Asia Pacific Equity Research

04 January 2012

Macro Model for January 2012

The currently favoured factors and stocks for Asia
The Macro Factor Rotation (MFR) Model is again positioned to look for rally candidates: it is still interested in cheap, sold-off names, most from their highs, but now adding a little more risk again by looking for small caps. The MFR model was down about -2% last month, hurt by reversion, but winning back some performance using P/B. The top four factors for January 2012 suggested by the MFR Model: 1. Historical PB stocks that are cheap on P/B 2. % off 52 week high buy those most off their highs 3. Price Reversion 1mth buy what has been sold off 4. Small Caps favour small caps over large Just outside of these top 4 factors sit RSI 10-day and Price Acceleration factors also factors looking for sold-off/turnaround possibilities. The top 4 factors did not see much change in the vote casting from last month, with only a swapping out of RSI 10-day in favour of small caps.
Top voted for Factors for January 2012
Votes 14 10 9 9 8 5 4 4 4 3 Factor Historical P/Book Value Ratio Percent Off 52 Week High 1 Mth Price Momentum Size (Barra) RSI 10 day Price Accel 6M Historical BETA 1 year forward forecast PE Relativ To History e Global Exposure 12 Mth Price Momentum Weighting Vote Change Pos. 0 Neg. 0 Neg. 0 Neg. 0 Neg. -1 Pos. -1 Pos. 0 Pos. -1 Neg. 0 Neg. 0

Asia ex Japan Quantitative Robert Smith

AC

(852) 2800 8569 robert.z.smith@jpmorgan.com

Steve Malin
(852) 2800 8568 steven.j.malin@jpmorgan.com J.P. Morgan Securities (Asia Pacific) Limited

Result of combining a classic static quant model with the Macro Factor Rotation model:
Q-Score static model
1,200 1,000 800 600 400 200 0 Base Nov-02 Nov-03 Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 0% -10% -20% -30% -40% -50% -60% -70% -80% -90% -100%

Macro Factor Rotation (MFR) model

1,200 1,000 800 600 400 200 0 Base Nov-02 Nov-03 Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 0% -10% -20% -30% -40% -50% -60% -70% -80% -90% -100%

Source: Bloomberg, Thomson Reuters, MSCI, J.P. Morgan

Combined 50:50 model

1,200 1,000 800 600 400 200 0 Base Nov-02 Nov-03 Nov-04 Nov-05 Nov-06 Nov-07 Nov-08 Nov-09 0% -10% -20% -30% -40% -50% -60% -70% -80% -90% -100%

Performance last month: The High Conviction MFR screen in last months report came in under water. It did poorly with the reversion, but well with the P/B bias the performance of the standalone MFR screen last month was a -2.0% L/S. In combination with our Q-Score (i.e. the 50:50 model) it returned -5.1% L/S for December 2011. Our recent reports on this topic: Measuring the Macro Impact on Factor Performance, Smith/Malin, December 2010: This report is a reference guide, or Rulebook, for which factors work better (or worse) during different macro states. Style Timing using Macro Indicators, Smith/Malin, December 2010: In this we tested an approach that uses such a Rulebook to switch between factors depending on the macro environment as determined by our rules of thumb for assessing environment states.

Source: Thomson Reuters, MSCI, J.P. Morgan

Note the improved performance through the macro years, namely post 2007. The Macro Factor Rotation model did much better as it was able to exploit risk factors (size, volatility, beta etc) in addition to alpha factors. It also uses more cyclical alpha factors not suitable for static quant models (such as dividend yield, Percent off High, PE relative to history etc).

See page 5 for analyst certification and important disclosures, including non-US analyst disclosures.
J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. www.morganmarkets.com

Robert Smith (852) 2800 8569 robert.z.smith@jpmorgan.com

Asia Pacific Equity Research 04 January 2012

Macro Model for January

Looking for potential rally candidates
Each month we highlight the factors that the MFR model is favouring (and to use the terminology of prior work we are using tradable states and our current 2010 Rulebook in this model). The Macro Factor Rotation (MFR) Model is again positioned to look for rally candidates: it is still interested in cheap, sold-off names, most from their highs, but now adding a little more risk again by looking for small caps. Environment states currently active There are 31 active environments for January according to our tradable heuristics.
Table 1: Tradable active states for January 2012
Environment Asian Dollar Index, Falling Asian Dollar Index, Low Asian Dollar Index, Post-Peak Copper Spot, Low Copper Spot, Post-Trough Dividend Yield, Falling Dividend Yield, High Dividend Yield, Post-Peak Fed Rate, Rising Fed Rate, Post-Trough MSCI AxJ Volume, Falling MSCI AxJ Volume, Low MSCI AxJ Volume, Post-Peak MSCI AxJ, Rising MSCI AxJ, Low MSCI AxJ, Post-Trough Oil Gold Ratio, Rising Oil Gold Ratio, Post-Trough PMI Manufacturing Index/Inventory, Rising PMI Manufacturing Index/Inventory, Post-Trough TED Spread, Rising TED Spread, High US Gov Bond 10yr Yield, Rising US Gov Bond 10yr Yield, Low US Gov Bond 10yr Yield, Post-Trough US GOV Bond 3/10YR Spread, Rising US GOV Bond 3/10YR Spread, Low US GOV Bond 3/10YR Spread, Post-Trough Value Spread, Rising VIX, Falling VIX, Post-Peak
Source: MSCI, Thomson Reuters, Bloomberg, J.P. Morgan

until the series has confirmed for 2 months in a row making it slow to change (and sometimes late). This is the trade-off between false positives and responsiveness. That said, historically the heuristic got each series right about 55-60% of the time, so across the range of 14 macro series we track we believe the final outcome of the votes each month to be relatively robust. The factor votes and biggest movers The factors ranked below are in order of the votes from the 2010 Rulebook using the current tradable states. Also shown are the vote changes from December 2011.
Table 2: The factor votes by the model for January 2012
Votes 14 10 9 9 8 5 4 4 4 3 3 3 3 3 3 3 3 3 2 2 2 2 2 1 1 1 1 1 1 1 Factor Historical P/Book Value Ratio Percent Off 52 Week High 1 Mth Price Momentum Size (Barra) RSI 10 day Price Accel 6M Historical BETA 1 year forward forecast PE Relative To History Global Exposure 12 Mth Price Momentum 1 year forward forecast PE Valuation Historical Earnings Yield Value (Barra) Historical Dividend Yield Historical BETA Net Revisions to FY2 [Up-Down]/[Up+Down] Forward Earnings Momentum (3Mth Change) Success (Barra) Price Qscore Quality Price Volatility (Barra) Historical Return On Equity 12 Mth Price Momentum Earnings Success (Barra) Global Exposure Historical Return On Equity Weighting Vote Change Pos. 0 Neg. 0 Neg. 0 Neg. 0 Neg. -1 Pos. -1 Pos. 0 Pos. -1 Neg. 0 Neg. 0 Pos. 0 Pos. 0 Pos. 1 Pos. 0 Pos. 0 Neg. -1 Pos. 0 Pos. -1 Neg. 0 Neg. 0 Pos. 0 Pos. -3 Pos. 0 Pos. -2 Neg. 0 Pos. -2 Pos. 0 Pos. -1 Pos. -3 Pos. 0

