GRAVITY Co Ltd

(GRVY) January 24, 2010

Figures in Millions except per share values
Company Overview
Gravity Co., Ltd. (Gravity) is engaged in developing and distributing online games and other related businesses principally in the Republic of Korea and other countries in
Asia, North and South America, and Europe based on the number of peak concurrent users (PCU). The Company�s principal product, Ragnarok Online, is commercially
offered in Korea and 37 other countries and markets. Requiem is offered in Korea, the United States, Canada and 15 other countries. Emil Chronicle Online is offered in
Korea, Thailand, Hong Kong and Taiwan. R.O.S.E. Online is offered in the United States, Canada and Mexico. Pucca Racing is offered in Korea and Thailand. Its
subsidiaries include NeoCyon, Inc., Gravity Interactive, Inc., GungHo Online Entertainment, Inc. and Heartis, Inc.

Valuation
Current Price $ 1.67 Margin of Safety 5 Year Historical Price vs Intrinsic Value
14
NCAV $ 1.41 -16%

Total Net Reprod. Cost $ 1.57 -6% 12

Earnings Power Value (EPV) $ 3.47 108%
10
Discounted Cash Flow (DCF) $ 2.43 45%

Ben Graham Formula $ 0.20 -88% 8

6
Key Statistics Valuation Ratios
4
Market Cap (millions) $ 46.42 P/E (TTM) 5.5
52-Week High $ 2.63 P/S (TTM) 0.9 2
52-Week Low $ 0.53 P/B (MRQ) 0.6
0
% off 52-Week Low 215% P/Tang. BV (MRQ) 0.8
FCF/EV (TTM) 16.6% 1/19/2010
3/16/2009
5/12/2008
7/9/2007
9/5/2006
10/31/2005
Cash Flows P/FCF (TTM) 0.0
Owner Earnings FCF EV/Sales (TTM) -0.3 Historical Price Intrinsic Value Buy Price
Owner Earnings FCF Avg Grwth 0.0% EV/FCF (TTM) 6.0
FCF
FCF Avg Grwth 0.0% Margins & Profitability Balance Sheet
Gross Cash and Equiv $ 41.60
Effectiveness Gross Margin Short-Term Investments $ 7.60
CROIC Operating Accts Rec $ 5.12
CROIC Avg -11.1% Operating Margin Inventory $ -
FCF/S Net Profit Total Current Assets $ 56.81
FCF/S Avg -11.5% Net Margin Net PP&E $ 2.90
ROA Intangibles $ 9.87
ROA Avg -2.9% Financial Strength (MRQ) Total Assets $ 75.13
ROE Quick Ratio 10.6
ROE Avg -3.7% Current Ratio 10.6 Total Current Liabilities $ 5.60
LT Debt to Equity 0.0 Long-Term Debt $ -
Efficiency Total Debt to Equity 0.0 Total Liabilities $ 15.13
Receivable Turnover (TTM) 8.5
Inventory Turnover (TTM) 0.0
Asset Turnover (TTM) 0.6