Market Review Coway News

IR Webzine 2018. Dec.

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This material includes quarterly development of stock markets, stock prices and related data of Coway, financial status, operating results, and other major issues related to IR. This is aimed to provide a variety of information that could be a reference to shareholders and investors. Therefore, it cannot be the evidential material for legal responsibility regarding investment results of shareholders and investors in any case.

12IR Webzine 2018

December

Market Review_ Stock Market

The KOSPI slid by 2.66% compared with the previous month to 2,041.04 points at the end of December, failing in continuing the rally. In the technical aspect, declining mid- and long-term moving average lines are obstructing the rally and short-term moving average line turned into a weak trend, which shows current stock market is still depressed. Decreasing trading volume trend also represents frozen investment sentiment.

The weak KOSPI in December resulted mainly from 7.8% collapse of the global stock markets as of the MSCI ACWI. The only consolation is that the domestic stock market was

able to escape from the deeper-than-expected plunge of the U.S. stock market. Because negative issues such as U.S-China trade conflict, unfavorable outlooks on corporate earnings, and sluggish economy were already reflected in the stock market.

In January 2019, the stock market seems to remain sluggish. However, intermittent small rally can be made. Because there are increasing consensus that unfavorable factors have already been reflected despite lower-than-expected macroeconomic indices and corporate earnings.

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December

The stock price of Coway fell 5.48% from the previous month to KRW 74,100 at the end of December, taking a breather. As the stock price somewhat recovered the previous level and returned to mid- and long-term average lines, investment sentiment on Coway is gradually stabilizing.

Market Review_ Stock Price

Classification% change of COWAY %change of

Stock Price vs. KOSPI vs. KOSPI200 KOSPI KOSPI200

5 Days -5.73 -4.80 -4.66 -0.93 -1.07

20 Days -3.01 0.45 1.43 -3.46 -4.44

60 Days -13.94 -2.31 -2.29 -11.63 -11.65

12IR Webzine 2018

December

Market Review_ Stock Price

Coway has attained favorable operation performance satisfying market consensus every quarter. Particularly, growth of Malaysia subsidiary and US subsidiary is remarkable. For example, Malaysia subsidiary achieved more than one million customer accounts in December, which will ensure continuous rapid growth going forward. US subsidiary is also enjoying stable growth through sales channel expansion. Moreover, Coway’s commitment to shareholder-friendly policy will calm down market concerns about the change of the largest shareholder.

During December, the number of shares held by foreigners decreased 770,926 shares, or 1.64%, compared with the prior month. As of the end of December, they maintained 62.66% ownership. Domestic institutional investors marked net purchasing of 628,037 shares during the same period.

46,239,820 Shares (62.66%)

(as of December 28, 2018)

Changes in Stock Price in November

-770,926shares

(-1.64%)

-5.48shares

Changes in Shares Held by Foreigners in November

Net Changes in Shares Held by Institutional Investors in November

+628,037shares

12IR Webzine 2018

December

Coway News

Hold the “Eco-friendly Water Bottle Design Idea Contest”

In a bid to disseminate the culture of eco-friendly lifestyle and practice the water love campaign, Coway holds the “Eco-friendly Water Bottle Design Idea Contest” from Dec. 10, 2018 to Jan. 9, 2019 with the launch of an online design community platform named “Water-Feeling Research Center.”

The platform was prepared to share the importance of clean water and will play a role in creating eco-friendly design ideas together with employees and specialists in each field. The Eco-friendly Water Bottle Design Idea Contest is the first project of the platform aimed at establishing the culture of reducing disposables and protecting water environment from microplastics.

Anyone can enter for the contest by uploading photos or videos under one minute which show his or her own concept on water love on YouTube or SNS until Jan. 9, 2019.

Applicants who pass the contest can serve as the member of Water-Feeling Research Center until mid-February 2019. They can also join water bottle design process together with Coway employees who are mentors and receive advices from professionals. Final winners will be announced on mid-February 2019 through impartial judging process and vote on SNS. More details are disclosed on the official SNS account of the Water-Feeling Research Center.

A total of KRW 10 million will be delivered to winners including KRW 5 million for the best team.

