The Company’s revenue is expected to grow fast. The Company’s totalcontracted sales is likely to grow fast with sufficient saleable resources inhigher tier cities. In addition, we expect rental income to increase at a CAGRof 29.4% between 2015-2018.
　　We expect the Company's margins to be consolidated. The Company'sgross margins are expected to remain at around 35.0% between 2016 and2018 due to its quality land bank and an increased amount of saleableresources in Shenzhen. In addition, funding costs should remain at low levels,which could consolidate its profitability.
　　Shenzhen Invest’s 1H16 underlying net profit missed our expectation by16.1%. Total revenue increased 1.6% YoY to HK$6.383 bn in 1H16. Theunderlying net profit increased 40.0% YoY to HK$0.978 bn. We revise downthe underlying net profit forecasts by 1.6%, 4.9% and 7.3% to HK$2.867bn, HK$3.366 bn and HK$3.975 bn in 2016, 2017 and 2018, respectively.
　　Trim TP but maintain "Buy". Policy tightening and RMB depreciation arelikely to exert downside pressures on the Company's valuation. Therefore, werevise down our target price from HK$4.80 to HK$4.33, which implies a 45%discount to its 2016E NAV of HK$7.88 per share, 11.2x underlying 2016 PERand 0.9x 2016 PBR. We maintain our investment rating as “Buy”。 Risk:
　　lower-than-expected contracted sales and potential losses on disposal of landreserves.