R&F Properties in line with expectations
　　R&F Properties announced its FY16 results: revenue wasRmb53.73bn （+21% YoY） and core net profit was Rmb6.57bn,（+10% YoY）， with core diluted EPS of Rmb2.04, a full-year DPSof Rmb1.0 （vs. Rmb0.9/sh guided）， and dividend yield at 9.2%.
　　GPM <30% due to product mix. Contribution of Beijing &Guangzhou （GPM ~40%） was 29% vs. 55% in FY15.
　　A small expansion of net gearing. A narrow +8ppt rise from1H16 to 177%.
　　Smart land replenishment. It purchased attributable 5mnsqm at an average floor price Rmb3,500/sqm in hot cities.
　　Trends to watch
　　FY17 sales target at Rmb73bn （+20% YoY）， by abundantsaleable resources Rmb140bn & fast construction （+24% YoY）。
　　Top line on track; GPM back to 30%. FY17e top line,Rmb62.2bn （+16% YoY）， is after booked GFA 4.8mn sqm （byR&F） & booked ASP at Rmb12k~12.5k/sqm （CICCe）。 GPM ofproducts sold but undelivered （3.4mn sqm） is ~30% （CICCe）。
　　Net gearing well controllable, with land purchase to scaleback. We believe it could get a positive operating cash flow.
　　Handsome DPS to continue. We expect it to exceedRmb1.0/sh in FY17e supported by a fine growth of core CNP.
　　Earnings forecast
　　We slightly trim FY17e core NP by 1% to Rmb7.5bn dueto adjusted delivery schedule; introduce FY18e core NP atRmb8.4bn （+12% YoY） with core NPM f 12.1%.
　　Valuation and recommendation
　　The stock is trading at 4.6x 2017e P/E. Maintain BUY; hike TPby 11% to HK$15.15 （25% upside） for itsbetter-than-expected land purchase. New TP is 5.8x 2017e P/Eand a 33% discount to 2017e NAV.
　　Risks
　　Over land replenishments in 2017e.