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December

Hyun-joo, Song, the head of Coway Design Research Institute, said, “This contest will give applicants meaningful experiences as mentoring process by professionals will ensure higher completeness and effectiveness. Starting with the first project, we will continue to launch a variety of programs with regard to water environment preservation, thereby taking the initiative in disseminating the value of eco friendliness.”

12IR Webzine 2018

December

Coway News

Sign an MOU with the CHEARI to boost entrance into the Chinese market

Coway signed an MOU for strategic business alliance and health appliance technology service with the CHEARI (China Household Electric Appliance Research Institute) in Beijing on December 11. It was promoted to expand business in China by cooperating for the improvement of technical power and product quality.

The CHEARI, established in 1965, engages in testing, certifying, and conducting post-inspection of the national standard certification on home appliances “GB.” It also designs and proposes China’s national standard testing regulations. The GB Mark is one of compulsory certifications Chines home appliances should obtain.

At the ceremony, Sang-hyun Kang, the head of Coway Environmental Technology Research Institute, and Keon-kuk Noh, the head of CHEARI, signed the contract.

Based on the contract, Coway and CHEARI will work closely to obtain the GB Mark for health appliances such as water purifier and air purifier. Human network exchanges including technical training supports will also be actively promoted to enhance product quality.

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December

Sang-hyun Kang, the head of Coway Environmental Technology Research Institute, said, “This contract will give us a good chance to rapidly respond to changes in the Chinese health appliance market and boost our strategic entrance. Going forward, we will focus on enhancing product quality and securing differentiated technical power, thereby increasing our global competitiveness.”

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December

Coway News

- �Ranked top seven times since the first achievement in 2008

- �Highly recognized for the “CODY ON Service” and “Special Care Service” aimed at customer trust

Rank top in the household water purifier sector of the KNPS

Coway named the No.1 brand in the household water purifier sector of the “2018 KNPS (Korean Net Promoter Score)” hosted by KMAC (Korea Management Association Consulting) on December 19.

Coway first ranked top in this sector in 2008 and this is the seventh achievement. As a result, Coway named the best brand in major service quality surveys in Korea including NCSI (National Customer Satisfaction Index), KCSI (Korea Customer Satisfaction Index), and KS-SQI (Korea Standard – Service Quality Index) as well as KNPS.

The KNPS is an index that shows the willingness of customers who have experienced products and services of a company to recommend those to other people. Survey is conducted every year for about 10 thousand consumers living in Seoul, metropolitan area, and six metropolitan cities.

Coway was highly recognized for diverse innovative customer services such as “CODY ON Service” and “Special Care Service.” The “CODY ON Service” allows customers to directly check the status of their products before and after maintenance service through mobile devices. The “Special Care Service” helps water purifier rental customers ensure carefree use by regularly replacing core parts.

Moreover, Coway capitalizes on the IoT technology for real-time product condition checks. The IoT technology-based “IoCare” system provides customers with optimal care solutions customized to their lifestyle by collecting, analyzing, and diagnosing big data on their daily routines.

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December

Hyun-jeong Yoon, the head of CS HQ, said, “Corporate service competence is the fundamental factor when customers choose products or build the relationship with companies. Coway will focus on developing diverse customer-oriented services to gain higher customer trust.”

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December

Coway News

- �Attained one million customer accounts in December 2018 since launching the first rental service in Malaysia in 2007

- �Recorded 70% CAGR in customer accounts for 11 years since 2007

- �On the back of localization strategu-es such as rental service and halal certification

Surpass one million customer accounts in Malaysia

On December 20, Coway announced that the number of customer accounts surpassed one million in Malaysia.

The number of customer accounts of Malaysia subsidiary, established in 2006, has surpassed 4 thousand in 2007, 52 thousand in 2010, 124 thousand in 2012, 293 thousand in 2015, and 680 thousand in 2017. For 11 years, the CAGR reached approximately 70%. In December 2018, it exceeded one million.

This remarkable accomplishment resulted mainly from the success of localization strategies – first introduction of rental service to Malaysian market in 2007, obtainment of the halal certification for water purifier for the first time in 2010, dramatic expansion of the CODY members in 2015, launch of the Coway Run Marathon Tournament in 2017, and operation of the Pure Zone in airports in 2018. These customized strategies have become a driving force of rapid growth.

