2015).
Figure 1. Key programs/movies hold up the content business, similar to how a pole supports a tent

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July 27, 2015
2. Need for tentpoles in the content industry
The tentpole concept can be applied not only to product lineups but also to business portfolios
and target markets. Expanding (in both quantitative and qualitative terms) tentpole products,
tentpole business areas, and tentpole markets can improve content producers’ fundamentals.
1) Product lineups
Tentpoles are projects that are highly likely to succeed. Even if other projects fare poorly, the
success of a tentpole is likely to offset losses made elsewhere.
For CJ E&M, gains on last year’s movie tentpoles—The Admiral: Roaring Currents and Ode to My
Father—offset losses on No Tears for the Dead and Make Your Move. The same is true for the
broadcast business; CJ E&M operates 18 channels, and though not all of them are believed to be
in the black, the channel tvN is serving as a tentpole. Specifically, top-rated shows such as
Superstar K and Three Meals a Day are generating high advertising revenue, offsetting losses on
other shows.
2) Business structure
In terms of business portfolio, tentpoles are a major cash cow, and the strong cash flow they
generate enable content producers to expand into other business areas.
As for J Contentree, the core magazine unit does not generate good cash flow, and in fact barely
breaks even. On the other hand, subsidiary Megabox (whose earnings are reflected in
consolidated financial statements) generates an annual OP margin of 17% and contributes the
most to net profit attributable to controlling interests. J Contentree plans to increase its stake in
Megabox from 46% to 98% in August, using proceeds from a rights offering.
3) Market expansion
For Korean companies, the domestic market is a tentpole market. However, it should be noted
that China is fast becoming another key business area. Considering its huge size and strong
growth potential, we believe the Chinese market could become a new tentpole market.
Figure 2. A tentpole strategy helps ensure sustainable business through risk management
Profit leverage
Stable cash flow
Balanced growth of
business portfolio
Growth opportunities
overseas
Geographical
expansion
Better domestic
profit margins
Stronger growth in
China and SE Asia
Cash-cow
stability
Rising stars
Growth
<Films>
Box-office hits
<Broadcasting>
Top programs
Business
structure
Lineup

5
July 27, 2015
II. Tentpoles in the film distribution industry
1. Concerns about the Korean film market
In quantitative terms, the Korean film market has been emerging as one of the strongest local
markets, with annual admissions exceeding 200mn. In addition, shares of CJ CGV have recently hit
a new high. Yet, concerns about the market have surfaced recently due to the following factors.
1) Weak performance in 1H
First, from a short-term perspective, the Korean film market slowed in 1H.
The number of moviegoers decreased by 2% YoY in 1H, and reached just 44% of the full-year
2014 figure. Although the decline was partly due to the MERS outbreak, the number of
moviegoers has in fact been stagnant since reaching the 200mn mark in 2013, and per capita
annual theater attendance has already reached four, near the world’s highest level.
In 1H, the market share of Korean films stood at only 42%, due to the strength of foreign films.
Over the past five years, the market share of Korean films has ranged from around the mid-40%
level to around 60%.
Figure 3. Number of moviegoers decreased YoY in 1H15, partly due to MERS impact
Source: KOFIC, KDB Daewoo Securities Research
Figure 4. Market share of Korean films stood at only 42% in 1H15 due to foreign films’ strength
78.1
16.9
5.4
-3.0
5.4
-4.9
8.1
22.0
9.5
0.8
-25
0
25
50
75
100
0
50
100
150
200
250
04 05 06 07 08 09 10 11 12 13 14 1H15
(%)(mn) Total admissions (L)
YoY growth (R)
1H15:
-2% YoY;
44% of
2014 total
55 58
64
50
42
49 47 52
59 60
50
42
46 42
36
50
58
51 53 48
41 40
50
58
0
25
50
75
100
04 05 06 07 08 09 10 11 12 13 14 1H15
(%) Foreign films' share Korean films' share

6
July 27, 2015
2) Structural issues
In terms of the long-term, structural outlook, it is necessary to consider content and distribution
strategies.
1) Compelling content and the value of the viewing experience are key to attracting consumers to
theaters. Korean film audiences often say there is no compelling reason to see Korean movies at
theaters instead of through VOD; underlying this perception, we believe, is the tendency of
Korean films to focus on character-driven story development rather than spectacular scenes.
Among the top 10 titles in the domestic box office from January to mid-July were six Hollywood
films: Avengers: Age of Ultron (1st
), Kingsman: The Secret Service (3rd
), Jurassic World (5th
), Mad
Max: Fury Road (7th
), Furious 7 (8th
), and Terminator Genisys (9th
). Together, these films
accounted for 60% of the total cinema audience and 62% of total revenue over that period. Such
films are perceived as being worth watching on the big screen, as they feature spectacular scenes
along with famous movie stars and attractive characters. In addition, they are available in 3D and
IMAX formats, at higher ticket prices.
The Korean films that ranked within the top 10 were Ode to My Father (2nd
), Northern Limit Line
(4th
), Detective K: Secret of the Lost Island (6th
), and Twenty (10th
). Among the Korean films, Ode
to My Father had the highest production cost, at W18bn, followed by Detective K: Secret of the
Lost Island (W10bn), Northern Limit Line (W8bn), and Twenty (W5bn). In our view, Korean film
studios would do well to start focusing on producing blockbuster films with attractive characters
and spectacular scenes, as well as interesting stories.
In terms of market structure, theater revenue still takes the lion’s share of total revenue, at 82%.
Although the digital online market, including IPTV VOD, is growing, its revenue contribution
stands at a mere 18%. As such, Korean film companies have no choice but to focus their energy
on theaters in order to ensure films’ success.
2) A long-term film distribution strategy is also important. Korean film studios tend to focus on
the short term in their distribution plans, usually disclosing lineups for only the next two years (vs.
as long as five years for Hollywood studios).
There are some factors making it difficult for Korean film studios to formulate a long-term
strategy: 1) Korean films’ return on investment remained negative for an extended period,
between 2006 and 2011; and 2) the pool of screenwriters in Korea has not grown enough, either
in quality or quantity. Meanwhile, Hollywood studios boast ample characters and storylines that
allow them to formulate long-term plans. A case in point is Marvel Comics, acquired by the Walt
Disney Company.
On a positive note, Korean films’ return on investment has been positive since 2012, leading to an
inflow of capital and talent to the market. In addition, the growth of film audiences and the
copyright market, including digital online VOD, is helping to lay a foundation for Korean film
studios to present long-term film lineups.
Table 1. Top 10 titles in the domestic box office from January to mid-July (Wbn, ‘000 persons)
Rank Title Release date Revenue Number of admissions
1 Avengers: Age of Ultron 4/23/2015 88,583 10,494
2 Ode to My Father 12/17/2014 69,825 8,912
3 Kingsman: The Secret Service 2/11/2015 50,369 6,130
4 Northern Limit Line 6/24/2015 43,191 5,715
5 Jurassic World 6/11/2015 47,588 5,522
6 Detective K: Secret of the Lost Island 2/11/2015 30,457 3,872
7 Mad Max: Fury Road 5/14/2015 32,860 3,838
8 Furious 7 4/1/2015 26,454 3,248
9 Terminator Genisys 7/2/2015 25,843 3,148
10 Twenty 3/25/2015 23,559 3,044
Note: Based on 1/1/2015 to 7/21/2015; Korean films are in bold

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July 27, 2015
2. Hollywood cases
1) The origin of tentpole strategies at Hollywood studios
The tentpole strategy is best exemplified by Hollywood studios. US studios shifted their focus to
global markets when the growth of the North American market stalled.
In 2014, the North American market saw the lowest number of moviegoers in 20 years (1.26bn).
In particular, North American box office revenue during the summer of 2014 hit the lowest level
since 2007, decreasing more than 15% compared to the previous summer. Against this backdrop,
US film studios are advancing into strong local markets overseas, including China and Korea,
which rank second and seventh in the world, respectively. In 1H, half of the top 10 box office hits
in both Korea and China were Hollywood films.
US studios’ great success in the Chinese and Korean markets lies in their strong intellectual
property and distribution power, which allow them to present long-term lineups (three to five
years) and set their preferred release dates. They often intentionally release highly anticipated
films during low-demand season, thus generating demand. Between tentpoles, they place films of
different genres and sizes to ensure efficient lineup management.
For tentpole strategies to be successful over the long term, content producers must devote
significant effort and resources to promotion and to extending the life of the content. Indeed,
film studios often start promoting tentpole movies several years before the actual release, raising
expectations. And post-credits scenes in film series are a marketing tool intended to stoke
interest in the next movie.
Walt Disney’s film division has been in the black every quarter for the past three years (operating
profit, excluding depreciation). And the size of operating profit is growing; the highest quarterly
operating profit was US$300bn in 2012, more than US$400bn in 2013, and more than US$500bn
in 2014. Moreover, growth is evening out, with the earnings gap between high- and low-demand
seasons narrowing. Tentpole movie releases used to be concentrated around year-end, but now
are more spread out across the quarters.
Walt Disney’s stock is now trading at an all-time high on the back of steadily solid earnings;
investors are particularly attracted to the filmmaker’s predictability, a rare attribute in the high-
risk entertainment content space. We believe the firm’s long-term tentpole strategy has played a
critical role in improving fundamentals.
Figure 5. OP and market cap of Walt Disney’s film division
Figure 6. Hollywood films account for more than half of top-
10 grossing films in China in 1H15
Note: Different financial year from Korea (fiscal year ends in September); Most
recent 2Q OP is an estimate
Source: Thomson Reuters, Walt Disney, IMDB, KDB Daewoo Securities Research
Note: Based on cumulative box office revenue from Jan 2015 to June 2015
0
50
100
150
200
-200
0
200
400
600
1Q12 3Q12 1Q13 3Q13 1Q14 3Q14 1Q15
(US$bn)(US$mn) Walt Disney Studios OP (L)
Walt Disney Co. market cap (R)
The Avengers 2
Inside Out
Big Hero 6
Frozen
Cinderella
The Avengers
391
236
203
157
124
120
112
100
88
86
Furious 7
Avengers 2
Jurassic World
The Man from Macau 2
The Hobbit 3
Dragon Blade
Wolf Totem
San Andreas
Wolf Warrior
Stand by Me Doraemon
(US$mn)Top grossing films in China in 1H

8
July 27, 2015
2) Hollywood tentpole lineup
It is common for Hollywood film studios to have tentpole movies lined up for as long as the next
five years. Such long-term lineups are common for superhero movies, including Walt Disney’s
Avengers series, Warner Bros.’ Batman, Superman, and Wonder Woman series, Sony Picture’s
Spider-Man movies, and 21st Century Fox’s Fantastic Four and X-Men series.
Figure 7. Among Hollywood studios, long-term lineups are common for superhero movies
Note: Based on media reports in Feb 2015; Release dates and titles could change; Fox and Sony Columbia have not yet unveiled
plans for 2018 and after
Source: Comics Alliance, KDB Daewoo Securities Research