Source: MSCI, Thomson Reuters, Bloomberg, J.P. Morgan

Strategy for January 2012

The top four factors dictated by the tradable states and 2010 Rulebook are unchanged from last month: 1. 2. 3. 4. Historical PB stocks that are cheap on P/B % off 52 week high buy those most off their highs Price Reversion 1mth buy what has been sold off Small Caps favour small caps over large

Going into January, the macro environment is being represented by more bullish states such as the Oil to Gold ratio in rising and post-trough, VIX in falling and post-peak. Some of the states might not be spot on... The heuristic we use to call the tradable states is prone to false starts. To combat this, we do not change a state
2

Performance last month

The High Conviction MFR screen in last months report came in under water. It did poorly with the reversion, but well with the P/B bias the performance of the standalone MFR screen last month was a -2.0% L/S. In combination with our Q-Score (i.e. the 50:50 model) it returned -5.1% L/S for December 2011.

Robert Smith (852) 2800 8569 robert.z.smith@jpmorgan.com

Asia Pacific Equity Research 04 January 2012

High Conviction (top 5%) picks of the MFR Model

Below are the current (top 5%) long and short Asia ex Japan picks sorted by country, arrived at by equally weighting the four (4) MFR selected factors.
Figure 1: Current LONG picks for the composite MFR factors (scores range between -3 and +3)
Ticker (right click to
v iew in BB)

Company Name

MSCI Country

GICS Sector

Market Value USD 2,341 787 1,964 1,862 1,172 1,322 510 628 980 1,261 1,147 3,822 3,547 2,182 1,702 1,248 1,112 5,789 1,633 1,159 3,066 1,284 7,938 2,450 2,636 7,521 587 1,351 2,970 3,803 4,463

Avg Daily Val US$m 7.3 11.4 7.3 7.8 15.0 12.6 1.7 10.0 10.2 7.0 20.0 5.1 10.7 22.6 2.8 22.6 12.3 16.7 22.4 5.4 82.5 1.0 1.7 3.6 8.4 24.8 3.6 37.3 17.9 26.8 26.0

PB Hist

% of 52 week High -53.3% -62.5% -74.3% -58.0% -63.0% -61.0% -57.6% -68.4% -70.6% -62.6% -64.3% -56.0% -53.9% -51.0% -36.2% -55.0% -57.3% -45.3% -51.5% -47.6% -56.5% -27.9% -33.7% -16.7% -53.3% -42.5% -60.3% -46.9% -69.6% -57.2% -49.6%

1 Mth Ret

Size

PB Hist Zscore (inverted) 0.7 0.7 0.8 0.9 (0.0) 1.0 0.5 0.9 0.9 0.5 0.8 0.7 0.7 0.7 1.3 0.3 0.9 0.8 0.8 0.7 0.4 0.8 0.6 1.2 0.8 0.8 1.1 0.2 1.2 1.1 0.0

1387 HK 2009 HK 1101 HK 639 HK 1766 HK 390 HK 200012 CH SUEL IN UT IN UNSP IN RCAPT IN RPWR IN POWF IN JPA IN ANTM IJ 064420 KS 001230 KS 024110 KS 004800 KS 037620 KS 009830 KS BC MK MISC MK AGI PM KPLD SP CAPL SP 2371 TT 8069 TT 3481 TT 2409 TT IVL TB

Renhe Commercial Holdings Co. Ltd. China BBMG Corp. China China Rongsheng Heavy Industries Group China Holdings Ltd. Shougang Fushan Resources Group Ltd. China CSR Corp. Ltd. China China Railway Group Ltd. China CSG Holding Co Ltd B HKD China Suzlon Energy Ltd. India Unitech Ltd. India United Spirits Ltd. India Reliance Capital Ltd. India Reliance Power Ltd. India Power Finance Corp. Ltd. India Jaiprakash Associates Ltd. India Aneka Tambang Indonesia KP Chemical Corp. Korea Dongkuk Steel Mill Co. Ltd. Korea Industrial Bank of Korea Korea Hyosung Corp. Korea Mirae Asset Securities Co. Ltd. Korea Hanwha Chemical Corp. Korea Berjaya Corp. Bhd Malaysia MISC Bhd Malaysia Alliance Global Group Inc. Philippines Keppel Land Ltd. Singapore CapitaLand Ltd. Singapore Tatung Co Ltd Taiwan E Ink Holdings Inc. Taiwan Chimei Innolux Corp. Taiwan AU Optronics Corp. Taiwan Indorama Ventures PCL Thailand

Financials Materials Industrials Materials Industrials Industrials Materials Industrials Financials Consumer Staples Financials Utilities Financials Industrials Materials Materials Materials Financials Materials Financials Materials Industrials Industrials Industrials Financials Financials Consumer Discretionary Information Technology Information Technology Information Technology Materials

1.1x 1.0x 0.9x 0.8x 2.2x 0.6x 1.4x 0.5x 0.5x 1.6x 0.8x 1.2x 1.1x 1.1x 1.6x 1.4x 0.4x 0.7x 0.6x 0.7x 1.2x 0.7x 1.1x 1.7x 0.8x 0.7x 0.5x 1.7x 0.3x 0.4x 4.0x

-24.1% -16.2% -8.9% -15.4% -18.5% -10.2% -13.8% -22.5% -17.4% -21.5% -18.7% -21.0% -19.5% -19.5% -1.2% -18.4% -13.1% -23.9% -14.1% -13.7% -13.9% -6.1% -6.5% -0.2% -11.6% -14.1% -10.8% -28.4% -6.4% -11.2% -9.2%