Coway has shifted the paradigm in the Malaysian water purifier market by initiating rental service and CODY service in 2007, and now demonstrates the largest market share. The company also started the rental service of air purifier and bidet in Malaysia and plans to introduce mattress rental service in the near future. Moreover, professional CODY service is considered as strong competitiveness against late comers.

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December

In 2010, Coway became the first player to obtain the halal certification in the Malaysian water purifier market, thereby succeeding in captivating Muslim customers. As a result, the number of customer accounts of Malaysia subsidiary in 2010 soared 160% year-on-year, the largest ever annual growth rate.

Malaysia subsidiary also contributed to creating more local jobs by recruiting a large number of CODY members in 2015. Currently, more than 123 thousand CODYs (service specialists) and health planners (sales specialists) are working in Malaysia. The CODY is recognized as one of jobs which are most preferred by local housewives.

The Coway Run Marathon Tournament, launched in the previous year with the aim of delivering the value of clean water to local people, has helped the company secure high reliability and friendliness in the market.

The “Live Pure” campaign was initiated this year to boost air purifier business based on the trust established in the local water purifier market. As part of this, Coway installed a total of 73 water purifiers throughout the Kuala Lumpur International Airport to help global people experience clean water. Prior to this, Coway has been installed air purifiers throughout the airport since 2011 and currently a total of 100 air purifiers are operating.

Going forward, Malaysia subsidiary will focus on expanding product lineup to secure more competitiveness and strengthening brand marketing activities. Moreover, Coway will use the success in Malaysia as a steppingstone toward

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December

business expansion to neighboring countries including Indonesia and Vietnam, thereby preoccupying the Southeast Asian market.

Hae-sun Lee, the CEO of Coway, said, “We proved our dominant position in the Malaysian market by achieving more than one million customer accounts. By continuously launching innovative products customized for local needs and offering differentiated professional maintenance services, Coway will emerge into the No.1 brand in the Southeast Asian market beyond Malaysia.”

12IR Webzine 2018

December

Coway News

Participate in the 2019 CES

Coway will participate in the “2019 CES (Consumer Electronics Show)” to be held in Las Vegas from January 8 to 11, 2019. This will be the fourth participation in a row. At the CES, Coway intends to showcase its innovative products and technologies for caring water, air, and living environment, solidifying its status as a well-being home appliances maker in the world.

The CES, hosted by the CTA (Consumer Technology Association) in every January, is the world’s largest home appliances exhibition. It is also recognized as one of the world’s most prestigious electronics and IT shows along with the MWC (Mobile World congress) and IFA (Internationale Funkausstellung).

Coway’s booth will be established under the concept of “Coway that delivers innovative convenience and happiness to daily life, Being Well, Feeling Good.”

The company plans to showcase not only four 2019 CES Award-winning products including “CIROO Tankless Water Purifier” but also diverse products and services that care water, air, and living environment through sophisticated technologies. A total of 33 products in 8 categories including water purifier, air purifier, and bidet will be displayed to help visitors experience innovative products and technologies.

Hae-sun Lee, the CEO of Coway, said, “At the CES, we will introduce our innovative products and technologies which have been developed under the

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December

concept how to contribute to the happiness of customers. We believe those will present a new trend of well-being home appliances. The CES will give us a chance to recognize our leadership in the global market once again.”

12IR Webzine 2018

December

Coway News

Introduce the RPA system for business innovation

Coway introduced the RPA (Robot Process Automation) system to key businesses such as accounting and analysis with the aim of enhancing work efficiency and digital innovation.

The RPA system makes it possible to automatically treat existing simple repetitive tasks such as data gathering through robot software, helping employees focus on value-added works.

Now more than 40 kinds of repetitive works including monitoring of account status, gathering of sales data, check of rental assets status, and inquiry about billing statement are operating by the RPA system, in which a total of 70 robots are being used. As a result, work process speed has improved by approximately 50%.

Coway intends to expand the RPA system to the entire business areas step by step after reviewing the efficiency in a comprehensive manner.

Dong-oh, Nam, the head of Information Strategy Team, said, “The RPA system allows employees to reduce simple repetitive works, thus helping improve working environment and eliminate mistakes and information security risks which can be occurred in the process of manual labor. In line with the digital revolution trend, we will continue to introduce cutting-edge IT technologies to our business, thereby improving the level of business operation and pursuing work-life balance.”

IR Webzine 2018. Dec.