What we recommend

In our opinion, CR Land’s projectpipeline will underpin sustainedrental growth for the company overthe next few years. Moreover, wethink the Nanning MIXc case alsoillustrates that having a premiermall would help it to achievepremium pricing for its residentialcomponent (its achieved ASP of overCNY20,000/sqm in 2013 was a record for Nanning). We reiterateour Buy (1) rating on CR Land with anew 6-month target price ofHKD28.3, based on an unchanged10% discount to our end-2004 NAVof HKD31.40 (vs. end-2013 NAV ofHKD30.20). The key risk to our callis a nationwide plunge in demand.

How we differ

Unlike many others, we have done athorough bottom-up analysis of themalls in China’s tier-2 cities andconclude that the performance of afew top-tier malls could be differentfrom that of the industry as a whole.

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