9
July 27, 2015
3. Growth opportunities for Korean films
1) Domestic strategy
Compared to US film studios that operate in the global arena, Korean studios have more limited
capital and operate in a smaller and less developed popular culture market. In spite of such
limitations, we see growth opportunities for Korean film content producers.
1) Box office revenue is steadily expanding in Korea. Movie attendance is gradually increasing,
aided by broader moviegoer demographics (age groups) and geographic distribution. Average
ticket price is also climbing, boosted by the introduction of 3D/4D theaters. The Korean box office
market is the seventh largest in the world, and Korea has among the world’s highest per capita
annual movie attendance figures, at 4.3.
2) The film rights market is also growing, helped by the digital conversion of pay TV and
technological improvements (mobile and LTE, etc.). Now that telcos are competing in the media
market through IPTV, they are aggressively introducing VOD packages and monetization models.
Aggressive monetization efforts by terrestrial TV networks and cable program providers have also
helped the growth of the film content market. The expansion of the film rights market in Korea is
leading to higher profitability for the Korean movie industry.
3) Recognizing the importance of strategic movie lineups, major Korean film distributors are also
deploying tentpole strategies, i.e., securing strong intellectual property and implementing long-
term marketing. Distributors begin promoting major new titles at least one year before the
release date. In addition, the fact that CJ E&M, Showbox, and NEW are all listed on the stock
exchange (and thus under pressure to report steady earnings) encourages them to search actively
for intellectual property that can generate predictable earnings.
For its tentpole movies, CJ E&M tends to produce Korean-style blockbusters (which are marked by
a focus on storytelling, spectacle scenes, and casts of well-known actors/actresses) utilizing its
abundant capital. The Admiral: Roaring Currents—the firm’s biggest hit to date—drew an
audience of 17mn viewers. Showbox, which has been in the business for a long time, makes noir &
action movies (with Choi Dong-hun often serving as director) and historical drama movies that
tend to be released around major holidays. The Thieves is the company’s most successful movie
(13mn viewers) to date. And NEW, which is relatively new to the industry, is known for surprising
the market with unexpected box office hits, including Miracle in Cell No. 7 (12mn viewers), The
Attorney (11mn), and Northern Limit Line.
Figure 8. CJ E&M movie with all-time
highest number of admissions
Figure 9. Showbox movie with all-time
Figure 10. NEW movie with all-time
Note: Roaring Currents released in 2014; Cumulative
audience of 17,611,849
Note: The Thieves released in 2012; Cumulative
audience of 12,983,330
Note: Miracle in Cell No. 7 released in 2013;
Cumulative audience of 12,811,206

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July 27, 2015
2) Accelerating global outreach
Domestic film production companies are accelerating their forays into the global market (China
and Southeast Asia, in particular) through co-production. China, the world’s second largest film
market, is rapidly catching up to the US (number one), and Southeast Asia is anticipated to grow
at a CAGR of 5% over the next five years.
In China, CJ E&M, Showbox, and NEW are engaging aggressively in co-production. Under the
Sino-Korean Film Co-production Treaty, which Korea and China signed last year, films approved as
being co-productions are recognized as domestic films in China, making them exempt from
regulations on foreign films.
CJ E&M launched its first joint production project in 2009 by participating in the making of
Sophie's Revenge. More recently, the company has found success with A Wedding Invitation
(2013) and 20 Once Again (early 2015), both of which were remakes of popular Korean movies.
For The Peaceful Island, scheduled for release in 2H15, the company has targeted the Chinese
market from the planning and story development stages. CJ E&M plans to establish a Chinese
subsidiary this year to further step up its Chinese business.
Showbox and Huayi Brothers (whose relationship began in 2011 with the joint production of Mr.
Go) signed an exclusive partnership deal in March. The companies plan to establish Showbox
China and produce at least six films over the next three years. They have already commenced the
production of two films, one of which might be released as early as this year.
NEW’s Chinese partner, Huace Media, is the leading drama producer in China. The company
invested W53.6bn in NEW, becoming the second largest shareholder (with a 13% stake as of end-
1Q). Under the partnership with Huace Media, NEW plans to carry out various content businesses
in China.
Figure 11. China’s film market is rapidly catching up to the US, and also seeing increased co-
productions with Korean companies
Source: PwC, KDB Daewoo Securities Research
Table 2. China’s film industry regulations
Area Details
Imports - Ceiling on number of film imports: 34 based on the system where producer, distributor, and
theaters share revenue; 30 based on the system where producer does not participate in revenue
sharing
Distribution -Not allowed for foreign capital
Cinema -Ceiling on foreign stake in theaters (49%)
Co-production -Licensed Chinese film producers must receive approval for co-production with foreign partners
- If a film co-produced by Chinese and Korean companies is approved, it is recognized as a Chinese
film in China (effective for three years from July 2014)
Other -Strict standards for violent and sexual content
Note: The Sino-Korea Film Co-production Treaty, signed in July 2014, is effective for three years after signing and will be
automatically extended if each party shows no intention of termination within six months before expiration.
Source: Ministry of Culture, Sports, and Tourism, KCCA, KOFIC, KDB Daewoo Securities Research
0
10
20
30
40
50
60
70
0
3
6
9
12
15
09 10 11 12 13 14 15F 16F 17F 18F
US (L)
China (L)
China vs. US (R)
(US$bn) (%)
In the US, actual figures are in line with the forecast YTD in 2015,
while in China actual figures have exceeded the forecast.

11
July 27, 2015
CJ E&M sees Southeast Asia as among the most promising global markets, as this region allows
foreign players to not only engage in co-productions, but also (unlike China) enter into the
distribution market.
In Vietnam, the company’s co-production De Mai Tinh 2 recorded the highest ticket sales in the
country’s history. In May 2015, 3 Girls was released, and Starting Over Again is scheduled for
release in 2H. And CJ E&M is anticipated to expand its distribution network to include Vietnam.
Vietnam should offer a favorable business environment for the company thanks to CJ CGV’s
acquisition of Megastar, the leading movie theater chain in Vietnam. According to PwC, Vietnam’s
box office market reached US$30mn last year and is expected to grow at a CAGR of 5.2% over
the next five years.
In Thailand, CJ E&M released Cha-Lui: Touching the Sky, in which the company jointly invested
with its local partner Transformation Film. Around end-May, the company also unveiled a plan to
establish a joint venture with the country’s largest movie theater operator, Major Cineplex Group.
CJ E&M has already been selling and distributing Korean films in Thailand since 2000. Going
forward, the company plans to increase co-production in the country. Thailand’s film market is
estimated at US$130mn, 4.3 times larger than Vietnam’s, and is forecast to expand at a CAGR of
5.6% over the next five years.
CJ E&M is also considering expanding into Indonesia, where the company is currently engaged in a
co-production planned for release next year. Along with China, Indonesia has the potential to
become a huge market for the company, thanks to its large population and fast-growing middle
class. Multiplexes have already taken firm root in the country. Also, the high penetration of social
networking services among the young population should help the company advertise films via
digital media.
Like China, Indonesia heavily restricts investments by overseas capital to protect its own film
industry. CJ E&M is keenly watching whether regulations will be eased going forward. PwC
forecasts that the Indonesian box office market stood at US$100mn last year. The entire film
market (including box office and additional rights distribution) is anticipated to display a CAGR of
8.9% over the next five years—the fastest growth in Asia outside of China.
Figure 12. China and Southeast Asia—major regions for co-productions with Korea—have bright
box office market outlooks
Note: Five-year CAGR estimates from 2015 to 2019
Source: PwC, KDB Daewoo Securities Research
15.4
5.6 5.6 5.5
4.0 3.6
2.6
-5
0
5
10
15
20
China Indonesia Thailand Vietnam Philippines Singapore US Korea Taiwan Malaysia Japan France
(%)
China, Indonesia, Thailand, and Vietnam are major regions for JVs with
Korean studios; these countries' film markets have higher
five-year CAGR estimates compared to other regions.

12
July 27, 2015
III. Tentpoles in the broadcasting industry
1. Broadcasters taking a tentpole strategy in programming
We can also see a trend toward a greater focus on tentpoles in the broadcasting industry. In
particular, new broadcasters are building tentpole programs to ensure efficient channel
operations from the start.
During a new channel’s early period, tentpoles tend to be placed on specific dates or in specific
time slots. For several years, CJ E&M aired the audition program Superstar K on the Mnet channel
on Friday nights. Other tentpoles—e.g., Grandpas Over Flowers, Three Meals a Day, and Reply, all
airing on the tvN channel—have also been concentrated on Friday, successfully creating the
perception among the public that Friday is the “CJ E&M day.” Similarly, JTBC is well-known for its
Monday evening shows, such as Please Take Care of My Refrigerator and Non Summit.
Multiple program providers (MPP) tend to promote several key channels as tentpoles. For
example, CJ E&M has nurtured tvN and Mnet as tentpoles among its 18 channels.
Once key programs and channels are positioned as tentpoles, MPPs allocate different genres, or
programs with varying budgets, among them. If the strategy proves successful, tentpoles can be
expected to increase. Indeed, CJ E&M is attempting to build more tentpole dates (besides Friday)
by launching House Cook Master Baek on Tuesday and Wednesday Food Talk on Wednesday. In
addition, CJ E&M’s OCN and O’live channels are gaining more popularity. As for JTBC, even before
its Monday shows became popular, it attempted to build Ssulzun (Thursday) and Witch Hunt
(Friday) into tentpoles.
Given the heavy earnings contribution of media firms’ broadcasting units, earnings are vulnerable
to stable programming. As the share of predictable programs increases, profits and leveraging
ability should become more stable. And once daily program schedules are set, additional
production expenses will be limited. With expenses being more or less fixed, strong ad revenue
from tentpoles should lead to profits. In addition, broadcasters can raise overall ad sales by
bundling sluggish programs with tentpoles.
Table 3. Daily program schedules; Once schedules are fixed, additional expenses are limited
Date CJ E&M JTBC SBS
Mon Hidden Identity (drama)
Please Take Care of My Refrigerator, Non
Summit
High Society (drama)/
Healing Camp, Aren't You
Happy
Tue
House Cook Master Baek/
Hidden Identity
Off to School
High Society/Some Guys,
Some Girls
Wed Wednesday Food Talk Children, The Life's Greatest Blessing
Mask (drama)/Night of TV
Entertainment
Thu Superstar K 7 With You/Ssulzun Mask/Honey
Fri
Three Meals a Day/Oh My Ghost
(drama)
Witch Hunt/LAST (drama) Law of the Jungle
Sat Oh My Ghost Where Is My Friend's Home/LAST Same Bed Different Dreams
Sun My Beautiful Bride (drama) Talk To You Good Sunday
Note: Dramas are as of July 2015; For entertainment programs, only the major titles for 2H are included in the table
Source: Respective companies’ data, KDB Daewoo Securities Research
Table 4. Distributing series content across quarters offsets seasonality and increases tentpoles,
leading to revenue growth
Quarter CJ E&M (tvN) CJ E&M (Mnet) JTBC
1Q SN Korea (2011-) Unpretty Rapstar (2015-)
2Q SNL Korea (2011-), Grandpas Over Flowers (2013-) Dancing 9 (2013-) Crime Scene (2014-)
3Q Three Meals a Day (2014-), The Genius (2013-) Show Me The Money (2012-)
4Q Reply (drama series, 2012-) Superstar K (2009-) Hidden Singer (2012-)
Source: Respective companies’ data, KDB Daewoo Securities Research

13
July 27, 2015
2. Snowball effect of tentpoles
Tentpoles seem particularly valuable to broadcasting in that they create a snowball effect, leading
to derivative revenue generation.
For instance, as the popularity of a TV program grows, ad prices are likely to climb, and product
placement revenue may expand. Furthermore, re-runs, VOD, program exports, and TV format
exports generate content revenue. Tie-in product sales can also grow.
Among these derivative revenue sources, content sales (VOD sales, etc.) should provide the
steadiest revenue stream. CJ E&M has enjoyed steady growth in content-related revenue along
with the expansion of its program lineup. Also positive are increasing VOD demand and
diversifying fee models amid the digital conversion of the pay TV platform.
Figure 13. CJ E&M has enjoyed steady growth in derivative revenue related to popular content
along with the expansion of its program lineup
Source: Company data, KDB Daewoo Securities Research
Figure 14. Accelerating domestic VOD market growth
Source: KISDI, Nasmedia, CATV VOD, KDB Daewoo Securities Research
0
40
80
120
160
0
200
400
600
800
2011 2012 2013 2014 2015F
(Wbn)(Wbn)
Cable VOD revenue (L)
IPTV VOD revenue (L)
IPTV monthly plan revenue (R)
IPTV advertisement volume (R)
10
14
18
22
26
30
100
130
160
190
220
250
1Q11 1Q12 1Q13 1Q14 1Q15
(%)(Wbn) Broadcasting revenue (L)
Content/other revenue as % of total (R)
Trend (R)
Superstar K5,
Reply 1994,
Grandpas Over Flowers
Dramas + variety shows
more firmly established
Superstar K4,
Reply 1997
Increased contribution
from dramas
Superstar K6, Sisters/Youth
Over Flowers, Three Meals a
Day, Misaeng, Bad Guys
Drama + variety show hitsSuperstar K3,
Comedy Big League,
SNL Korea
Increased contribution from
variety shows