2,341.3 787.3 1,964.4 1,862.2 1,172.5 1,321.6 510.5 627.9 980.1 1,261.0 1,146.8 3,821.7 3,546.9 2,181.8 1,702.0 1,247.6 1,112.1 5,788.6 1,632.7 1,159.5 3,065.9 1,284.0 7,938.2 2,449.8 2,636.2 7,520.9 587.0 1,350.9 2,969.5 3,802.9 4,463.3

% of 52 week 1 Mth Ret Size Avg MFR High Zscore Zscore Zscore Zscore (inverted) (inverted) (inverted) 1.0 2.7 0.4 1.2 1.6 1.7 0.7 1.2 2.3 0.7 0.5 1.1 1.3 1.6 0.5 1.1 1.6 2.0 0.6 1.1 1.5 0.9 0.6 1.0 1.3 1.3 0.8 1.0 2.1 1.8 0.8 1.4 2.2 1.1 0.8 1.3 1.7 1.7 0.8 1.2 1.8 1.3 0.8 1.2 1.4 1.6 0.5 1.0 1.3 1.4 0.5 1.0 1.1 1.4 0.7 1.0 1.3 0.5 1.0 1.0 1.5 2.1 0.9 1.2 1.7 1.3 0.9 1.2 0.9 2.9 0.0 1.2 1.3 1.5 0.8 1.1 1.1 1.4 0.9 1.0 1.6 1.5 0.6 1.0 1.3 1.8 1.0 1.2 1.9 1.9 (0.2) 1.0 1.1 0.9 0.9 1.0 1.6 1.8 0.8 1.2 1.0 2.3 0.2 1.0 1.8 1.5 0.8 1.3 0.9 3.0 0.6 1.2 2.4 0.8 0.2 1.2 1.6 1.5 (0.0) 1.1 2.3 1.8 0.7 1.2

Figure 2: Current SHORT picks for the composite MFR factors (scores range between -3 and +3)
Ticker (right click to
v iew in BB)

Company Name

MSCI Country

GICS Sector

Market Value USD

Avg Daily Val US$m 111.8 86.4 68.0 191.6 17.6 25.4 22.4 107.9 2.5 26.2 69.5 27.7 21.0 35.7 26.4 3.3 14.1 42.9 135.5 299.7 12.2 8.2 1.9 6.8 9.3 55.4 42.1 15.2 17.3 95.4 3.3

PB Hist

% of 52 week High -18.2% -4.9% -6.2% -6.7% -10.9% -8.5% -1.8% -31.2% -17.1% -22.7% -18.3% -7.7% -5.8% -5.8% -1.0% -0.5% -2.7% -15.7% -13.0% -2.7% -2.2% -4.1% -0.4% 0.0% -0.3% -7.6% -9.9% -13.1% -4.0% -3.2% -4.3%

1 Mth Ret

Size

PB Hist Zscore (inverted) 0.4 0.5 0.4 0.0 (3.0) (3.0) (3.0) (3.0) (2.4) (0.9) (0.8) (1.9) (3.0) (1.9) (0.6) (3.0) 0.0 (3.0) 0.1 0.1 (2.1) (3.0) (3.0) (1.5) (0.9) (0.0) (0.1) (3.0) (2.3) (1.1) (2.0)

857 HK 386 HK 762 HK 941 HK 151 HK 322 HK 1044 HK 700 HK DABUR IN COAL IN INFO IN ITC IN HUVR IN TCS IN ASII IJ UNVR IJ 005935 KS 035420 KS 005380 KS 005930 KS 001800 KS DIGI MK ROTH MK TEL PM JCNC SP ST SP 2412 TT 2912 TT 3045 TT 2330 TT BEC TB

PetroChina Co. Ltd. China China Petroleum & Chemical Corp. China China Unicom (Hong Kong) Ltd. China China Mobile Ltd. China Want Want China Holdings Ltd. China Tingyi (Cayman Islands) Holding Corp. China Hengan International Group Co. Ltd. China Tencent Holdings Ltd. China Dabur India Ltd. India Coal India Ltd. India Infosys Ltd. India ITC Ltd. India Hindustan Unilev Ltd. er India Tata Consultancy Serv ices Ltd. India Astra International Indonesia Unilever Indonesia Indonesia Samsung Electronics Co Prf Korea NHN Corp. Korea Hyundai Motor Co. Ltd. Korea Samsung Electronics Co. Ltd. Korea Orion Corp. Korea DiGi.com Bhd Malaysia British American Tobacco (Malaysia) Bhd Malaysia Philippine Long Distance Telephone Co. Philippines Jardine Cycle & Carriage Ltd. Singapore Singapore Telecommunications Ltd. Singapore Chunghwa Telecom Co. Ltd. Taiwan President Chain Store Corp. Taiwan Taiwan Mobile Co. Ltd. Taiwan Taiwan Semiconductor Manufacturing Co. Taiwan Ltd. BEC World PCL Thailand

Energy 27,432 Energy 18,621 Telecommunication Serv ices 50,903 Telecommunication Serv 199,210 ices Consumer Staples 13,189 Consumer Staples 17,235 Consumer Staples 11,953 Information Technology 37,658 Consumer Staples 3,301 Energy 38,790 Information Technology 30,909 Consumer Staples 29,297 Consumer Staples 16,551 Information Technology 44,014 Consumer Discretionary 33,238 Consumer Staples 15,452 Information Technology 13,592 Information Technology 9,180 Consumer Discretionary 42,400 Information Technology 141,443 Consumer Staples 3,468 Telecommunication Serv ices 9,407 Consumer Staples 4,483 Telecommunication Serv ices 12,641 Consumer Discretionary 13,541 Telecommunication Serv ices 39,016 Telecommunication Serv ices 25,610 Consumer Staples 5,800 Telecommunication Serv ices 10,672 Information Technology 64,762 Consumer Discretionary 2,853

1.6x 1.4x 1.6x 2.2x 12.3x 9.5x 8.8x 10.9x 10.8x 6.2x 6.0x 9.4x 32.8x 9.3x 6.2x 34.9x 7.2x 1.7x 1.7x 5.4x 22.0x 28.8x 5.2x 3.6x 2.1x 2.1x 8.7x 5.0x 3.4x 11.9x

