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Investor Relations 2013

ENG133Q_131108. Investor Relations 2013. Contents. Business Sectors Business Expansion Education System Business Model

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Investor Relations 2013

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  1. ENG133Q_131108 Investor Relations2013

  2. Contents • Business Sectors • Business Expansion • Education System • Business Model • Membership & Sales in Online • Offline Infrastructure • High Loyalty & Entry Barrier • Educational expenditure • Growth & Market Size • Sales Breakdown • 2012 FY Performance • Guidance for 2013 Consolidated Performance • 2013 3Q Performance • 2013 3Q AccumulatedPerformance • ConsolidatedI/S & B/S Summary 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

  3. Business Sectors Megastudy Megastudy Subsidiaries • ▪ MegaMD(65%) : www.megamd.co.kr / www.megaut.com • - provide lectures for special graduate school entrance exam • (Medical, Dental, Pharmaceutical, and Law) • - provide contents for University transfer exam • (Merged with MegaUT, Jun 1st. 2013) • ▪ IvyKimyoung(46%) : www.kimyoung.co.kr • - provide contents for University transfer exam • ▪ MegaFood&Service (60%) • - operating food service company for students and employees • ▪ MegaBooks (100%) • - publishing learning materials and textbook supplementary • ▪ HyungsulEdu (100%) • - took over offline school in 2009 and currently operating them • just like other offline institutions of Megastudy • ▪ IL Deung Law School(MegaMD: 90%) • - provide lectures for law school entrance exam • ▪ SE Global (MegaMD: 50%) www.megacst.com • - provide lectures for police employment test • ▪ Megastudy Forever Joint Stock Company(62%) • - running offline schools in Hanoi, Vietnam • ▪ Plus Edu Co., LTD (M.F.J.S.C: 100%) • - running offline schools(2rd) in Hanoi, Vietnam • ▪ MegaInvestment(99%) • - established investment company, searching for the new growth engine • ▪ MegaNext (37%) : www.megahrd.co.kr • - provide job related contents and English contents ▪ High School(on) : www.megastudy.net - provide online lectures for high school students and re-takers Korean SAT - Main ContentsGPA Essay & Interview ▪ High School (off) : developing contents / producing contents - running 9 offline schools in Seoul & Near Seoul Korean SAT - Main ContentsGPA Essay & Interview ▪ Middle School(on) : www.mbest.co.kr - provide online lectures on term-based courses - hiring administrators for each student to communicate their academic improvement with students and parents by phone or e-mail GPA Special courses for elite-high school - Main Contents 6 months : KRW 760,000 12 months: KRW 1,280,000 - Price

  4. Business Expansion SEGlobal Horizontal Expanding Plus Edu Co., LTD MegaInvestment Vertical Expanding IvyKimyoung Merged with MagaMD (Jun 1st. 2013) MegaUT MegaFood&Service Megastudy Forever Joint Stock Company HyungsulEdu ILDeung Law school MegaNext MegaBooks MegaMD High school offline Mbest Mbest Merged (Middle school online) High school online 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

  5. Education System ■ Education System ■ University Entrance Exam - Elementary ……. 6yrs (Age. 8 ~ 13) - Middle School…. 3yrs (Age.14 ~ 16) - High School……. 3yrs (Age.16 ~ 19) - Undergraduate School - Graduate School Re-takers ▪ Re-takers : students who wish to take KSAT exam once more Applying for University High School University 2 WAYS ▪ Early Application : GPA + KSAT + University Specific Requirement (Essay writing / Interview / Language, Math, Science expertise, etc) ▪ Regular Application : GPA + KSAT + University Specific Requirement (Essay writing / Interview)

  6. Business Model ■Megastudy Offline ■ Megastudy Online Filming Editing Uploading - Single subject class - 2~3 months (1,000 min.) - 10 ~ 15 Chapters - VOD type service • Single subject class • 2 months (8weeks) • 2~3hrs / week • 16 ~20 hrs 1/3 \ 190,000 \ 65,000 ■Lecturers ■Virtuous Cycle ▪ Contract with lecturers on the commission basis On : 23% Off : 50% Tighten up on keen competition Increase traffic Outcome of superb contents ▪ No. of lecturers in high school offline & online Outcome of superb contents Tighten up on keen competition Online (110) Offline (510) Popular lectures Expert lecturers