14
July 27, 2015
IV. Earnings forecast
1. Turnaround
This year, major film and broadcast content producers are anticipated to report YoY growth in
revenue and operating profit.
Filmmakers CJ E&M, Showbox, and NEW posted dismal revenue growth last year, weighed down
by a decline in movie attendance following the ferry-sinking accident and delayed movie releases.
Some tentpole movies even reported losses. As a result, investment returns came in at a meager
0.3% (estimate), vs. 13% in the previous two years. Foreign films fared better, with total viewer
numbers exceeding 100mn for the first time.
This year, revenue is likely to recover on the back of an increase in the number of moviegoers. In
1H, the number of moviegoers decreased temporarily due to the MERS outbreak, while the
release of some Korean films was delayed to avoid competition with foreign blockbusters. Since
the start of 2H, however, the market has seen the full-swing release of major tentpole films.
Furthermore, cost control will likely continue.
From a structural standpoint, the growing secondary distribution market, including domestic
VOD sales and exports, is positive. And the investment return on Korean films is also rising in line
with the growth of the secondary distribution market. The domestic market for digital online film
distribution grew by 11% YoY last year, and is likely to continue to deliver double-digit growth in
2015, backed by the progress in pay-TV digital conversion and rising VOD consumption.
Meanwhile, since last year, film export growth has been driven by the Chinese market.
Figure 15. Earnings trends of major film distributors: CJ E&M, Showbox, and NEW
Note: Aggregate data from 2012 (when NEW started to disclose earnings); 2015 is our estimate
Source: Company data, FSS, KDB Daewoo Securities Research
Figure 16. Investment returns on Korean films are closely tied to the growth of the rights
distribution market
Note: Scale of film rights distribution is sum of digital online revenue and overseas revenue
0
2
4
6
8
0
100
200
300
400
500
2012 2013 2014 2015F
(%)(Wbn) Combined revenue of three major distributors (L)
Average OP margin of three major distributors (R)
0
100
200
300
400
500
600
700
-50
-40
-30
-20
-10
0
10
20
05 06 07 08 09 10 11 12 13 14
(Wbn)(%) Investment returns on Korean films (L)
Scale of film rights distribution (R)

15
July 27, 2015
2. Growth opportunities
In our view, film and broadcast content companies will concentrate on finding opportunities and
achieving growth in overseas markets, including China, while focusing on improving profitability
in the domestic market.
Film and broadcast content companies’ overseas revenue has been rising steadily, and especially
surged in 2013, fueled by the Chinese market. According to the Korea Creative Content Agency,
broadcast content recorded the highest export growth (+48% YoY) among content exports in
1Q15. In 2015, both film and broadcast content exports will likely increase by 20% YoY.
Korean firms’ overseas content businesses are evolving. While they exported only completed
content in the past, now they are exporting content formats, and even generating local service
revenue via customized overseas content planning and production. Indeed, the number of joint
productions between Korean and foreign firms has been rising significantly this year.
In 2H, major content firms, including CJ E&M, Showbox, NEW, and SBS Contents Hub, plan to
establish branches to engage in joint ventures overseas. As such, we expect them to expand
localized content businesses full swing based on their lineup plans.
Figure 17. Revenue trend and forecast for film and broadcasting content
Note: 2015F is our estimate; Film exports (excluding local sales) grew 7% YoY and broadcasting exports grew 48% YoY in 1Q15
Source: KOFIC, KCCA, KDB Daewoo Securities Research
0
100
200
300
400
500
05 06 07 08 09 10 11 12 13 14 15F
(US$mn)
Overseas revenue from films
Broadcasting exports

16
July 27, 2015
Table 5. Localized overseas joint productions to increase full swing this year
Company Country 2013 2014 2015 2016-
CJ E&M
China
A Wedding
Invitation
(movie)
Grandpas Over
Flowers
(entertainment
show)
Peaceful Island (movie)
Naminbang 2 (movie)
Plans to increase joint
production by
establishing a local
subsidiary and expand
the Hong Kong MTV
business
Vietnam
De Mai Tinh 2
(movie)
Forever Young
(drama)
A Story of Three Women
(movie)
Starting Over Again (movie)
VK-POP Super Star
(entertainment show)
Plans to expand
business through a joint
venture with VTV
Thailand
Cha-Lui: Touching the Sky
(movie)
Plans to expand a joint
venture with Major
Cineplex Group
Indonesia
Joint movie production project
underway
Plans to release a jointly
produced movie
Showbox China
Mr. Go
(movie)
Started two film productions Plans to expand a joint
venture with Huayi
Brothers
NEW China
To establish a joint venture with
Huace Media
Plans to expand
business with Huace
Media
SBS
SBS Contents
Hub
China
Running Man
(entertainment
show)
Hurry Up, Brother 2
Law of the Jungle
Plans to expand
business after
establishing a Chinese
subsidiary
MBC China
Infinite Challenge
JTBC
J Contentree
China
Off to School (entertainment
show)
Please Take Care of My
Refrigerator, Crime
Scene, etc.
Source: Press release, Respective companies’ data, KDB Daewoo Securities Research

17
July 27, 2015
3. Major lineup for 2H
We will likely see more hit films in 2H than in 1H. Accordingly, major film companies’ earnings are
anticipated to improve heading into 2H.
Of note, renowned directors are set to stage a comeback in 2H, with Choi Dong-hoon and Ryu
Seung-wan, in particular, competing again after three years. CJ E&M plans to release Veteran
(directed by Ryu Seung-wan) in 3Q and Himalaya (Lee Seok-hoon, who also directed The Pirates)
in 4Q. Showbox has already released Assassination (Choi Dong-hoon) and is expected to release
The Throne (Lee Joon-ik) around end-3Q. As for NEW, Beauty Inside (Baek Jong-yeol) and The
Great Tiger (Park Hoon-jeon, the director of New World) are awaiting release in 3Q and 4Q,
respectively. Meanwhile, Memories of the Sword (Park Heung-sik) and Western Front (Chun
Seong-il) are in Lotte Entertainment’s lineup for 3Q and 4Q, respectively.
Historically, blockbuster hopefuls have been released during the summer. Showbox’s
Assassination, released on July 22nd
, currently occupies the top spot in the box office. The film is
expected to remain firmly in the lead at least until Mission: Impossible Rogue Nation is released in
Korea on July 30th
. Also lined up for release are CJ E&M’s Veteran (August 5th
), Lotte
Entertainment’s Memories of the Sword (August 13th
), and NEW’s Beauty Inside (August 20th
).
The short intervals between the releases might be negative to each film’s ticket sales. However,
demand for Korean movies appears to be running high due to the weaker lineup in 1H. In
addition, as the new movies are of various genres, they could absorb a wider range of moviegoers.
Figure 18. CJ E&M’s anticipated films for 2H15: Veteran and
Himalaya
Figure 19. Showbox ’s anticipated films for 2H15:
Assassination and The Throne
Note: Veteran and Himalaya slated for Aug. 5th
and 4Q release, respectively
Note: Assassination released on Jul. 22nd
; The Throne to be released in Sep.
Figure 20. NEW’s anticipated films for 2H15: Beauty Inside
and The Great Tiger
Figure 21. Lotte’s anticipated films for 2H15: Memories of the
Sword and Western Front
Note: Beauty Inside and The Great Tiger slated for Aug. 20th
and year-end release,
respectively
Note: Memories of the Sword and Western Front slated for Aug. 13th
and 2H
release, respectively

18
July 27, 2015
Table 6. 2H distribution schedule (Korean films) of major listed companies
Distributor Release date Title Director Cast
CJ E&M Jul. 9 The Guest Kim Kwang-tae Ryu Seung-ryong, Lee Sung-min, Lee Joon
Aug. 5 Veteran Ryu Seung-hwan Hwang Jung-min, Yoo Ah-in, Yoo Hae-jin
3Q Detective Kim Jeong-hoon Kwon Sang-woo, Sung Dong-il
4Q Angry Lawyer Heo Jong-ho Lee Sun-gyun, Kim Go-eun
4Q Dori Artist Lee Jong-pil Ryu Seung-ryong, Bae Soo-ji, Kim Nam-gil
4Q Black Priests Jang Jae-hyun Kim Yun-seok, Kang Dong-won
4Q Home Sweet Home Lee Kyung-mi Son Ye-jin, Kim Joo-hyuk
4Q Himalaya Lee Seok-hoon Hwang Jung-min, Jung Woo
Not finalized Time Renegade Kwank Jae-yong Lim Soo-jung, Lee Jin-wook, Jo Jung-seok
Not finalized Detective Hong Gil-dong Jo Sung-hee Lee Jae-hoon, Kim Sung-gyun
2H Pyeongan-do (Co-production with China) Jang Yoon-hyun Hwang Ri Sing, Ddairirun
2H Final Recipe (Co-production with China) Kim Jin-ah Henry, Yank Ja-kyung
2H Starting Over Again (Co-production with Vietnam) N/A N/A
Showbox Jun. 18 The Classified File Kwak Kyung-taek Kim Yoon-seok, Yu Hae-jin
Jul. 22 Assassination Choi Dong-hoon Jeon Ji-hyun, Lee Jung-jae, Ha Jung-woo
In Sep. The Throne Lee Jun-ik Song Gang-ho, Yu Ah-in, Moon Geun-young
2H Prosecutor’s Supplementary Story Lee Il-hyung Hwang Jung-min
2H In the Mood for Love Jo Kyu-jang Moon Chae-won, Yu Yeon-seok
2H Summer Snow Jeon Yoon-soo Ji Jin-hee, Seong Yu-ri, Kim Seong-gyun
2H A Man and a Woman Lee Yoon-gi Jeon Do-yeon, Gong Yu
2H The Insiders Woo Min-ho Lee Byung-hun, Jo Seung-woo, Baek Yun-sik
NEW Jun. 24 Northern Limit Line Kim Hak-soon Jin Koo, Kim Moo-yeol, Lee Wan
Aug. 20 Beauty Inside Baek Jong-yul Han Hyo-joo, Kim Joo-hyuk
2H Waiting For You Mo Heung-jin Sim Eun-kyung, Yoon Je-moon
2H You Sound Like Passion Jung Gi-hoon Jung Jae-young, Park Bo-young
2H The Phone (tentative) Kim Bong-joo Son Hyun-joo, Uhm Ji-won
2H To Busan Yeon Sang-ho Gong Yu, Ma Dong-seok
2H Lucid dream Kim Joon-seong Ko Soo, Seol Gyung-goo, Kang Hye-jung
2H The Great Tiger Park Hoon-jung Choi Min-sik, Jung Man-sik
Note: As of Jul 2015; Release dates subject to change
Source: KOFIC, Respective companies’ data, KDB Daewoo Securities Research
Table 7. 2H distribution schedule of Lotte and major foreign companies
Distributor Release date Title Director Cast
Lotte Jul. 2 Terminator - Genisys Alan Taylor Arnold Schwarzenegger, Emilia Clarke
Entertainment Jul. 30 Mission Impossible – Rogue Nation Christopher McQuarrie Tom Cruise, J.J. Abrams, David Ellison
Aug. 13 Memories of the Sword Park Heung-sik Lee Byung-hun, Jeon Do-yeon, Kim Go-eun
2H Western Front Cheon Sung-il Seol Kyung-goo, Yeo Jin-goo
2H The Joseon Magician Kim Dae-seung Yu Seoung-ho, Go Ah-ra
2H Journalist (Title not finalized) No Deok Cho Jung-seok, Lee Ha-na, Lee Mi-sook
2H Haeeohwa Park Heung-sik Han Hyo-joo
2H Robot, Sori Lee Ho-jae Lee Sung-min, Lee Hee-joon, Lee Ha-nui
Universal Jul. 9 Insidious: Chapter 3 Leigh Whannell Lin Shaye, Stefanie Scott, Dermot Mulroney
Pictures In Sep. Everest Baltasar Kormákur Jake Gyllenhaal, Josh Brolin, Keira Knightley
International In Oct. Crimson Peak Guillermo del Toro Tom Hiddleston, Jessica Chastain
Korea In Oct. The Walk Robert Zemeckis Joseph Gordon-Levitt, Charlotte Le Bon
In Nov. Spectre Sam Mendes Daniel Craig, Christoph Waltz, Monica Bellucci
20st Century Aug. 20 Fantastic Four Josh Trank Michael B. Jordan, Miles Teller
Fox Korea Sep. 17 Maze Runner: Scorch Trials Wes Ball Dylan O'Brien, Kaya Scodelario
Oct. 8 The Martian Ridley Scott Matt Damon, Jessica Chastain
In Dec. The Peanuts Movie Steve Martino Francesca Capaldi, Bill Melendez
2H Plaintive Whining Na Hong-jin Kwak Do-won, Hwang Jung-min
Note: As of July 2015; Release date subject to change
Source: KOFIC, Respective companies’ data, KDB Daewoo Securities Research

