中国金茂(00817) 　　What's new 　　China Jinmao released its 10M16 sales: we expect it toachieve sales of Rmb40bn (incl. primary land sales) in FY16. 　　Comments 　　Delivery of results falls behind performance ofcontracted sales (FY15: YoY +40%; FY16e: +30%) as: 　　FY16: core NP estimated to grow ~10% YoY, while core EPS(basic) only +2% YoY as it is diluted by larger share base. 　　FY17~18: we believe the growth rate will flatten to ~20%over the next two years, a common KPI for SOE managementto state in share option agreements.FY17e contracted sales: Rmb50bn, steady progress towardsits target of Rmb80bn (incl. primary land sales) by FY19. 　　Estimated growth of new starts +30~40% YoY in FY17 couldgive sufficient back-up. 　　Watch for any slowdown in the primary land markets of tier-1and core tier-2 cities �C such as Nanjing �C which are beingmore strictly managed & supervised by local governments. 　　Margins: new parcels coming in to give more pressure.YTD average land cost per GFA (newly acquired) could be aslarge as ~90% of 10M16’s ASP, although those parcels are alllocated in hot cities, such as Shanghai, Shenzhen, Nanjing, etc. 　　Defensive valuations. The company now trades at a 52%discount to 2016e NAV vs. the sector average of 46%. 　　Valuation and recommendation 　　We trim FY16e/17e core NP by 18%/12% toHK$3.14bn/3.82bn on slow delivery. Maintain BUY ratingbut cut TP by 14.5% to HK$2.59 (10.4x 2016e P/E),implying 26% upside and 40% discount to 2016e NAV. Thecompany currently trades at 8.1x 2016e P/E. 　　Risks 　　Delivery is better than expected.