NEC Corporation (NEC) FY 2008 revenues were in line with our expectation. NEC’s net performance exceeded our expectations, primarily due to better than anticipated operating performance coupled with lower than anticipated income taxes and non-operating expenses, net in FY 2008. Although the current common stock price does not support our HOLD rating, we maintain our HOLD rating for the common stock as we are likely to revise upwards our FY 2009 estimates, since Management’s FY 2009 guidance are above our expectation. Although the current ADR price no longer supports our HOLD rating, we reiterate the ADR a HOLD based on our fundamental outlook and our expectation of a negative currency impact on the ADR in the long term.

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