2.4% 27,432.4 2.9% 18,620.6 0.0% 50,902.6 -0.3% 199,209.5 -6.0% 13,188.9 -6.3% 17,234.9 2.6% 11,952.9 4.5% 37,657.7 6.1% 3,300.8 -2.4% 38,789.6 5.8% 30,908.9 -3.3% 29,297.4 0.1% 16,551.1 -0.1% 44,014.0 8.7% 33,237.7 11.2% 15,452.1 4.5% 13,591.9 -4.1% 9,180.1 0.9% 42,399.5 2.9% 141,443.2 14.3% 3,467.7 1.6% 9,407.0 5.7% 4,482.9 8.4% 12,641.3 5.9% 13,541.0 3.2% 39,016.1 -1.0% 25,609.7 5.6% 5,800.3 -0.6% 10,672.1 -0.3% 64,761.8 15.6% 2,852.6

% of 52 week 1 Mth Ret Size Avg MFR High Zscore Zscore Zscore Zscore (inverted) (inverted) (inverted) (1.1) (0.9) (3.0) (1.2) (1.9) (0.9) (2.3) (1.2) (1.9) (0.5) (3.0) (1.3) (1.8) (0.5) (3.0) (1.3) (1.6) 0.3 (1.4) (1.4) (1.7) 0.3 (2.0) (1.6) (2.1) (0.9) (1.1) (1.8) (0.3) (1.2) (3.0) (1.9) (0.8) (1.9) 0.5 (1.1) (0.5) (0.8) (3.0) (1.3) (0.8) (1.9) (2.2) (1.4) (1.3) (0.7) (2.0) (1.5) (1.5) (1.2) (0.8) (1.6) (1.5) (1.1) (3.0) (1.9) (1.2) (0.8) (3.0) (1.4) (1.3) (1.2) (0.9) (1.6) (1.8) (1.2) (1.4) (1.1) (1.0) 0.0 (0.6) (1.1) (1.2) (0.7) (3.0) (1.2) (1.8) (1.0) (3.0) (1.4) (1.9) (2.7) 0.5 (1.5) (1.0) (0.0) (0.5) (1.2) (1.4) (1.0) 0.4 (1.2) (1.1) (0.4) (3.0) (1.5) (1.6) (1.6) (0.7) (1.2) (1.2) (1.0) (3.0) (1.3) (1.6) 0.0 (3.0) (1.2) (1.4) (0.9) (0.5) (1.5) (2.0) (0.0) (1.7) (1.5) (2.0) (0.1) (3.0) (1.6) (1.0) (2.9) 1.0 (1.2)

Source: Bloomberg, Reuters Thomson, MSCI, J.P. Morgan

Robert Smith (852) 2800 8569 robert.z.smith@jpmorgan.com

Asia Pacific Equity Research 04 January 2012

High Conviction (top 5%) picks of the 50:50 Model

Below are the current (top 5%) long and short picks sorted by country, arrived at by combining the 4-factor MFR model above with our static Q-Score model (weighted 50:50).
Figure 3: Current LONG picks for the 50:50 model (scores range between -3 and +3)
Ticker (right click to
v iew in BB)

Company Name

MSCI Country

GICS Sector

Market Value USD 1,455 510 1,478 2,341 6,231 2,328 1,661 3,336 816 995 1,429 1,995 787 7,738 3,869 1,473 3,547 5,183 5,789 4,166 3,052 2,009 3,363 2,450 13,541 2,811 1,351 1,101 1,856 1,160 3,543

Avg Daily Val US$m 12.4 1.7 5.4 7.3 35.2 16.3 7.0 88.6 8.1 6.9 7.5 8.7 11.4 55.0 10.2 4.7 10.7 34.2 16.7 45.9 27.2 1.1 4.7 3.6 9.3 14.0 37.3 4.5 63.4 3.5 111.0

PB Hist

% of 52 week High -42.0% -57.6% -51.1% -53.3% -51.0% -39.0% -55.4% -50.7% -50.5% -44.5% -35.4% -22.4% -62.5% -35.3% -11.6% -30.1% -53.9% -44.6% -45.3% -48.8% -22.4% -19.5% -12.7% -16.7% -0.3% -55.0% -46.9% -19.7% -40.6% -35.7% -47.7%

1 Mth Ret

Size

PB Hist Zscore (inverted) (0.7) 0.5 0.0 0.7 0.2 (0.1) 0.6 0.1 0.8 0.7 (2.0) (0.0) 0.7 (1.7) 0.3 0.5 0.7 0.7 0.8 0.4 (0.7) 0.4 1.4 1.2 (0.9) 0.2 0.2 0.8 (3.0) 0.9 (0.7)

189 HK 200012 CH 3389 HK 1387 HK 3333 HK 2899 HK 175 HK 3323 HK 2777 HK 751 HK 1818 HK 1828 HK 2009 HK 27 HK 142 HK SCS IN POWF IN 003600 KS 024110 KS 042660 KS 011210 KS MAHB MK MBT PM AGI PM JCNC SP YZJ SP 8069 TT 1504 TT 2049 TT 6008 TT 2474 TT

Dongyue Group Ltd. China CSG Holding Co Ltd B HKD China Hengdeli Holdings Ltd. China Renhe Commercial Holdings Co. Ltd. China Evergrande Real Estate Group Ltd. China Zijin Mining Group Co. Ltd. China Geely Automobile Holdings Ltd. China China National Building Material Co. Ltd. China Guangzhou R&F Properties Co. Ltd. China Skyworth Digital Holdings Ltd. China Zhaojin Mining Industry Co. Ltd. China Dah Chong Hong Holdings Ltd. China BBMG Corp. China Galaxy Entertainment Group Ltd. Hong Kong First Pacific Co. Ltd. Hong Kong Satyam Computer Services Ltd. India Power Finance Corp. Ltd. India SK Holdings Co. Ltd. Korea Industrial Bank of Korea Korea Daewoo Shipbuilding & Marine Engineering Co. Ltd. Korea Hyundai Wia Corp. Korea Malaysia Airports Holdings Bhd Malaysia Metropolitan Bank & Trust Co. Philippines Alliance Global Group Inc. Philippines Jardine Cycle & Carriage Ltd. Singapore Yangzijiang Shipbuilding Holdings Ltd. Singapore E Ink Holdings Inc. Taiwan TECO Electric & Machinery Co. Ltd. Taiwan HIWIN Technologies Corp. Taiwan KGI Securities Co. Ltd. Taiwan Catcher Technology Co. Ltd. Taiwan