19
July 27, 2015
V. Investment strategy and valuation
1. Investment strategy and key considerations
The unpredictability and uncertainty of media companies’ businesses is one risk involved in
investing in media content stocks. As such, in making decisions regarding investment timing and
choosing stocks, investors should focus on companies’ efforts to make inherently unpredictable
businesses more predictable. They should also watch whether companies are successful in
reducing risks or offsetting risks with opportunities.
In the short term, highly anticipated movies could affect share prices, given that expectations
around new movies and businesses tend to boost content companies’ shares. During expectation-
driven rallies, stocks often show stronger momentum when valuations are somewhat stretched.
Once the results of movies are confirmed or new businesses begin generating revenue, valuation
tends to subside steadily, as expectations and expected earnings have already been priced in.
Looking at the share price trends of film companies, expectations tend to be reflected full swing
two weeks before new movie releases, while the performance of movies one week after the
release and thereafter determines the direction of stocks.
In the long term, improvement in the business outlook due to structural factors could provide
positive momentum. Expansion into new markets, the formation of new business strategies, and
the expansion of business areas are likely to be key triggers for upward share price movement.
Viacom’s share price around the time of its entry into the Chinese market well illustrates the
correlation between new momentum and share performance.
Figure 22. Short-term share price trends of film companies: Effect of new film expectations as well
as movies’ performance after release date must be taken into consideration
Source: Thomson Reuters, Respective companies’ data, KDB Daewoo Securities Research
Figure 23. Long-term share price trends: Viacom case illustrates how expectations are reflected
when overseas business is begun in earnest
Note: Viacom decided to spin off CBS at the end of 2005
Source: Viacom, CBS, Thomson Reuters, KDB Daewoo Securities Research
80
90
100
110
120
130
1 month prior 2 weeks prior 1 week prior Release date 1 week after 2 weeks after 1 month after
(Release date=100) Showbox (Assassination, 2015) Showbox (Kundo, 2014)
Showbox (The Thieves, 2012) CJ E&M (Roaring Currents, 2014)
CJ E&M (Ode to My Father, 2014-2015) NEW (Battle of Yeonpyeong, 2015)
Expectations reflected full swing
2 weeks before release
Confirmation of results
starting one week after
release
0
2
4
6
8
10
12
0
20
40
60
80
91 94 97 00 03 06 09 12 15F
(US$)(US$bn) Combined market cap of Viacom + CBS since 2006 (L)
Combined EPS of Viacom + CBS since 2006 (R)
1995
Began entry into China;
Chinese MTV channel
2005
Separation from CBS,
Focus on cable PP and film
businesses
2008
Economic downturn
due to financial crisis
1999-2000
China CCTV-MTV
music show
2014
Rise in revenue led by
success of films in China
2001
Launch of Nickelodeon
channel in China;
Entered film business

20
July 27, 2015
2. Comparison with global peers
CJ E&M, Showbox, and J Contentree are trading at lower EV/EBITDA multiples than global peers.
As EV/EBITDA factors in depreciation costs and tax rates that vary across countries and
companies, the multiple is useful for comparing valuation.
By country, Chinese players, namely Huayi Brothers and Zhejiang Huace Film & TV, are trading at
high premiums thanks to the strong growth of the domestic market. Among individual stocks,
companies that are expected to display sharp YoY growth in OP margin and ROE are receiving
higher valuations. Walt Disney, 21st Century Fox, and AMC are cases in point.
Table 8. Global content companies’ valuation (Wbn, %, x)
Company name Mkt Cap
OP margin P/E P/B EV/EBITDA ROE
14 15F 16F 14 15F 16F 14 15F 16F 14 15F 16F 14 15F 16F
CJ E&M (KR) 3,141 -1.1 2.9 3.5 6.6 27.3 49.1 1.0 1.9 1.9 4.7 8.2 8.0 16.4 7.4 3.9
Showbox 537 2.8 6.5 6.1 - 134.3 94.7 2.8 4.9 4.7 5.4 8.8 7.9 -1.6 3.8 5.1
J Contentree 344 8.9 9.8 10.9 - 27.8 25.3 2.1 3.1 2.7 7.6 8.6 7.7 -0.1 12.3 12.0
NEW 192 11.1 9.3 8.6 29.2 23.8 22.9 2.0 1.4 1.4 25.7 15.3 14.0 5.6 6.2 6.1
Toho (JP) 5,291 15.3 15.4 16.1 25.6 25.1 23.1 2.0 1.9 1.8 12.7 11.8 11.2 8.0 7.8 8.0
Fuji Media Holdings 3,558 4.0 4.3 4.6 18.5 17.4 16.1 0.6 0.6 0.6 8.8 7.6 7.4 3.3 3.2 3.5
Toei 1,214 9.8 10.4 10.8 16.4 15.4 14.0 0.9 0.8 0.8 9.2 9.7 9.1 5.6 5.8 6.2
Walt Disney (US) 236,154 23.3 25.9 26.9 25.5 23.5 20.7 4.4 4.3 3.9 13.4 13.6 12.4 17.7 18.2 21.5
Time Warner - Warner Bros. 84,336 21.8 25.1 27.3 19.2 18.8 15.1 3.0 2.7 2.6 14.1 11.7 10.2 12.9 16.1 20.1
21st Century Fox 80,283 17.2 21.5 22.8 18.7 17.9 17.3 3.8 3.9 3.5 11.7 12.3 11.2 52.0 24.0 22.3
Viacom - Paramount 26,226 29.6 27.6 30.9 10.1 9.8 8.6 9.8 6.6 6.5 11.7 8.6 7.7 53.2 60.0 72.6
Discovery Communications 23,414 32.9 32.1 32.2 17.6 17.1 14.7 2.6 3.5 3.2 8.7 11.4 10.7 17.3 20.2 22.5
ITV (EU) 19,664 25.1 27.4 28.0 23.0 17.0 15.6 10.7 8.8 6.8 11.6 12.3 11.3 49.8 54.5 48.5
RTL Group 16,747 17.3 19.0 19.4 19.8 18.0 17.1 4.6 4.7 4.8 10.9 10.5 10.0 21.8 25.6 27.3
Huayi Brothers Media (CH) 10,298 35.9 42.7 42.3 70.3 46.6 38.7 9.1 8.4 7.1 - 41.1 31.7 15.2 17.9 17.5
Beijing Enlight Media 8,010 31.2 40.3 42.0 114.1 60.4 45.3 12.1 8.1 7.0 60.6 66.5 49.6 12.2 13.4 15.1
Zhejiang Huace Film & TV 6,461 22.4 25.2 27.7 84.7 53.0 42.0 10.2 6.0 5.4 36.9 42.5 32.4 15.3 14.2 13.2
Beijing Hualubaina Film & TV 5,376 19.3 19.5 20.3 138.5 50.8 35.5 7.8 5.2 4.8 77.7 58.6 43.4 6.4 9.5 10.7
Average excluding China 15.6 16.9 17.7 19.2 28.1 25.3 3.6 3.5 3.2 11.2 10.7 9.9 18.7 18.9 20.0
Average 18.2 20.3 21.1 39.9 33.6 28.7 5.0 4.3 3.9 19.5 20.0 16.4 17.3 17.8 18.7
Note: Korean companies are KDB Daewoo Securities estimates; Bloomberg consensus for others; CJ E&M recognized one-off profit in 2014-2015; Ex-rights have already
occurred for NEW’s bonus issue (new shares to be listed on Aug. 18th
); Financial year ends in March for Japanese companies
Source: Bloomberg, KDB Daewoo Securities Research
Table 9. Global major film multiplex companies’ valuation (Wbn, %, x)
Company name Mkt Cap
OP margin P/E P/B EV/EBITDA ROE
14 15F 16F 14 15F 16F 14 15F 16F 14 15F 16F 14 15F 16F
J Contentree - Megabox (KR) 344 8.9 9.8 10.9 - 27.8 25.3 2.1 3.1 2.7 7.6 8.6 7.7 -0.1 12.3 12.0
CJ CGV 2,613 5.0 6.5 7.6 117.5 50.0 35.7 6.8 6.3 5.4 13.2 17.5 14.0 5.9 12.4 15.1
Wanda Cinema (CH) 23,942 18.6 18.2 18.8 141.6 108.8 76.4 37.8 25.0 19.8 - 68.3 51.0 30.8 27.6 29.2
Cinemark (US) 5,284 13.8 16.5 17.0 21.2 18.6 16.5 4.2 3.7 3.2 11.9 8.9 8.3 18.4 20.3 19.4
AMC Entertainment 3,540 6.5 9.2 9.9 40.6 25.2 21.4 2.0 1.9 1.8 12.7 8.9 8.3 5.0 7.6 7.8
Regal Entertainment 3,485 10.2 11.8 12.3 21.0 16.2 15.3 - - - 11.6 8.2 8.0 - -20.5 -23.9
Cineplex (CN) 2,730 9.4 38.9 38.8 35.9 28.0 22.6 4.3 4.1 3.9 17.4 13.6 11.9 11.3 16.8 20.8
Cineworld (UK) 2,404 12.3 14.3 14.9 23.4 18.4 16.5 2.6 2.3 2.2 11.2 10.7 9.7 15.6 13.5 14.2
Average 10.6 15.6 16.3 57.3 36.6 28.7 8.5 6.6 5.6 12.2 18.1 14.9 12.4 11.3 11.8
Note: KDB Daewoo Securities estimates for J Contentree; Bloomberg consensus for others
Source: Bloomberg, KDB Daewoo Securities Research

21
July 27, 2015
Key Recommendations
CJ E&M (130960 KQ/Buy) Success of tentpole strategy to lead to growth
 Tentpoles strategies coming to the fore this summer
 Expectations for earnings and events to grow through 2H
 Raise TP by 25% from W80,000 to W100,000; Maintain Buy
J Contentree (036420 KQ/Buy) Theater franchise and TV content to drive growth
 Rights offering for full-ownership in Megabox
 Multiplex and TV content—two mainstays—offer stability and growth
 Upgrade from Trading Buy to Buy; Raise TP from W4,700 to W6,000
Showbox (086980 KQ/Trading Buy) A living witness to Korean movie industry development
 Showbox announces the start of the summer movie season
 Dual engines (China + domestic) to power growth
 Initiate coverage with Trading Buy and TP of W10,000
Next Entertainment World (060550 KQ/Trading Buy) Note business expansion
 Young and agile film distributor
 Earnings improvement and business expansion to be confirmed in 2H
 Initiate coverage with Trading Buy and TP of W16,000