  7. Membership & Sales in Online ■ High School Online Sales Trend ■ Penetration (2012) High School ■ Penetration (2012) ■ Middle School Online Sales Trend Middle School

  8. Seoul Offline Infrastructure ▪ Launched in 2008 ▪ High school & Re-takers ▪ Single Subject Class : 1,000 ▪ Re-takers Class : 700 ▪ Launched in 2006 ▪ Re-takers ▪ Capacity : 200 ▪ Launched in 2005 ▪ High school & Re-takers ▪ Single Subject Class : 14,000 ▪ Re-takers Class : 700 Seocho Megastudy Namyangju boarding school Kangbook Megastudy Norayngjin Megastudy Shinchon Megastudy Kangnam Megastudy ▪ Launched in 2004 ▪ High school & Re-takers ▪ Single Subject Class : 12,000 ▪ Re-takers Class : 900 ▪ Launched in 2004 ▪ High school & Re-takers ▪ Single Subject Class : 4,000 ▪ Re-takers Class : 1,000 Yangji boarding school ▪ Launched in 2003 ▪ High school & Re-takers ▪ Single Subject Class : 7,000 ▪ Re-takers Class : 1,050 Gwangju boarding school ▪ Launched in 2010 ▪ Re-takers ▪ Capacity : 750 ▪ Launched in 2008 ▪ Re-takers ▪ Capacity : 500 Pyungchon school ▪ Launched in 2011 ▪ High school & Re-takers ▪ Capacity : 940

  9. High Loyalty & Entry Barrier ■ Target marketing • 5 ~ 6 times per year • College admission convention • generated educational culture • giving out the useful information • about the University admission • (eg. Scoring service, College • application service, etc.) ■ High Entry Barrier Membership • - Tighten up on the keen competition among offline lecturers • produce outcome of superb contents • Offline institution is the place where the high quality of • contents can be produced Contents (Lectures) Offline institution

  10. Educational expenditure ■ Education expenditure of OECD countries ■ Education expenditure of householder < % of GDP > ▪ Spending by households on total education and private education rose by 7.1% and 12.0% p.a respectively for past 10 years.

  11. LEET 5.5 bn MEET/DEET 30.0 bn PEET 40.0 bn Growth & Market Size ■ Special graduate school entrance exam market < Sales Trend of MegaMD> (billion won) MegaMD’sM/S : 75% MegaMD’sM/S : 50% MegaMD’sM/S : 65% ▪Total size of special graduate entrance exam market is estimated by 75.5 bn KRW ▪MegaMD is recording notable achievement and generated 47.0bn KRW sales based on the successful performances in four different business profit centers. ■ University transfer entrance exam market • Megastudy invested 4.3bn in 2010 to acquire “High Top” company to expand business into University transfer entrance exam market and renamed that company to MegaUT. • In addition, Megastudy completed IvyKimyoung’sacquisition in June of 2011 to be attained the dominant player within a short period of time in UT market. • IvyKimyoungcompany was known as no.1 education company in University transfer exam education market. • Total acquisition price was 18.7 bnwon. • Total equity holding of IvyKimyoungis approximately 78%. • ▪ Megastudy 46 % • ▪ MegaMD 12 % • ▪ Mgmt. of MegaMD & Megastudy 20 % < 2011 total number of student recruiting >

  12. Sales Breakdown 2012 2013(E) 2011 2009 2010 25.4% 33.3% Megastudy Subsidiaries 14.9% 38.1% 9.8% 74.6% 85.1% 66.7% 90.2% 61.9% Megastudy

  13. 2012 FY Performance Unit : billion won

  14. Guidance for 2013 consolidated performance Unit : billion won

  15. 2013 3Q Performance Unit : billion won

  16. 2013 3Q AccumulatedPerformance Unit : billion won

  17. Consolidated I/S & B/S Summary ▪ Consolidated I/S ▪ Consolidated B/S Unit : billion won Unit : billion won

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