Materials Materials Consumer Discretionary Financials Financials Materials Consumer Discretionary Materials Financials Consumer Discretionary Materials Consumer Discretionary Materials Consumer Discretionary Financials Information Technology Financials Industrials Financials Industrials Consumer Discretionary Industrials Financials Industrials Consumer Discretionary Industrials Information Technology Industrials Industrials Financials Information Technology

3.4x 1.4x 2.2x 1.1x 1.9x 2.4x 1.3x 2.1x 0.8x 1.1x 5.6x 2.3x 1.0x 6.2x 1.5x 1.7x 1.1x 0.7x 0.7x 1.2x 3.1x 1.9x 1.5x 1.7x 3.6x 1.8x 1.7x 0.9x 9.2x 0.7x 2.9x

-17.6% -13.8% -16.8% -24.1% -11.5% -16.1% -8.4% -14.3% -11.5% -1.0% -10.6% -17.0% -16.2% -7.4% -3.1% -5.9% -19.5% -13.2% -23.9% -16.7% -10.4% -6.8% 4.5% -0.2% 5.9% 3.3% -28.4% -1.1% -9.6% -8.4% -1.4%

1,455.0 510.5 1,477.8 2,341.3 6,231.1 2,328.0 1,660.8 3,335.7 815.5 994.9 1,429.5 1,995.0 787.3 7,737.8 3,868.8 1,472.8 3,546.9 5,182.8 5,788.6 4,166.3 3,052.1 2,008.6 3,362.6 2,449.8 13,541.0 2,811.4 1,350.9 1,101.0 1,855.6 1,160.4 3,542.7

% of 52 week 1 Mth Ret Size Avg MFR Q-Score High Zscore Zscore Zscore Zscore Zscore (inverted) (inverted) (inverted) 0.3 1.9 0.6 0.5 3.0 1.3 1.3 0.8 1.0 1.2 0.9 1.8 0.6 0.8 1.2 1.0 2.7 0.4 1.2 0.5 0.9 1.0 (0.2) 0.5 1.2 0.1 1.7 0.5 0.5 1.0 1.1 0.6 0.6 0.7 0.8 0.9 1.4 0.3 0.7 0.8 0.8 1.0 0.7 0.9 0.6 0.5 (0.4) 0.7 0.4 1.1 (0.1) 0.9 0.6 (0.2) 1.6 (0.9) 1.8 0.5 0.3 1.0 1.6 1.7 0.7 1.2 0.2 0.5 1.4 0.5 0.2 1.9 (1.3) 0.6 0.9 0.1 1.2 (0.1) (0.4) 0.7 0.2 2.0 1.3 1.4 0.5 1.0 0.5 0.9 1.4 0.2 0.8 1.6 0.9 2.9 0.0 1.2 0.5 1.1 1.9 0.4 1.0 0.5 (0.6) 0.9 0.6 0.1 1.3 0.5 2.0 0.9 0.9 0.5 0.6 0.2 0.5 0.7 1.4 1.1 0.9 0.9 1.0 0.7 (1.6) (1.6) (0.7) (1.2) 2.6 1.7 (1.0) 0.8 0.4 1.0 0.9 3.0 0.6 1.2 1.5 (0.9) 0.0 0.6 0.1 1.4 0.5 1.3 0.5 (0.2) 1.6 0.1 1.1 0.6 0.7 0.7 1.0 0.1 0.1 0.1 1.3

50:50

1.8 1.1 1.0 0.8 0.8 0.8 0.8 0.7 0.7 0.7 0.7 0.7 0.7 1.0 0.7 1.1 0.7 1.2 0.8 0.7 0.7 0.7 1.0 0.9 0.7 0.7 1.3 0.8 0.7 0.7 0.7

Figure 4: Current SHORT picks for the 50:50 model (scores range between -3 and +3)
Ticker (right click to
v iew in BB)

Company Name

MSCI Country

GICS Sector

Market Value USD

Avg Daily Val US$m 6.8 35.2 13.8 122.9 9.3 11.0 7.5 94.8 4.9 2.6 2.3 87.0 50.5 2.3 78.8 18.9 9.8 58.7 12.2 4.3 27.1 1.7 8.8 17.9 26.8 5.0 7.1 27.6 3.3 11.6 5.5

PB Hist

% of 52 week High -38.3% -62.2% -20.2% -41.0% -54.6% -58.0% -54.0% -18.1% -49.7% -30.2% -52.6% -39.8% -25.2% -25.9% -25.8% -12.6% -51.9% -7.8% -2.2% -39.1% -14.4% -2.1% -50.4% -69.6% -57.2% -54.9% -55.3% -14.9% -71.6% -64.9% -15.6%

1 Mth Ret

Size

PB Hist Zscore (inverted) (0.6) 0.1 (3.0) 0.0 1.0 0.9 1.0 0.1 0.7 (0.8) 0.7 0.6 0.4 0.4 0.6 0.7 0.6 (2.8) (2.1) 0.4 0.9 1.2 0.8 1.2 1.1 0.8 0.7 0.3 1.1 0.7 0.9

2020 HK 3800 HK 6808 HK 2628 HK 347 HK 1919 HK 2866 HK 1299 HK 316 HK SIEM IN GMRI IN 066570 KS 000830 KS 000100 KS 005490 KS 032640 KS 011070 KS 047810 KS 001800 KS 011200 KS 015760 KS AC PM NOL SP 3481 TT 2409 TT 2609 TT 6244 TT 2002 TT 3474 TT 5483 TT 4938 TT

Anta Sports Products Ltd. GCL-Poly Energy Holdings Ltd. Sun Art Retail Group Ltd. China Life Insurance Co. Ltd. (China) Angang Steel Co. Ltd. China COSCO Holdings Co. Ltd. China Shipping Container Lines Co. Ltd. AIA Group Ltd. Orient Overseas (International) Ltd. Siemens Ltd. GMR Infrastructure Ltd. LG Electronics Inc. Samsung C&T Corp. Yuhan Corp. POSCO LG Uplus Corp. LG Innotek Co. Ltd. Korea Aerospace Industries Ltd. Orion Corp. Hyundai Merchant Marine Co. Ltd. Korea Electric Power Corp. Ayala Corp. Neptune Orient Lines Ltd. Chimei Innolux Corp. AU Optronics Corp. Yang Ming Marine Transport Corp. Motech Industries Inc. China Steel Corp. Inotera Memories Inc. Sino-American Silicon Products Inc. Pegatron Corp.

