Soufun Holdings Ltd.: Uneven Development in China’s Housing Market Continues to Favor SFUN; Adjusted Commission Rate Aiming At Profitability in 4Q16; Maintain BUY
SFUN will report 2Q16 results before the U.S. markets open on August 25, 2016 with an 8am EST conference call. We do not expect SFUN to deliver a turnaround 2Q16, but we do expect the company to reach breakeven in 4Q16 after two years of restructuring. The real estate market in China is developed unevenly as prices and volumes in major cities continue to increase while prices and volumes continue to go down in lower tier cities. Fortunately, SFUN’s business activities are concentrated around 30 top cities with the most active real estate activities. As we expect these markets to continue to do well, we maintain our Buy rating on the stock and price target of $9.00.