22
July 27, 2015
Tentpoles strategies coming to the fore this summer
CJ E&M appears to be increasing the use of tentpole strategies across its broadcasting,
movie, and game business units.
1) Broadcasting unit: Along with tvN and Mnet, the OCN channel now also boasts a
stable quarterly program lineup, supporting earnings stability. Some channels—including
StoryOn (soon to be renamed O tvN) and Ongamenet (OGN)—are taking a rebranding
strategy to revamp programming and operating efficiency.
2) Movie unit: The company’s movie business has been sluggish since the release of Ode
to My Father. We attribute this sluggishness to the absence of hit movies, the outbreak
of MERS-CoV, and delayed recognition of earnings related to the overseas release of co-
produced movies. However, the company will likely revive earnings in 2H through
various efforts, beginning with the release of the tentpole movie Veteran this summer.
3) Game unit: Netmarble Games, in which CJ E&M holds a 31% stake, is taking an
audacious approach; last week it announced its acquisition of SGN, the second largest
casual mobile game developer in North America, for US$130mn. Under a business
strategy unveiled during a July 15th
press conference with CEO Bang Jun-hyuk, the
company plans to release 31 new games by 1H16 and expand into the North American
and European markets (in addition to China, where it is operating in partnership with
Tencent).
Expectations for earnings and events to grow through 2H
We forecast 2Q results to fall below market expectations due to the sluggish movie
business. However, we believe the resulting short-term correction will represent a
buying opportunity, considering: 1) strong seasonality in 4Q, and 2) positive events
anticipated in 2H, such as the establishment of overseas subsidiaries and the release of
co-produced movies.
We expect earnings related to co-produced movies (recognition of which has been
delayed) to be booked in 2H, and three co-produced movies are anticipated to be
released in China and Vietnam. The company also plans to build overseas subsidiaries in
China and Vietnam this year.
Raise TP by 25% to W100,000; Maintain Buy
We retain our Buy call on CJ E&M, and raise our target price to W100,000 (from
W80,000). We revised up the P/B multiple for the asset value of the parent company in
light of improving broadcast program lineups, as well as the expanding scope of the
movie business (due to increase in co-productions with local studios). We also upped our
estimate for the value of game operations, considering improving earnings and
expanding business at Netmarble Games.
CJ E&M (130960 KQ)
Success of tentpole strategy to lead to growth
FY (Dec.) 12/12 12/13 12/14 12/15F 12/16F 12/17F
Revenue (Wbn) 1,395 1,246 1,233 1,296 1,358 1,414
OP (Wbn) 39 -9 -13 38 47 54
OP margin (%) 2.8 -0.7 -1.1 2.9 3.5 3.8
NP (Wbn) 37 5 225 115 64 77
EPS (W) 975 133 5,796 2,967 1,651 1,982
ROE (%) 3.1 0.4 16.4 7.4 3.9 4.5
P/E (x) 27.2 229.0 6.6 27.3 49.1 40.9
P/B (x) 0.8 1.0 1.0 1.9 1.9 1.8
Note: All figures are based on consolidated K-IFRS; NP refers to net profit attributable to controlling interests
Source: Company data, KDB Daewoo Securities Research estimates
Media
(Maintain) Buy
TargetPrice(12M,W) 100,000
SharePrice(07/24/15,W) 81,100
ExpectedReturn 23%
OP (15F, Wbn) 38
Consensus OP (15F, Wbn) 52
EPS Growth (15F, %) -48.8
Market EPS Growth (15F, %) 33.5
P/E (15F, x) 27.3
Market P/E (15F, x) 11.0
KOSDAQ 776.26
Market Cap (Wbn) 3,141
Shares Outstanding (mn) 39
Free Float (%) 56.7
Foreign Ownership (%) 13.2
Beta (12M) 1.56
52-Week Low 32,300
52-Week High 83,100
(%) 1M 6M 12M
Absolute 10.0 106.6 80.8
Relative 5.8 56.9 30.4
60
110
160
210
7.14 11.14 3.15 7.15
CJ E&M KOSDAQ

23
July 27, 2015
Earnings outlook
Despite the robust performance of the broadcasting unit (driven by strong seasonality),
we believe CJ E&M’s 2Q earnings fell below market expectations due to the tepid movie
unit. The sluggishness of the movie unit was likely attributable to the absence of hit
movies, the outbreak of MERS-CoV, and delayed recognition of earnings related to the
overseas release of co-produced movies. Meanwhile, we estimate that the game unit
contributed to net profit growth on the back of the success of Raven and Marvel Future
Fight.
The company will likely engage in various efforts to revive earnings in 2H, beginning this
summer with the release of the tentpole movie Veteran. We expect earnings related to
co-produced movies (recognition of which has been delayed) to be booked in 2H, and
three co-produced movies are anticipated to be released in China and Vietnam. The
company also plans to build overseas subsidiaries in China and Vietnam this year.
We also highlight 1) the strong seasonality in 4Q, and 2) business scope expansion in
light of the establishment of overseas subsidiaries and the release of co-produced
movies.
Table 10. Quarterly and annual earnings (Wbn, %)
1Q14 2Q14 3Q14 4Q14 1Q15 2Q15F 3Q15F 4Q15F 2013 2014 2015F
Revenue 265 284 343 341 293 294 353 355 1,246 1,233 1,296
Broadcasting 170 209 205 242 178 222 220 251 771 826 871
Film 50 30 93 38 66 27 81 46 209 211 219
Music/performance 45 44 45 61 49 45 52 59 266 196 205
Operating Profit -3 -9 -11 10 9 7 -2 24 -9 -13 38
Broadcasting -4 -1 -15 22 3 9 -7 26 2 2 30
Film 4 -2 7 -12 7 -3 4 -1 5 -4 7
Music/performance -4 -5 -2 0 0.3 0.3 0.3 0.1 -15 -11 1
OP margin -1.2 -3.0 -3.1 2.8 3.2 2.2 -0.6 6.9 -0.7 -1.1 2.9
Broadcasting -2.3 -0.6 -7.2 9.2 1.4 4.0 -3.0 10.2 0.3 0.3 3.5
Film 8.6 -7.9 7.0 -32.6 9.8 -10.0 5.0 -2.9 2.2 -1.9 3.0
Music/performance -8.2 -11.1 -5.1 -0.2 0.6 0.6 0.6 0.2 -5.6 -5.6 0.5
Net profit 0 -11 284 -39 90 10 6 7 1 233 114
Net margin -0.1 -4.0 82.8 -11.5 30.8 3.4 1.8 2.1 0.1 18.9 8.9
YoY growth
Revenue -3.8 -1.6 7.2 1.7 10.6 3.7 2.9 4.2 5.3 -1.0 5.9
Broadcasting -1.0 4.6 10.0 13.7 4.4 6.3 7.3 3.8 0.9 7.1 5.4
Film -12.3 -19.3 33.6 -15.0 32.5 -12.1 -13.2 20.2 -4.6 1.2 10.3
Music/performance -3.8 -12.8 -29.5 -21.5 9.6 1.9 15.8 -4.0 33.4 -26.5 3.1
Operating profit RR TTR -54.3 162.2 TTB TTB RR 152.4 TTR 48.8 TTB
Broadcasting RR TTR 6.5 181.0 TTB TTB RR 15.6 -95.5 10.0 TTB
Film -10.4 TTR 282.4 327.6 51.2 RR -37.6 RR -48.9 TTR TTB
Music/performance RR RR RR RR TTB TTB TTB TTB RR RR TTB
Net profit TTB TTB TTB RR TTB TTB -97.8 TTB - - -51.2
Notes: Based on consolidated K-IFRS; For annual data, the game division and investment unit of the performance division are reflected in discontinued operations;
Different from previously published FSS data; Net profit attributable to controlling and non-controlling interests; Gains on spin-off of game division and partial sale of
game business stake were reflected as income from discontinued operations and non-operating income in 2014; Change in net profit was not included in 2015 due to
impact of discontinued operations; RR, TTR, TTB refer to “remain red,” “turn to red,” and “turn to black,” respectively
Table 11. Earnings forecast revisions (Wbn, W, %)
Previous Revised % chg.
Notes
15F 16F 15F 16F 15F 16F
Revenue 1,306 1,370 1,296 1,358 -0.8 -0.9 - Revised down film revenue estimates
Operating profit 41 49 38 47 -7.3 -4.1 - Revised down film profit estimates
Net profit 111 66 115 64 3.6 -3.0 - Revised up game profit estimates
EPS 2,869 1,695 2,967 1,651 3.4 -2.6
OP margin 3.1 3.6 2.9 3.5
Net margin 8.9 4.8 8.9 4.7
Notes: Based on consolidated K-IFRS; Net profit and EPS are attributable to controlling interests

24
July 27, 2015
Valuation and considerations
We retain our Buy call on CJ E&M, and raise our target price by 25% to W100,000 (from
W80,000). We revised up the P/B multiple for the asset value of the parent company in
light of improving broadcast program lineups, as well as the expanding scope of the
movie business (due to increase in co-productions with local studios). We also upped our
estimate for the value of game operations, considering improving earnings and
expanding business at Netmarble Games.
We can see a trend toward greater use of tentpoles at CJ E&M’s broadcasting, movie,
and game business units. As the broadcasting unit makes a significant contribution to CJ
E&M’s earnings, stable earnings at the unit will be crucial to earnings growth. It is
positive that the company is efficiently allocating popular programs (by day, quarter, and
channel) on the back of its growing reputation and increased number of tentpole
programs. As for the movie unit, the tentpole lineup is concentrated in 2H rather than in
1H. And regarding the game unit, subsidiary Netmarble Games plans to roll out 18 new
titles in 2H in Korea, and also plans to continue its partnership with Tencent in China
while expanding to other overseas markets (by acquiring a North American game
company and securing intellectual property elsewhere in the Western world).
We expect CJ E&M to expand its business scope in 2H, with the overseas release of co-
produced movies and establishment of China and Vietnam subsidiaries. Once overseas
subsidiaries disclose details regarding business scale and movie lineups, the company’s
overseas value should boost corporate value.
Table 12. Calculation of target price (Wbn, x, W)
Category Valuation Notes
Asset value 54,423
2015F BPS P/B (x) Fundamental value (broadcasting and film)
Consolidated basis 41,864 1.3 54,423 Applied highest P/B of SBS during healthy period
Operating value 45,731
2015F profit x 31% ownership stake in Netmarble Games
Mobile game 63 28 1,764 In line with mobile game company Glu Mobile
Number of shares 38,573
Total value 100,154 Combined asset value and operating value
Target price 100,000 Rounded
Note: Used asset value of parent broadcasting and film operations due to earnings volatility; Applied operating value
for Netmarble Games as development costs are not capitalized

