We upgrade Fukuoka Financial Group from In Line to
Outperform in light of its recent underperformance. The
stock has fallen 13.5% on an absolute basis and has
underperformed its regional bank peers by 11.2% since
announcing substantial downward revisions to FY3/08
forecasts and the earnings targets in its medium-term
plan on April 7th.
• We believe Fukuoka Financial Group's downward
revisions serve as a harbinger of the adverse operating
environment that regional banks may face in the near
future, especially in terms of higher credit costs. We
believe the reasons for the lower estimates are not a
surprise and generally apply to its peers as well.
• Our highest conviction Asian Outperform ratings are
Sony FH (8729 JP), China Construction Bank (939 HK)
and Samsung Fire & Marine (000810 KS).
• Our highest conviction Asian Underperform calls are
Resona Holdings (8308 JP), ICBC (1398 HK) and Shinhan
Financial (055550 KS).

TABLE OF CONTENTS
Fukuoka Financial Group – upgrade to Outperform........................................................ 4
Downward revisions of April 7th ....................................................................................................... 4
Share price performance and valuations.......................................................................................... 5
Risks................................................................................................................................................ 8
FY3/09 & FY3/10 earnings ............................................................................................................... 8
Japan banks ....................................................................................................................... 12
Japan insurance................................................................................................................. 14
Japan consumer finance................................................................................................... 16
China banks........................................................................................................................ 18
Korea banks........................................................................................................................ 20
Hong Kong banks .............................................................................................................. 22
Taiwan banks...................................................................................................................... 24
India banks.......................................................................................................................... 26
South-East Asia banks ...................................................................................................... 28
Asia ex-Japan insurance................................................................................................... 30
Asia ex-Japan exchanges ................................................................................................. 32
Valuation and performance summary.............................................................................. 34
Disclosure information ...................................................................................................... 46