China China China China China China China Hong Kong Hong Kong India India Korea Korea Korea Korea Korea Korea Korea Korea Korea Korea Philippines Singapore Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan

Consumer Discretionary 2,954 Information Technology 4,381 Consumer Staples 12,170 Financials 19,120 Materials 794 Industrials 1,302 Industrials 888 Financials 38,141 Industrials 3,613 Industrials 4,258 Utilities 1,613 Consumer Discretionary 10,647 Industrials 9,503 Health Care 1,231 Materials 29,359 Telecommunication Serv ices 3,158 Information Technology 1,244 Industrials 3,329 Consumer Staples 3,468 Industrials 3,181 Utilities 14,309 Financials 4,234 Industrials 2,378 Information Technology 2,970 Information Technology 3,803 Industrials 1,172 Information Technology 767 Materials 14,405 Information Technology 798 Information Technology 688 Information Technology 2,481

3.3x 2.1x 15.0x 2.2x 0.6x 0.7x 0.6x 2.0x 0.6x 5.9x 1.1x 0.9x 1.2x 1.3x 0.9x 0.8x 1.0x 6.6x 5.4x 1.3x 0.4x 1.7x 0.7x 0.3x 0.4x 0.8x 1.0x 1.5x 0.5x 1.0x 0.8x

6.5% -6.9% -9.6% -7.0% 9.0% 10.8% 13.2% 2.7% 17.4% -8.2% 6.1% -2.2% -1.3% -1.5% -2.6% 1.2% -0.7% -1.3% 14.3% 1.2% 4.2% 13.2% 9.2% -6.4% -11.2% 8.5% 5.0% 0.2% 30.6% 14.7% 12.7%

2,953.8 4,381.5 12,170.0 19,119.9 793.9 1,302.2 888.5 38,140.7 3,613.1 4,258.2 1,612.9 10,647.2 9,502.7 1,230.8 29,359.0 3,158.3 1,243.8 3,328.9 3,467.7 3,181.1 14,309.3 4,234.0 2,377.6 2,969.5 3,802.9 1,172.5 766.8 14,404.9 798.4 687.6 2,480.5

% of 52 week 1 Mth Ret Size Avg MFR Q-Score High Zscore Zscore Zscore Zscore Zscore (inverted) (inverted) (inverted) 0.1 (1.4) 0.3 (0.4) (1.1) 1.6 0.4 0.1 0.5 (2.1) (1.0) 0.8 (1.2) (1.1) (0.7) 0.3 0.4 (2.3) (0.4) (1.5) 1.1 (1.8) 0.7 0.3 (2.9) 1.3 (2.0) 0.6 0.2 (3.0) 1.1 (2.3) 0.7 0.1 (3.0) (0.8) (0.5) (2.7) (1.0) (0.7) 1.6 (3.0) 0.9 0.0 (2.5) (0.1) (0.1) 0.5 (0.1) (1.5) 1.2 (1.9) 0.7 0.2 (2.9) 0.6 (0.2) (0.9) 0.0 (1.7) (0.4) (0.4) (0.7) (0.2) (1.4) (0.3) (0.3) 0.9 0.2 (2.0) (0.3) (0.2) (3.0) (0.7) (1.1) (1.2) (0.7) 0.5 (0.2) (1.8) 1.3 (0.5) 0.9 0.6 (2.6) (1.5) (0.4) 0.5 (1.1) (1.0) (1.9) (2.7) 0.5 (1.5) (0.6) 0.5 (0.7) 0.5 0.2 (2.7) (1.1) (1.2) (1.6) (0.7) (2.5) (0.9) (1.1) 0.2 (0.2) (1.9) 1.4 (2.2) 0.8 0.2 (3.0) 2.4 0.8 0.2 1.2 (2.7) 1.6 1.5 (0.0) 1.1 (2.6) 1.4 (1.4) 0.6 0.4 (2.1) 1.5 (0.9) 0.7 0.5 (2.2) (1.3) (0.1) (2.6) (0.9) (1.3) 2.6 (3.0) 0.7 0.4 (2.8) 2.1 (2.3) 0.7 0.3 (2.9) (1.2) (2.0) 0.3 (0.5) (2.1)

50:50

(0.8) (0.8) (0.9) (0.9) (1.3) (1.4) (1.5) (0.8) (1.2) (0.8) (1.4) (0.8) (0.8) (0.9) (0.9) (1.0) (1.0) (1.0) (1.1) (1.2) (1.6) (1.0) (1.4) (0.8) (0.8) (0.8) (0.9) (1.1) (1.2) (1.3) (1.3)

Source: Bloomberg, Reuters Thomson, MSCI, J.P. Morgan

Please contact us if you would like a copy of our spreadsheet screen that lets you dynamically choose what factors to combine into a composite.

Robert Smith (852) 2800 8569 robert.z.smith@jpmorgan.com

Asia Pacific Equity Research 04 January 2012

Analyst Certification: The research analyst(s) denoted by an AC on the cover of this report certifies (or, where multiple research analysts are primarily responsible for this report, the research analyst denoted by an AC on the cover or within the document individually certifies, with respect to each security or issuer that the research analyst covers in this research) that: (1) all of the views expressed in this report accurately reflect his or her personal views about any and all of the subject securities or issuers; and (2) no part of any of the research analyst's compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the research analyst(s) in this report.