25
July 27, 2015
Table 13. CJ E&M’s major program schedule for 2H
Channel Date Title Producer Writer Actors/Actresses Genre
tvN Jan- (Wed) Wednesday Food Talk Lee Gilsu Shin Dongyeop, Jeon Hyeonmu Cooking
May- (Fri)
Three Meals a Day
(in Jeongseon)
Na Yeongseok Lee Ujeong Lee Seojin, Ok Taekyeon Reality show
May- (Tue) House Cook Master Baek Go Mingu
Baek Jongwon, Yun Sang, Kim
Gura
Cooking
Jun- (Fri)
Let Me In 5 (co-broadcast with
StoryOn channel)
Park Hyeonu Hwang Sinhye, Son Hoyeong Beauty
Jul- (Fri-Sat) Oh My Ghost Yu Jewon Yang Huiseung
Park Boyeong, Cho Jeongseok,
Kim Seulgi
Romance
Aug- (Mon-Tue) Rude Miss Young-ae (season 14) Jeong Hwanseok Myoung Suhyeon Kim Hyeonsuk, Ra Miran Drama
Aug- (Fri-Sat) Second Time Twenty Years Old Kim Hyeongsik So Hyeongyeong Choi Ji-woo Drama
Oct. to year-end
(not decided)
Reply 1988 Shin Wonho Lee Ujeong
Hyeri, Park Bogeom, Koh
Gyeongpyo Drama
OCN Jun-Aug (Sat-Sun) My Beautiful Bride Kim Cheolgyu Yoo Seongyeol
Kim Muyeol, Lee Siyeong, Ryu
Seungsu
Thriller
Jun-Aug (Mon-Tue) Hidden Identity Kim Jeongmin Kang Hyeonseong Kim Beom, Park Seongung Thriller
Aug-Nov (Sun) Cheo Yong 2 Kang Cheolu Hong Seunghyeon Oh Jiho, Jeon Hyoseong Detective
Mnet Jun-Sep (Fri) Show Me The Money
Lee Sangyun,
Shin Cheonji
Tablo, San E, Jay Park, Zico Audition
Aug-Nov (Thu) Superstar K 7 Ma Dusik
Yoon Jong Shin, Baek Ji-young,
Kim Bum-soo, Sung Si-kyung
Audition
Olive TV May-Dec (Thu) Korean Food war 3 Hyun Don
Shim Yeongsun, Baek Jongwon,
Choi Hyeonseok
Audition
Jun-Jul (Tue) Yumi’s Room Kim Yeonghwa
Park Jeonghui,
Choi Uju
Son Dam-bi, Yi Yi-kyung, Hyun
Woo
Sitcom
Online Fall-
Journey to the West
(tentative)
Na Yeongseok Kang Ho-dong, Lee Seung-gi Reality show
Note: As of July 2015; Dates subject to change
Source: Media reports, Company data, KDB Daewoo Securities Research
Table 14. CJ E&M’s major distribution schedule for 2015 (Korean films)
Release date Title Director Cast
Jan. 14 Love Forecast Park Jin-pyo Lee Seung-gi, Moon Chae-won
Feb. 5 C'est Si Bon Kim Hyun-seok Kim Yoon-seok, Jeong Woo, Han Hyo-joo
Mar. 5 The Age of Innocence Ahn Sang-hoon Shin Ha-kyun, Jang Hyuk, Kang Ha-neul
Apr. 9 Long Lives (tentative) Kang Je-kyu Park Geun-hyung, Yoon Yeo-jung, Han Ji-min
May 14 The Chronicles of Evil Baek Woon-hak Son Hyun-joo, Ma Dong-seok, Daniel Choi
Jun. 4 Secret Temptation Yoon Jae-goo Lim Soo-jung, Yoo Yeon-seok
Jul. 9 The Guest Kim Kwang-tae Ryu Seung-ryong, Lee Sung-min, Lee Joon
Aug. 5 Veteran Ryu Seung-hwan Hwang Jung-min, Yoo Ah-in, Yoo Hae-jin
3Q Detective Kim Jeong-hoon Kwon Sang-woo, Sung Dong-il
4Q Angry Lawyer Heo Jong-ho Lee Sun-gyun, Kim Go-eun
4Q Dori Artist Lee Jong-pil Ryu Seung-ryong, Bae Soo-ji, Kim Nam-gil
4Q Black Priests Jang Jae-hyun Kim Yun-seok, Kang Dong-won
4Q Home Sweet Home Lee Kyung-mi Son Ye-jin, Kim Joo-hyuk
4Q Himalaya Lee Seok-hoon Hwang Jung-min, Jung Woo
Not finalized Time Renegade Kwank Jae-yong Lim Soo-jung, Lee Jin-wook, Jo Jung-seok
Not finalized Detective Hong Gil-dong Jo Sung-hee Lee Jae-hoon, Kim Sung-gyun
Jan. 8 Miss Granny (China) Cheon Jung Dao Yangzsan, Guiaroi, Roohan
May 15 Three Girls (Vietnam) Bo Ddan bin Hoang Wan, Tui Eunga
Jun. 4 Cha-Lui: Touching the Sky (Thailand) N/A Nachat Janthapan
2H Pyeongan-do (China) Jang Yoon-hyun Hwang Ri Sing, Ddairirun
2H Final Recipe (China) Kim Jin-ah Henry, Yank Ja-kyung
2H Starting Over Again (Vietnam) Roland Nguyen N/A
Note: As of July 2015; Release dates subject to change
Source: Company data, KOFIC, IMDB, KDB Daewoo Securities Research

26
July 27, 2015
Table 15. Major mobile games scheduled for release at Netmarble Games
Developer Release date Title Details
Netmarble Neo
Sep 2015 Epic War Saga Casual RPG
Not decided Project S (tentative) Based on NCsoft’s Lineage 2
Netmarble N2
Oct 2015 Everyone’s Marble (tentative) Co-produced using Disney IP
1Q16 Project Stone Age Begins (tentative) Japanese IP, Mobile version of online Stone Age
Netmarble Npark 3Q15 Idea RPG, Massive guild war
Polygon Games 3Q15 Blade Waltz Action RPG
Tencent 3Q15 We Fire Mobile FPS
Netmarble Blue 4Q15 KON (Knights Of Night) Dual action RPG
EPPSoft 4Q15 ARK Action RPG
Alpaca Games 1Q16 Project Destiny 6 (tentative) Action MORPG
Infinity 2Q16 Project P (tentative) Action RPG
Level9 Not decided Project Glinda (tentative)
Adventure RPG based on Northern European myth, targeted
at overseas gamers
Note: As of July 2015; Dates subject to change; CJ E&M holds a 31% stake in Netmarble Games
Source: Netmarble Games, ThisIsGame, KDB Daewoo Securities Research

27
July 27, 2015
CJ E&M (130960 KQ/Buy/TP: W100,000)
Comprehensive Income Statement (Summarized) Statement of Financial Condition (Summarized)
(Wbn) 12/14 12/15F 12/16F 12/17F (Wbn) 12/14 12/15F 12/16F 12/17F
Revenue 1,233 1,296 1,358 1,414 Current Assets 1,039 1,052 1,129 1,113
Cost of Sales 977 1,010 1,059 1,103 Cash and Cash Equivalents 34 72 101 134
Gross Profit 256 286 299 311 AR & Other Receivables 368 405 423 441
SG&A Expenses 268 247 252 257 Inventories 5 6 6 6
Operating Profit (Adj) -13 38 47 54 Other Current Assets 632 569 599 532
Operating Profit -13 38 47 54 Non-Current Assets 1,318 1,395 1,402 1,412
Non-Operating Profit -37 113 39 49 Investments in Associates 377 453 475 494
Net Financial Income -6 -4 -4 -2 Property, Plant and Equipment 88 91 83 76
Net Gain from Inv in Associates 10 134 41 46 Intangible Assets 695 689 677 670
Pretax Profit -50 151 86 103 Total Assets 2,357 2,447 2,531 2,525
Income Tax 7 37 22 27 Current Liabilities 581 561 581 498
Profit from Continuing Operations -57 114 63 76 AP & Other Payables 215 236 247 257
Profit from Discontinued Operations 290 0 0 0 Short-Term Financial Liabilities 148 155 155 55
Net Profit 233 114 63 76 Other Current Liabilities 218 170 179 186
Controlling Interests 225 115 64 77 Non-Current Liabilities 271 274 275 276
Non-Controlling Interests 9 -1 -1 -1 Long-Term Financial Liabilities 253 253 253 253
Total Comprehensive Profit 228 106 63 76 Other Non-Current Liabilities 18 21 22 23
Controlling Interests 221 107 64 77 Total Liabilities 852 835 856 774
Non-Controlling Interests 8 -1 -1 -1 Controlling Interests 1,510 1,617 1,680 1,757
EBITDA 290 372 371 373 Capital Stock 194 194 194 194
FCF (Free Cash Flow) 176 249 357 340 Capital Surplus 973 973 973 973
EBITDA Margin (%) 23.5 28.7 27.3 26.4 Retained Earnings 316 431 495 572
Operating Profit Margin (%) -1.1 2.9 3.5 3.8 Non-Controlling Interests -4 -5 -5 -6
Net Profit Margin (%) 18.2 8.9 4.7 5.4 Stockholders' Equity 1,506 1,612 1,675 1,751
Cash Flows (Summarized) Forecasts/Valuations (Summarized)
(Wbn) 12/14 12/15F 12/16F 12/17F 12/14 12/15F 12/16F 12/17F
Cash Flows from Op Activities 195 266 362 345 P/E (x) 6.6 27.3 49.1 40.9
Net Profit 233 114 63 76 P/CF (x) 4.4 8.7 8.4 8.3
Non-Cash Income and Expense 104 247 309 301 P/B (x) 1.0 1.9 1.9 1.8
Depreciation 19 14 13 12 EV/EBITDA (x) 4.7 8.2 8.0 7.8
Amortization 284 319 312 307 EPS (W) 5,796 2,967 1,651 1,982
Others -199 -86 -16 -18 CFPS (W) 8,719 9,320 9,611 9,744
Chg in Working Capital -99 -66 15 -4 BPS (W) 39,100 41,864 43,516 45,497
Chg in AR & Other Receivables -66 -35 -19 -17 DPS (W) 0 0 0 0
Chg in Inventories 0 -1 0 0 Payout ratio (%) 0.0 0.0 0.0 0.0
Chg in AP & Other Payables 6 -40 4 3 Dividend Yield (%) 0.0 0.0 0.0 0.0
Income Tax Paid -36 -23 -22 -27 Revenue Growth (%) -1.0 5.1 4.8 4.1
Cash Flows from Inv Activities -640 -281 -353 -238 EBITDA Growth (%) -19.7 28.3 -0.3 0.5
Chg in PP&E -18 -17 -5 -5 Operating Profit Growth (%) - - 23.7 14.9
Chg in Intangible Assets -327 -313 -300 -300 EPS Growth (%) 4,257.9 -48.8 -44.4 20.0
Chg in Financial Assets -413 49 -48 67 Accounts Receivable Turnover (x) 3.3 3.5 3.4 3.4
Others 118 0 0 0 Inventory Turnover (x) 209.5 235.5 230.2 229.4
Cash Flows from Fin Activities 146 7 0 -100 Accounts Payable Turnover (x) 11.7 14.2 13.9 13.9
Chg in Financial Liabilities -52 7 0 -100 ROA (%) 10.2 4.7 2.5 3.0
Chg in Equity 0 0 0 0 ROE (%) 16.4 7.4 3.9 4.5
Dividends Paid 0 0 0 0 ROIC (%) -1.4 3.2 3.7 4.4
Others 198 0 0 0 Liability to Equity Ratio (%) 56.6 51.8 51.1 44.2
Increase (Decrease) in Cash -299 39 28 33 Current Ratio (%) 178.9 187.4 194.3 223.3
Beginning Balance 332 34 72 101 Net Debt to Equity Ratio (%) -7.5 -6.0 -10.0 -13.1
Ending Balance 34 72 101 134 Interest Coverage Ratio (x) -0.8 2.6 3.1 4.1

28
July 27, 2015
Rights offering for full-ownership in Megabox
J Contentree, a media firm in the JoongAng Media Network (JMnet), has four business
units: theater franchise, broadcast, magazine, and other. Its theater franchise subsidiary,
Megabox, accounts for the bulk of the company’s revenue and cash flow, and thus can
be said to serve as a tentpole.
J Contentree decided to acquire Korea Multiplex Investment (KMIC), the largest
shareholder of Megabox. The acquisition is expected to push up its stake in Megabox
from 46.3% to 97.9%. To finance the acquisition, J Contentree will carry out a rights
offering (43mn shares) on August 11th
. With the offering price set at W3,430 per share,
the company is expected to raise W147.49bn.
Multiplex and TV content—two mainstays—offer stability and growth
J Contentree’s mainstay businesses are the movie theater franchise and TV content. Its
magazine and other (mainly performance) businesses are undergoing restructuring.
We believe the acquisition of Megabox will provide growth potential to the company’s
businesses. Megabox has delivered an OP margin of around 17% over the past three
years, and the acquisition will give the company stronger control over the theater chain.
On the domestic front, Megabox plans to aggressively expand the number of theaters,
but the expansion will likely involve mostly small- to mid-sized theaters to control risks.
The company is also considering expanding its business overseas, including China,
Southeast Asia, and South America.
Another subsidiary, Drama House and J Content Hub (created after the merger of
Drama House and J Content Hub), handles the company’s TV content business. Drama
House was one of Korea’s major drama production companies, creating dramas for its
affiliate JTBC as well as providing dramas to terrestrial channels. J Content Hub had
distributed and sold rights for JTBC content. The combined entity is seeing an increase
in domestic VOD revenue in line with an increase in the number and popularity of
programs at JTBC. The company recently began co-production with Chinese partners. It
is expected to enjoy accelerating growth in line with the growth of JTBC.
Upgrade to Buy; Raise TP to W6,000
We upgrade our investment rating on J Contentree to Buy (from Trading Buy) and raise
our target price to W6,000 (from W4,700). In light of changes to the firm’s business
strategies, we upped our valuation multiples for the theater business’s operating value.
Our target price is based on the number of shares after the rights offering, as the shares
are currently trading ex-rights and the offering price has already been set.
J Contentree (036420 KQ)
Theater franchise and TV content to drive growth
FY (Dec.) 12/12 12/13 12/14 12/15F 12/16F 12/17F
Revenue (Wbn) 393 380 394 398 411 423
OP (Wbn) 43 38 35 39 45 48
OP margin (%) 10.9 10.0 8.9 9.8 10.9 11.3
NP (Wbn) 12 -10 0 12 13 13
EPS (W) 177 -152 -1 178 196 204
ROE (%) 13.2 -11.1 -0.1 12.3 12.0 11.1
P/E (x) 19.3 - - 27.8 25.3 24.3
P/B (x) 2.3 2.6 2.1 3.1 2.7 2.5
Note: All figures are based on consolidated K-IFRS; NP refers to net profit attributable to controlling interests
Media
(Upgrade) Buy
SharePrice(07/24/15,W) 4,955
ExpectedReturn 21%
OP (15F, Wbn) 39
EPS Growth (15F, %) -
P/E (15F, x) 27.8
KOSDAQ 776.26
Market Cap (Wbn) 344
Free Float (%) 66.2
Beta (12M) 1.74
52-Week Low 2,833
52-Week High 5,660
(%) 1M 6M 12M
Absolute 30.9 60.7 48.2
Relative 25.9 22.0 6.9
70
90
110
130
150
170
190
7.14 11.14 3.15 7.15
Jcontentree KOSDAQ

