Lowering target prices to reflect near-term tightening riskWe lower our 12-month target prices across our coverage group by 0%-32% after increasing our target price discounts to NAV by 0-20 percentage points (to within a range of 10%-40% from our prior 0%-30% range). This reflects our concern of greater uncertainty arising from recent government macro tightening. Although we believe its purpose is to slow, rather than reverse, China’s economic recovery, we believe the tightening could affect
the pace of developers selling properties or realizing their land bank value in the near-term and could therefore weigh on share price performance.