GLP

GLP: Demand contraction and any revisions to China starts and completions will be the key focus for GLP’s 3QFY16 results. The current rate of major leases announced suggests China leasing may disappoint. GLP shares have derated to 0.7x P/B but are still far from trough valuations of peers at 0.2x P/B. Privatization and monetization of the China portfolio are key catalysts but the house sees low risk of this happening in the near term.

For now, the house remains comfortable with its below street forecast, but widens its RNAV discount from 20% to 35%. Hence Target price falls to $1.70 from $2.08