29
July 27, 2015
Earnings outlook
J Contentree is expected to see stronger improvement in margins than revenue this
year. Revenue from the magazine and other businesses is likely to decrease due to
restructuring, but the restructuring should positively affect the company’s overall
margins going forward.
The theater franchise business is expected to grow this year. With the COEX mall
remodeling completed at the end of last year, ticket sales at the flagship COEX theater
should increase. Revenue will likely expand further starting next year due to J
Contentree’s acquisition of full ownership. On the domestic front, Megabox plans to
aggressively expand the number of theaters, but the expansion will likely involve mostly
small- to mid-sized theaters to control risks. The company is also considering expanding
its business overseas, including China, Southeast Asia, and South America.
The environment for the TV content business is improving. Recently, following the end
of its hit drama series Beloved Eun-dong, JTBC began airing a web cartoon-based drama
titled Last. Another web cartoon-based drama is in the pipeline, and a drama to be
provided to a terrestrial TV channel is scheduled for production in 2H.
In addition, since 2Q, JTBC has been co-producing a popular entertainment program
with a Chinese partner, iQiyi. The program was first aired on July 16th
on Dragon
Television in China and is expected to generate revenue in 2Q and 3Q. J Contentree is
also expected to pursue co-production of other popular programs with Chinese partners.
Table 16. Earnings trend and forecast (Wbn, %)
2012 2013 2014 2015F 2016F
Revenue 393 401 394 398 411
Film 203 219 232 245 256
Broadcast 80 104 98 105 107
Magazine 65 56 52 48 48
Other 60 40 24 12 12
Proportion
Film 51.7 54.6 58.9 61.6 62.3
Broadcast 20.3 26.0 24.8 26.3 26.1
Magazine 16.6 13.9 13.2 12.1 11.7
Other 15.1 9.9 6.2 3.1 2.8
Operating profit 43 37 35 39 45
Film 35 38 38 41 41
Broadcast 5 8 -3 -2 3
Magazine 5.2 -0.1 0.3 0.2 0.2
Other -1.3 -2.3 -1.5 -0.7 -0.2
Proportion
Film 82.9 101.0 109.2 104.3 90.9
Broadcast 12.8 20.7 -8.1 -5.3 7.1
Magazine 12.1 -0.1 0.7 0.6 0.5
Other -3.1 -6.3 -4.3 -1.9 -0.5
OP margin 10.8 9.3 8.8 9.9 11.0
Net profit 24 4 15 25 27
Net margin 6.2 0.9 3.7 6.2 6.5
YoY
Revenue 2.0 -1.7 0.9 3.2
Film 7.7 6.0 5.5 4.5
Broadcast 30.8 -6.2 7.0 2.3
Magazine -14.6 -7.2 -7.4 0.0
Other -33.5 -38.3 -50.0 -5.0
Operating profit -12.1 -7.0 13.3 14.2
Film 7.0 0.6 8.3 -0.5
Broadcast 42.7 TTR RR TTB
Magazine TTR TTB -7.4 0.0
Other 74.6 -35.9 -51.1 -68.3
Net profit -84.8 291.9 71.3 6.8
Note: All figures are based on consolidated K-IFRS; Net profit is attributable to controlling and noncontrolling
interests, TTR, TTB and RR refer to “turn to red”, “turn to black” and “remain red” respectively

30
July 27, 2015
Valuation
We upgrade our investment rating on J Contentree to Buy (from Trading Buy) and raise
our target price to W6,000 (from W4,700).
In light of changes to the firm’s business strategies, we upped our valuation multiples for
the theater business’s operating value. Our target price is based on the number of shares
after the rights offering, as the shares are currently trading ex-rights and the offering
price has already been set.
Table 17. Calculation of target price
Operating value (Wbn) 771
2015F NP P/E (x)
Megabox 30 25.3 758
CJ CGV’s average P/E during 2012-
2013
Broadcasting 1 13.0 13
SBS Contents Hub’s average P/E
during 2012-2013
Investment value (Wbn) 27
Listed stock
Unlisted stock 1 Book value as of end of 1Q15
Investment in associated firms 11 Book value as of end of 1Q15
Real estate 15 Book value as of end of 1Q15
Total asset value (Wbn) 798
Net debt (Wbn) 133 Consolidated at the end of 1Q15
Net asset value (Wbn) 666
Number of shares outstanding
(‘000 shares)
112,330 * After rights issue on Aug. 11
Target price (W) 6,000 Rounded
Note: Our target price is based on the number of shares after the rights offering, as the shares are currently trading
ex-rights and the offering price has already been set (rights offering to be listed on Aug. 11th
)
Table 18. J Contentree’s rights offering
Details
# of new shares 43,000,000
Face value (W) 500
# of outstanding shares before rights offering 69,330,457
Offering price (W) 3,430
Capital to be raised (W) 147,490,000,000
Subscription date for existing shareholders Jul.23-24
Payment for new shares Jul.31
Delivery date of new shares Aug.10
Listing of new shares Aug.11
New shares per existing share 0.633908777
# of outstanding shares after rights offering 112,330,457
Note: Based on the company’s disclosure on July 21st
Table 19. J Contentree’s KMIC acquisition
Details
Acquisition value 152,000,000,000
# of acquired shares 1,585,653
Objective Secure management control
Scheduled date for acquisition Jul.31
Payment method Cash (to be financed via rights offering)

31
July 27, 2015
Jcontentree (036420 KQ/Buy/TP: W6,000)
(Wbn) 12/14 12/15F 12/16F 12/17F (Wbn) 12/14 12/15F 12/16F 12/17F
Revenue 394 398 411 423 Current Assets 160 192 227 263
Cost of Sales 206 209 215 222 Cash and Cash Equivalents 51 82 113 146
Operating Profit (Adj) 35 39 45 48 Other Current Assets 47 48 49 50
Operating Profit 35 39 45 48 Non-Current Assets 321 315 311 306
Non-Operating Profit -12 -1 -3 -5 Investments in Associates 11 11 12 12
Net Financial Income -4 0 0 0 Property, Plant and Equipment 120 114 108 101
Net Gain from Inv in Associates 2 0 0 0 Intangible Assets 82 81 81 80
Pretax Profit 23 38 42 43 Total Assets 481 507 538 570
Profit from Continuing Operations 15 25 27 28 AP & Other Payables 48 49 50 52
Profit from Discontinued Operations -1 0 0 0 Short-Term Financial Liabilities 112 112 112 112
Net Profit 15 25 27 28 Other Current Liabilities 57 58 60 61
Controlling Interests 0 12 13 13 Non-Current Liabilities 98 99 99 100
Non-Controlling Interests 15 13 14 15 Long-Term Financial Liabilities 78 78 78 78
Total Comprehensive Profit 15 25 27 28 Other Non-Current Liabilities 20 21 21 22
Controlling Interests 0 0 0 0 Total Liabilities 316 317 321 325
Non-Controlling Interests 15 24 27 28 Controlling Interests 90 102 115 128
FCF (Free Cash Flow) 30 42 44 45 Capital Surplus 48 48 48 48
Operating Profit Margin (%) 8.9 9.8 10.9 11.3 Non-Controlling Interests 75 88 102 117
Net Profit Margin (%) 0.0 3.0 3.2 3.1 Stockholders' Equity 165 190 217 245
(Wbn) 12/14 12/15F 12/16F 12/17F 12/14 12/15F 12/16F 12/17F
Cash Flows from Op Activities 55 47 49 50 P/E (x) - 27.8 25.3 24.3
Net Profit 15 25 27 28 P/CF (x) 3.0 5.6 5.3 5.1
Amortization 11 11 11 11 EPS (W) -1 178 196 204
Others 30 12 13 14 CFPS (W) 1,002 882 938 964
Chg in Working Capital 1 0 0 0 BPS (W) 1,438 1,617 1,812 2,016
Chg in AR & Other Receivables 5 -1 -2 -2 DPS (W) 0 0 0 0
Chg in Inventories -2 0 0 0 Payout ratio (%) 0.0 0.0 0.0 0.0
Chg in AP & Other Payables -9 0 1 1 Dividend Yield (%) 0.0 0.0 0.0 0.0
Income Tax Paid -8 -13 -15 -15 Revenue Growth (%) 3.7 1.0 3.3 2.9
Cash Flows from Inv Activities -27 -16 -18 -18 EBITDA Growth (%) -6.6 7.0 9.8 4.5
Chg in PP&E -25 -5 -5 -5 Operating Profit Growth (%) -7.9 11.4 15.4 6.7
Chg in Intangible Assets -8 -10 -10 -10 EPS Growth (%) - - 10.1 4.1
Chg in Financial Assets 7 -1 -3 -3 Accounts Receivable Turnover (x) 6.9 7.7 7.8 7.8
Others -1 0 0 0 Inventory Turnover (x) 60.3 53.7 54.2 54.2
Cash Flows from Fin Activities -34 0 0 0 Accounts Payable Turnover (x) 9.3 10.1 10.3 10.2
Chg in Financial Liabilities - - - - ROA (%) 2.9 5.0 5.2 5.1
Chg in Equity 3 0 0 0 ROE (%) -0.1 12.3 12.0 11.1
Dividends Paid -5 0 0 0 ROIC (%) 10.0 11.4 13.4 15.0
Others - - - - Liability to Equity Ratio (%) 191.3 167.2 148.3 132.8
Beginning Balance 56 51 82 113 Net Debt to Equity Ratio (%) 78.7 52.2 31.0 13.9
Ending Balance 51 82 113 146 Interest Coverage Ratio (x) 3.3 0.0 0.0 0.0