Important Disclosures
Company-Specific Disclosures: Important disclosures, including price charts, are available for compendium reports and all J.P. Morgan covered companies by visiting https://mm.jpmorgan.com/disclosures/company, calling 1-800-477-0406, or emailing research.disclosure.inquiries@jpmorgan.com with your request. Explanation of Equity Research Ratings and Analyst(s) Coverage Universe: J.P. Morgan uses the following rating system: Overweight [Over the next six to twelve months, we expect this stock will outperform the average total return of the stocks in the analyst's (or the analyst's team's) coverage universe.] Neutral [Over the next six to twelve months, we expect this stock will perform in line with the average total return of the stocks in the analyst's (or the analyst's team's) coverage universe.] Underweight [Over the next six to twelve months, we expect this stock will underperform the average total return of the stocks in the analyst's (or the analyst's team's) coverage universe.] In our Asia (ex-Australia) and UK small- and mid-cap equity research, each stocks expected total return is compared to the expected total return of a benchmark country market index, not to those analysts coverage universe. If it does not appear in the Important Disclosures section of this report, the certifying analysts coverage universe can be found on J.P. Morgans research website, www.morganmarkets.com. J.P. Morgan Equity Research Ratings Distribution, as of September 30, 2011
J.P. Morgan Global Equity Research Coverage IB clients* JPMS Equity Research Coverage IB clients* Overweight (buy) 47% 51% 45% 70% Neutral (hold) 42% 44% 47% 60% Underweight (sell) 11% 33% 7% 52%

*Percentage of investment banking clients in each rating category. For purposes only of FINRA/NYSE ratings distribution rules, our Overweight rating falls into a buy rating category; our Neutral rating falls into a hold rating category; and our Underweight rating falls into a sell rating category.

Equity Valuation and Risks: For valuation methodology and risks associated with covered companies or price targets for covered companies, please see the most recent company-specific research report at http://www.morganmarkets.com , contact the primary analyst or your J.P. Morgan representative, or email research.disclosure.inquiries@jpmorgan.com. Equity Analysts' Compensation: The equity research analysts responsible for the preparation of this report receive compensation based upon various factors, including the quality and accuracy of research, client feedback, competitive factors, and overall firm revenues, which include revenues from, among other business units, Institutional Equities and Investment Banking. Registration of non-US Analysts: Unless otherwise noted, the non-US analysts listed on the front of this report are employees of non-US affiliates of JPMS, are not registered/qualified as research analysts under NASD/NYSE rules, may not be associated persons of JPMS, and may not be subject to FINRA Rule 2711 and NYSE Rule 472 restrictions on communications with covered companies, public appearances, and trading securities held by a research analyst account.

Other Disclosures
J.P. Morgan ("JPM") is the global brand name for J.P. Morgan Securities LLC ("JPMS") and its affiliates worldwide. J.P. Morgan Cazenove is a marketing name for the U.K. investment banking businesses and EMEA cash equities and equity research businesses of JPMorgan Chase & Co. and its subsidiaries. Options related research: If the information contained herein regards options related research, such information is available only to persons who have received the proper option risk disclosure documents. For a copy of the Option Clearing Corporation's Characteristics and Risks of Standardized Options, please contact your J.P. Morgan Representative or visit the OCC's website at http://www.optionsclearing.com/publications/risks/riskstoc.pdf Legal Entities Disclosures U.S.: JPMS is a member of NYSE, FINRA, SIPC and the NFA. JPMorgan Chase Bank, N.A. is a member of FDIC and is authorized and regulated in the UK by the Financial Services Authority. U.K.: J.P. Morgan Securities Ltd. (JPMSL) is a member of the London Stock Exchange and is authorized and regulated by the Financial Services Authority. Registered in England & Wales No. 2711006. Registered Office 125 London Wall, London EC2Y 5AJ. South Africa: J.P. Morgan Equities Limited is a member of the Johannesburg Securities Exchange and is regulated by the FSB. Hong Kong: J.P. Morgan Securities (Asia Pacific) Limited (CE number AAJ321) is regulated by the Hong Kong Monetary Authority and the Securities and Futures Commission in
5

