What's new
　　Shenzhen Investment published its 10M16 sales data; asit has already surpassed its FY16 target, we expect Rmb20bn tobe comfortably achieved.
　　Comments
　　FY16: core NP up ~26% YoY: 1） top line to see growth of+10~15% YoY in FY16; and, 2） GPM to edge up >34%, as theShenzhen region contributes ~70% of total revenue for thewhole year. An estimated ~HK$10bn of products are to bebooked in 2H, mostly SZ star projects with GPM >40%.
　　FY17: high single digit growth in contracted sales. As perCICCe, 10~20% YoY growth in saleable resources will yield~10% ramp-up in contracted sales, implying a tiny retracementon the sell-through amid Shenzhen’s tightening environment.
　　However, the company has a sound flexibility of weighing oncommercial properties to hedge the adverse effects ofhome-purchase restrictions on major residential ones （e.g.
　　Shumyip Zhongcheng & Dongling）。
　　Potential catalysts: replenishment of SZ reserves; twoparcels are the most anticipated, in our opinion:
　　2016e: SZ Qianhai parcel: this complex （GFA ~150,000sqm） will be co-operated with SZ Int’l （0152.HK）； SZ Inv. isestimated to have a stake of ~50%.
　　2017e: SZ Pingshan parcel: Shum Yip Group is grantedpriority to acquire the parcel from Nongke （GFA ~200,000sqm, residential usage）， and it will likely be transferred to SZInv. via asset injection, in our view.
　　Valuation and recommendation
　　Trim 2016/17e core NP by 8%/8% to
　　HK$2.85bn/3.63bn to factor in the property tighteningmeasures. The company trades at 8.8x 2016e P/E. MaintainBUY, but cut TP by 11% to HK$4.24 （10.8x 2016e P/E &45% discount to 2016e NAV） implying 25% upside.
　　Risks
　　SZ market worse than expected; land acquisitions fail.