32
July 27, 2015
Showbox announces the start of the summer movie season
Showbox is the film distribution arm of Orion Group (established in 1999, formerly
known as Mediaplex). The history of the company is practically the history of the Korean
movie industry itself, with all of the current representatives of major Korean film studios
(including CJ E&M and NEW) having worked at Showbox before.
We believe the second half of this year will mark a watershed period for the firm. First of
all, its tentpole movie Assassination has gotten off to a good start. Having the same
director as the former blockbuster Thieves, the movie topped the box office right after
its July 22nd
release. Moreover, the company’s cooperation with Huayi Brothers of China
has begun to pick up speed, which will likely affect the firm’s long-term business results.
Dual engines (China + domestic) to power growth
In 2007, the film distributor sold off its theater business, Megabox. As film distribution
tends to be riskier than theater operation, the firm has been focusing on improving
earnings stability by building around two tentpoles into its total annual lineup of roughly
10 movies.
In March of this year, Showbox entered an exclusive partnership agreement with Huayi
Brothers. We believe the addition of the Chinese operation will help expand the
company’s horizon beyond the limitations of the domestic market. Under the
agreement, Showbox will establish Showbox China, and produce at least six movies over
the next three years to be released in China. Production on two of those movies has
already broken ground, and one of them (based on the storyline of an existing Korean
movie and adapted to cater to Chinese viewers) may be released as early as the end of
this year. The other is a longer-term project, as it has been geared to the Chinese market
from the earliest planning stages.
Initiate coverage with Trading Buy and TP of W10,000
We initiate our coverage of Showbox with a Trading Buy rating and target price of
W10,000. The current share price seems to reflect anticipations of 1) positive outcomes
from the business partnership with Huayi Brothers and 2) success for the new release
Assassination.
Showbox’s growth is likely to receive a boost from the firm’s overseas expansion, as well
as from the increasing adoption of the tentpole strategy in the domestic film industry.
We may revisit our valuation based on the box office results of other films slated for
release this year, the quality of next year’s lineup, and progress in the Chinese operation.
Showbox (086980 KQ)
A living witness to Korean movie industry development
FY (Dec.) 12/12 12/13 12/14 12/15F 12/16F 12/17F
Revenue (Wbn) 88 107 72 93 98 101
OP (Wbn) 10 5 2 6 6 6
OP margin (%) 11.4 4.7 2.8 6.5 6.1 5.9
NP (Wbn) -5 2 -2 4 6 6
EPS (W) -79 38 -27 64 91 95
ROE (%) -4.7 2.3 -1.6 3.8 5.1 5.1
P/E (x) - 84.3 - 134.3 94.7 90.2
P/B (x) 1.0 1.9 2.8 4.9 4.7 4.5
Note: All figures are based on non-consolidated K-IFRS
Media
(Initiate) Trading Buy
SharePrice(07/24/15,W) 8,580
ExpectedReturn 17%
OP (15F, Wbn) 6
EPS Growth (15F, %) -
P/E (15F, x) 134.3
KOSDAQ 776.26
Market Cap (Wbn) 537
Free Float (%) 42.5
Beta (12M) 1.25
52-Week Low 3,060
52-Week High 8,740
(%) 1M 6M 12M
Absolute -1.8 49.5 125.2
Relative -5.6 13.5 62.4
60
110
160
210
260
7.14 11.14 3.15 7.15
Showbox Corp. KOSDAQ

33
July 27, 2015
Earnings outlook and valuation
For film distributors like Showbox, the quality and outcome of product lineups are key
earnings variables. Showbox’s tentpole lineup includes action movies (for the summer
movie season) as well as historical period dramas/historical fiction movies (targeting
major holiday seasons).
Revenue and operating profit are anticipated to expand YoY. Last year, Showbox movies
drew less than 20mn viewers due to the impact of the ferry disaster on consumer
sentiment as well as a lack of box office hits. Since early this year, however, growth has
been robust, with revenue expanding 92% YoY in 1Q. Gangnam 1970, Detective K:
Secret of the Lost Island, and Whiplash were major earnings contributors in 1Q, while in
2Q, The Classified File contributed to earnings growth. For 3Q and 4Q, Assassination and
The Throne (to be released during the fall holiday season), respectively, are projected to
boost growth.
We initiate our coverage of Showbox with a Trading Buy rating and target price of
W10,000. In view of the high earnings volatility of the film distribution business, we used
the price-to-sales ratio in calculating our target price.
Table 20. Earnings trend and forecast (Wbn, %)
2012 2013 2014 2015F 2016F
Revenue 88 107 72 93 98
Domestic – Film screening 77 91 54 75 74
Domestic – IP 8 9 14 15 16
Exports 2 4 3 3 7
Other 1 3 1 1 1
OP 10 5 2 6 6
OP margin 11.0 5.1 2.5 6.5 6.2
Net profit -5 2 -2 4 6
Net margin -5.6 2.2 -2.4 4.3 5.8
YoY
Revenue 21.5 -32.6 28.9 5.6
Domestic – Film screening 17.9 -40.7 38.5 -0.2
Domestic – IP 9.4 54.7 2.7 10.0
Exports 123.2 -29.6 10.0 126.7
Other 283.4 -58.8 -48.1 -0.2
OP -44.1 -66.5 233.8 0.5
Net profit TTB TTR TTB 41.6
Major assumptions
Number of admissions
(‘000 persons)
24,739 29,169 16,070 23,140 23,302
Major titles
The Thieves,
Nameless
Gangster:
Rules of the
Time
The Face
Reader,
Mr. Go,
Secretly,
Greatly
Kundo: Age of
the Rampant,
The Divine
Move
Assassination
The Throne
Co-
productions
with China
Note: Based on non-consolidated IFRS

34
July 27, 2015
Table 21. Calculation of target price
Operating value (Wbn) 538
2015F revenue P/S (x)
Film investment and distribution 93 5.8 538 Highest P/S during 2012-2015
Investment asset value (Wbn) 33
Listed stock -
Unlisted stock 12 Book value as of end of 1Q15
Investment in associated firms 21 Book value as of end of 1Q15
Real estate -
Total asset value (Wbn) 571
Net debt (Wbn) -53
Net asset value (Wbn) 624
Number of shares outstanding
(‘000 shares) 62,400
Target price (W) 10,000 Rounded
Note: In view of the high earnings volatility of the film distribution business, we used the price-to-sales ratio in
calculating our target price; Profit growth expected to turn positive this year
Source: KDB Daewoo Securities Research estimates
Company overview and earnings variables
Showbox has grown alongside the Korean film industry. Orion Group launched its
theater business in 1999 when the Korean movie industry started to blossom, and then
expanded to film investment and distribution in 2002. Around 2007, when multiplexes
became widespread, the company sold off its theater operation. Now, with annual movie
attendance in Korea reaching 200mn and the Chinese movie market starting to expand
in earnest, Showbox has formed a partnership with a Chinese film studio.
The quality of movie lineups is particularly important for film distributors like Showbox,
which lack their own theaters. Thus, whether such distributors secure strong lineups
warrants close monitoring by investors.
As for the Chinese operation, Showbox will establish Showbox China and produce at
least six movies over the next three years to be released in China. In the country, the
company seems to be taking a two-pronged approach: 1) movies based on existing
Korean storylines, adapted to Chinese viewers, and 2) so-called “made in China” movies,
with content targeted to the local market from the earliest planning stages. Progress in
these projects should determine the firm’s approach to the Chinese market and help set
the trend of Sino-Korean partnerships in the film industry more generally.
Table 22. Major film distribution lineup for 2015
Release date Title Director Main cast
Jan. 21 Gangnam 1970 Yoo Ha Lee Min-ho, Kim Rae-won
Feb. 11
Detective K: Secret of the
Virtuous Widow
Kim Seok-yoon Kim Myung-min, Oh Dal-su
Mar. 12 Whiplash (foreign/distribution) Damien Chazelle Miles Teller, J. K. Simmons
May 7 Love Clinic (distribution) Kim Aa-ron Oh Ji-ho, Kang Ye-won
Jun. 18 The Classified File Kwak Kyung-taek Kim Yoon-seok, Yu Hae-jin
Jul. 22 The Assassination Choi Dong-hoon
Jeon Ji-hyun, Lee Jung-jae, Ha
Jung-woo
In Sep. The Throne Lee Jun-ik
Song Gang-ho, Yu Ah-in, Moon
Geun-young
2H Prosecutor’s Supplementary Story Lee Il-hyung Hwang Jung-min
2H In The Mood For Love Jo Kyu-jang Moon Chae-won, Yu Yeon-seok
2H Summer snow Jeon Yoon-soo
Ji Jin-hee, Seong Yu-ri, Kim Seong-
gyun
2H A Man and A Woman Lee Yoon-gi Jeon Do-yeon, Gong Yu
2H The Insiders Woo Min-ho
Lee Byung-hun, Jo Seung-woo,
Baek Yun-sik
2H
The Age of Adaline
(foreign/distribution)
Lee Toland Krieger Blake Lively, Michiel Huisman
Note: As of Jul. 2015; For films not in italics, Showbox served as the main investor and distributor; Release dates
subject to change
Source: KOFIC, Company data, KDB Daewoo Securities Research

35
July 27, 2015
Figure 24. Business plan with China’s Huayi Brothers

36
July 27, 2015
Showbox (086980 KQ/Trading Buy/TP: W10,000)
(Wbn) 12/14 12/15F 12/16F 12/17F (Wbn) 12/14 12/15F 12/16F 12/17F
Revenue 72 93 98 101 Current Assets 91 145 200 255
Cost of Sales 62 78 83 86 Cash and Cash Equivalents 17 49 99 150
Operating Profit (Adj) 2 6 6 6 Other Current Assets 66 86 91 94
Operating Profit 2 6 6 6 Non-Current Assets 50 11 -35 -83
Non-Operating Profit -4 -2 0 0 Investments in Associates 21 28 29 30
Net Financial Income 1 0 0 0 Property, Plant and Equipment 0 0 0 0
Net Gain from Inv in Associates 0 0 0 0 Intangible Assets 1 -48 -97 -146
Pretax Profit -2 4 6 6 Total Assets 141 156 164 172
Profit from Continuing Operations -2 4 6 6 AP & Other Payables 6 8 8 8
Profit from Discontinued Operations 0 0 0 0 Short-Term Financial Liabilities 0 0 0 0
Net Profit -2 4 6 6 Other Current Liabilities 31 40 42 44
Controlling Interests -2 4 6 6 Non-Current Liabilities 0 0 0 0
Non-Controlling Interests 0 0 0 0 Long-Term Financial Liabilities 0 0 0 0
Total Comprehensive Profit -1 4 6 6 Other Non-Current Liabilities 0 0 0 0
Controlling Interests -1 4 6 6 Total Liabilities 37 48 50 52
Non-Controlling Interests 0 0 0 0 Controlling Interests 104 108 114 120
FCF (Free Cash Flow) -45 43 52 53 Capital Surplus 36 36 36 36
Operating Profit Margin (%) 2.8 6.5 6.1 5.9 Non-Controlling Interests 0 0 0 0
Net Profit Margin (%) -2.8 4.3 6.1 5.9 Stockholders' Equity 104 108 114 120
(Wbn) 12/14 12/15F 12/16F 12/17F 12/14 12/15F 12/16F 12/17F
Cash Flows from Op Activities -44 43 52 53 P/E (x) - 134.3 94.7 90.2
Net Profit -2 4 6 6 P/CF (x) 5.6 10.1 9.8 9.7
Amortization 49 49 49 49 EPS (W) -27 64 91 95
Others 5 0 0 0 CFPS (W) 834 849 878 882
Chg in Working Capital -98 -10 -2 -1 BPS (W) 1,672 1,736 1,827 1,922
Chg in AR & Other Receivables 6 -1 0 0 DPS (W) 0 0 0 0
Chg in Inventories 0 0 0 0 Payout ratio (%) 0.0 0.0 0.0 0.0
Chg in AP & Other Payables -17 1 0 0 Dividend Yield (%) 0.0 0.0 0.0 0.0
Income Tax Paid 0 0 0 0 Revenue Growth (%) -32.7 29.2 5.4 3.1
Cash Flows from Inv Activities 32 -5 -1 -1 EBITDA Growth (%) -17.7 7.8 0.0 0.0
Chg in PP&E 0 0 0 0 Operating Profit Growth (%) -60.0 200.0 0.0 0.0
Chg in Intangible Assets 0 0 0 0 EPS Growth (%) - - 42.2 4.4
Chg in Financial Assets 35 -5 -1 -1 Accounts Receivable Turnover (x) 8.2 17.1 15.5 15.4
Others -3 0 0 0 Inventory Turnover (x) 0.0 0.0 0.0 0.0
Cash Flows from Fin Activities 0 0 0 0 Accounts Payable Turnover (x) 6.3 21.6 19.8 19.7
Chg in Financial Liabilities - - - - ROA (%) -1.1 2.7 3.5 3.5
Chg in Equity 0 0 0 0 ROE (%) -1.6 3.8 5.1 5.1
Dividends Paid 0 0 0 0 ROIC (%) 7.2 19.3 -38.3 -8.7
Others - - - - Liability to Equity Ratio (%) 35.5 44.2 44.2 43.3
Beginning Balance 30 17 49 99 Net Debt to Equity Ratio (%) -21.2 -51.6 -92.8 -131.5
Ending Balance 17 49 99 150 Interest Coverage Ratio (x) 0.0 0.0 0.0 0.0

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