Robert Smith (852) 2800 8569 robert.z.smith@jpmorgan.com

Asia Pacific Equity Research 04 January 2012

Hong Kong. Korea: J.P. Morgan Securities (Far East) Ltd, Seoul Branch, is regulated by the Korea Financial Supervisory Service. Australia: J.P. Morgan Australia Limited (ABN 52 002 888 011/AFS Licence No: 238188) is regulated by ASIC and J.P. Morgan Securities Australia Limited (ABN 61 003 245 234/AFS Licence No: 238066) is a Market Participant with the ASX and regulated by ASIC. Taiwan: J.P.Morgan Securities (Taiwan) Limited is a participant of the Taiwan Stock Exchange (company-type) and regulated by the Taiwan Securities and Futures Bureau. India: J.P. Morgan India Private Limited, having its registered office at J.P. Morgan Tower, Off. C.S.T. Road, Kalina, Santacruz East, Mumbai - 400098, is a member of the National Stock Exchange of India Limited (SEBI Registration Number - INB 230675231/INF 230675231/INE 230675231) and Bombay Stock Exchange Limited (SEBI Registration Number - INB 010675237/INF 010675237) and is regulated by Securities and Exchange Board of India. Thailand: JPMorgan Securities (Thailand) Limited is a member of the Stock Exchange of Thailand and is regulated by the Ministry of Finance and the Securities and Exchange Commission. Indonesia: PT J.P. Morgan Securities Indonesia is a member of the Indonesia Stock Exchange and is regulated by the BAPEPAM LK. Philippines: J.P. Morgan Securities Philippines Inc. is a member of the Philippine Stock Exchange and is regulated by the Securities and Exchange Commission. Brazil: Banco J.P. Morgan S.A. is regulated by the Comissao de Valores Mobiliarios (CVM) and by the Central Bank of Brazil. Mexico: J.P. Morgan Casa de Bolsa, S.A. de C.V., J.P. Morgan Grupo Financiero is a member of the Mexican Stock Exchange and authorized to act as a broker dealer by the National Banking and Securities Exchange Commission. Singapore: This material is issued and distributed in Singapore by J.P. Morgan Securities Singapore Private Limited (JPMSS) [MICA (P) 025/01/2011 and Co. Reg. No.: 199405335R] which is a member of the Singapore Exchange Securities Trading Limited and is regulated by the Monetary Authority of Singapore (MAS) and/or JPMorgan Chase Bank, N.A., Singapore branch (JPMCB Singapore) which is regulated by the MAS. Malaysia: This material is issued and distributed in Malaysia by JPMorgan Securities (Malaysia) Sdn Bhd (18146-X) which is a Participating Organization of Bursa Malaysia Berhad and a holder of Capital Markets Services License issued by the Securities Commission in Malaysia. Pakistan: J. P. Morgan Pakistan Broking (Pvt.) Ltd is a member of the Karachi Stock Exchange and regulated by the Securities and Exchange Commission of Pakistan. Saudi Arabia: J.P. Morgan Saudi Arabia Ltd. is authorized by the Capital Market Authority of the Kingdom of Saudi Arabia (CMA) to carry out dealing as an agent, arranging, advising and custody, with respect to securities business under licence number 35-07079 and its registered address is at 8th Floor, Al-Faisaliyah Tower, King Fahad Road, P.O. Box 51907, Riyadh 11553, Kingdom of Saudi Arabia. Dubai: JPMorgan Chase Bank, N.A., Dubai Branch is regulated by the Dubai Financial Services Authority (DFSA) and its registered address is Dubai International Financial Centre - Building 3, Level 7, PO Box 506551, Dubai, UAE. Country and Region Specific Disclosures U.K. and European Economic Area (EEA): Unless specified to the contrary, issued and approved for distribution in the U.K. and the EEA by JPMSL. Investment research issued by JPMSL has been prepared in accordance with JPMSL's policies for managing conflicts of interest arising as a result of publication and distribution of investment research. Many European regulators require a firm to establish, implement and maintain such a policy. This report has been issued in the U.K. only to persons of a kind described in Article 19 (5), 38, 47 and 49 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (all such persons being referred to as "relevant persons"). This document must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this document relates is only available to relevant persons and will be engaged in only with relevant persons. In other EEA countries, the report has been issued to persons regarded as professional investors (or equivalent) in their home jurisdiction. Australia: This material is issued and distributed by JPMSAL in Australia to "wholesale clients" only. JPMSAL does not issue or distribute this material to "retail clients". The recipient of this material must not distribute it to any third party or outside Australia without the prior written consent of JPMSAL. For the purposes of this paragraph the terms "wholesale client" and "retail client" have the meanings given to them in section 761G of the Corporations Act 2001. Germany: This material is distributed in Germany by J.P. Morgan Securities Ltd., Frankfurt Branch and J.P.Morgan Chase Bank, N.A., Frankfurt Branch which are regulated by the Bundesanstalt fr Finanzdienstleistungsaufsicht. Hong Kong: The 1% ownership disclosure as of the previous month end satisfies the requirements under Paragraph 16.5(a) of the Hong Kong Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission. (For research published within the first ten days of the month, the disclosure may be based on the month end data from two months prior.) J.P. Morgan Broking (Hong Kong) Limited is the liquidity provider/market maker for derivative warrants, callable bull bear contracts and stock options listed on the Stock Exchange of Hong Kong Limited. An updated list can be found on HKEx website: http://www.hkex.com.hk. Japan: There is a risk that a loss may occur due to a change in the price of the shares in the case of share trading, and that a loss may occur due to the exchange rate in the case of foreign share trading. In the case of share trading, JPMorgan Securities Japan Co., Ltd., will be receiving a brokerage fee and consumption tax (shouhizei) calculated by multiplying the executed price by the commission rate which was individually agreed between JPMorgan Securities Japan Co., Ltd., and the customer in advance. Financial Instruments Firms: JPMorgan Securities Japan Co., Ltd., Kanto Local Finance Bureau (kinsho) No. 82 Participating Association / Japan Securities Dealers Association, The Financial Futures Association of Japan, Type II Financial Instruments Firms Association and Japan Securities Investment Advisers Association. Korea: This report may have been edited or contributed to from time to time by affiliates of J.P. Morgan Securities (Far East) Ltd, Seoul Branch. Singapore: JPMSS and/or its affiliates may have a holding in any of the securities discussed in this report; for securities where the holding is 1% or greater, the specific holding is disclosed in the Important Disclosures section above. India: For private circulation only, not for sale. Pakistan: For private circulation only, not for sale. New Zealand: This material is issued and distributed by JPMSAL in New Zealand only to persons whose principal business is the investment of money or who, in the course of and for the purposes of their business, habitually invest money. JPMSAL does not issue or distribute this material to members of "the public" as determined in accordance with section 3 of the Securities Act 1978. The recipient of this material must not distribute it to any third party or outside New Zealand without the prior written consent of JPMSAL. Canada: The information contained herein is not, and under no circumstances is to be construed as, a prospectus, an advertisement, a public offering, an offer to sell securities described herein, or solicitation of an offer to buy securities described herein, in Canada or any province or territory thereof. Any offer or sale of the securities described herein in Canada will be made only under an exemption from the requirements to file a prospectus with the relevant Canadian securities regulators and only by a dealer properly registered under applicable securities laws or, alternatively, pursuant to an exemption from the dealer registration requirement in the relevant province or territory of Canada in which such offer or sale is made. The information contained herein is under no circumstances to be construed as investment advice in any province or territory of Canada and is not tailored to the needs of the recipient. To the extent that the information contained herein references securities of an issuer incorporated, formed or created under the laws of Canada or a province or territory of Canada, any trades in such securities must be conducted through a dealer registered in Canada. No securities commission or similar regulatory authority in Canada has reviewed or in any way passed judgment upon these materials, the information contained herein or the merits of the securities described herein, and any representation to the contrary is an offence. Dubai: This report has been issued to persons regarded as professional clients as defined under the DFSA rules. General: Additional information is available upon request. Information has been obtained from sources believed to be reliable but JPMorgan Chase & Co. or its affiliates and/or subsidiaries (collectively J.P. Morgan) do not warrant its completeness or accuracy except with respect to any disclosures relative to JPMS and/or its affiliates and the analyst's involvement with the issuer that is the subject of the research. All pricing is as of the close of market for the
6

Robert Smith (852) 2800 8569 robert.z.smith@jpmorgan.com

Asia Pacific Equity Research 04 January 2012

securities discussed, unless otherwise stated. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The opinions and recommendations herein do not take into account individual client circumstances, objectives, or needs and are not intended as recommendations of particular securities, financial instruments or strategies to particular clients. The recipient of this report must make its own independent decisions regarding any securities or financial instruments mentioned herein. JPMS distributes in the U.S. research published by non-U.S. affiliates and accepts responsibility for its contents. Periodic updates may be provided on companies/industries based on company specific developments or announcements, market conditions or any other publicly available information. Clients should contact analysts and execute transactions through a J.P. Morgan subsidiary or affiliate in their home jurisdiction unless governing law permits otherwise. "Other Disclosures" last revised September 30, 2011.

Copyright 2011 JPMorgan Chase & Co. All rights reserved. This report or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. #$J&098$#*P