Company Visit Note

December 4, 2013

Hyundai Mobis (012330)

12M rating 12M TP Up/downside

Positive Neutral Negative

BUY (Maintain) W350,000from W350,000

+17.4%

Mabuk R&D Center visit

Location: Mabuk Street, Giheung-gu, Yongin-si, Gyeonggi-do, Korea Area: 102,620 square metres, R&D researchers: 1,800 Aside from the car electronics laboratory including the EMC (electromagnetic compatibility) Anechoic Chamber, Mobis showed off its autonomous parking using the Advanced SPAS (smart parking assist system), the worlds second such device developed after Frances Valeo Overseas R&D centers: US, Europe, China (Beijing, Shanghai), India

Stock Data
KOSPI (Dec 4, pt) Stock price (Dec 4, KRW) Market cap (USD mn) Shares outstanding (mn) 52-Week high/low (KRW) 6M avg. daily turnover (USD mn) Free float / Foreign ownership (%) Major shareholders (%) KIA Motors Corp. and 4 others National Pension Service (NPS) 30.2 7.2 1,987 298,000 27,354 97 315,500/246,000 61.1 68.0/49.8

Five R&D divisions

Modules: Chassis, cockpit, front-end Parts: Safety, braking, steering, suspension, lamps, new materials Multimedia: A/V, navigation, connectivity, sound Eco-friendly: Driving motors, inverters, converters, BMS (battery management system), fuel cells, driving devices, chargers Intelligent systems: ADAS (advanced driver assistance system), BBW (brakeby-wire), in-wheel, cameras, sensors

Performance
1M Absolute (%) Relative to KOSPI (%p) (0.5) 1.4 6M 4.9 5.1 12M 6.2 3.6

12MF PE trend
(x) 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 100 0 300 200 12MF PER (LHS) (W' 000) price (RHS) 500 400

R&D vision
2010-2012: Investment focused on preceding technology 2013-2015: Technology ramp-up, strengthening proprietary products lineup -2020: Global top ranking, owning market-leading technology, leading ecofriendly/intelligent parts technology

Implications & Valuation

Amid the fast move toward electrification, Mobis is keeping a constant focus on R&D, especially for eco-friendly and intelligent parts. As such, we believe Mobis will narrow the technology gap with global major component makers at a faster pace. Mobis will also continue to win large orders from other major automakers. We believe Mobis will join the top-five group way ahead of its target. Mobis goal is to become the worlds fifth-largest auto parts company by 2020 from the current eighth. Of note, Kia Motors K9 (US model name K900) will arrive at US dealerships in spring and the model is installed with Mobis adaptive full LED lamp and surround-view monitoring system. We forecast the upcoming LF Sonata will be also equipped with many new products made by Mobis. We maintain BUY and our TP of W350,000 at 9x 12MF PE, a 30% discount to the historical high.
Yr to Dec 2011A 2012A 2013F 2014F 2015F Sales (W bn) 26,295 30,789 33,830 36,458 38,865 OP (W bn) 2,637 2,906 2,903 3,191 3,469 EBT 4,063 4,607 4,572 4,994 5,396 NP 3,023 3,559 3,533 3,859 4,169 EPS (won) 31,046 36,547 36,279 39,628 42,812 % chg EBITDA (YoY) 11.4 17.7 -0.7 9.2 8.0 (W bn) 2,989 3,362 3,389 3,677 3,948 PE EV/EBITDA (x) 9.6 8.2 8.2 7.5 7.0 (x) 9.5 7.6 7.9 7.0 6.2 PB (x) 2.1 1.7 1.4 1.2 1.0 ROE (%) 24.5 23.0 18.8 17.3 15.9

Source: WISEfn consensus

Sung Moon Suh

822-3276-6152 sungmoon.suh@truefriend.com

(W bn) (W bn)

Jin, Man
822-3276-6279 jinman05@truefriend.com

Company Visit Note

Changes to recommendation and price target

Company (Code) Hyundai Mobis (012330) Date 10-28-11 07-27-12 04-26-13 Recommendation BUY BUY BUY Price target W470,000 W400,000 W350,000
500,000 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 Dec-11 Apr-12 Aug-12 Dec-12 Apr-13 Aug-13

Guide to Korea Investment & Securities Co., Ltd. stock ratings based on absolute 12-month forward share price performance BUY: Expected to give a return of +15% or more Hold: Expected to give a return between -15% and 15% Underweight: Expected to give a return of -15% or less Korea Investment & Securities does not offer target prices for stocks with Hold or Underweight ratings.

Guide to Korea Investment & Securities Co., Ltd. sector ratings for the next 12 months Overweight: Recommend increasing the sectors weighting in the portfolio compared to its respective weighting in the Kospi (Kosdaq) based on market capitalization. Neutral: Recommend maintaining the sectors weighting in the portfolio in line with its respective weighting in the Kospi (Kosdaq) based on market capitalization. Underweight: Recommend reducing the sectors weighting in the portfolio compared to its respective weighting in the Kospi (Kosdaq) based on market capitalization.

Analyst Certification I/We, as the research analyst/analysts who prepared this report, do hereby certify that the views expressed in this research report accurately reflect my/our personal views about the subject securities and issuers discussed in this report. I/We do hereby also certify that no part of my/our compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this research report.

Important Disclosures As of the end of the month immediately preceding the date of publication of the research report or the public appearance (or the end of the second most recent month if the publication date is less than 10 calendar days after the end of the most recent month), Korea Investment & Securities Co., Ltd., or its affiliates does not own 1% or more of any class of common equity securities of Hyundai Mobis. There is no actual, material conflict of interest of the research analyst or Korea Investment & Securities Co., Ltd., or its affiliates known at the time of publication of the research report or at the time of the public appearance. Korea Investment & Securities Co., Ltd., or its affiliates has not managed or co-managed a public offering of securities for Hyundai Mobis in the past 12 months; Korea Investment & Securities Co., Ltd., or its affiliates has not received compensation for investment banking services from Hyundai Mobis in the past 12 months; Korea Investment & Securities Co., Ltd., or its affiliates does not expect to receive or intends to seek compensation for investment banking services from Hyundai Mobis in the next 3 months. Korea Investment & Securities Co., Ltd., or its affiliates was not making a market in Hyundai Mobiss securities at the time that the research report was published. Korea Investment & Securities Co., Ltd. does not own over 1% of Hyundai Mobis shares as of December 4, 2013. Korea Investment & Securities Co., Ltd. has not provided this report to various third parties. Neither the analysts covering these companies nor their associates own any shares of as of December 4, 2013. Korea Investment & Securities Co., Ltd. has issued ELW with underlying stocks of Hyundai Mobis and is the liquidity provider. Prepared by: Sung Moon Suh

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