Tai Fook maintains its far East Development (0035.HK) buy rating, with a target price of HK $4.01.

Dafu said that far East Development's current share price is 69% off the bank's estimated net asset value per share, corresponding to a forward price-to-earnings ratio of 14.8 times for fiscal year 2011. Given the company's long-term business expansion prospects and value-added investment, its share price is overvalued. Dafu also said that the company is currently expanding its hotel portfolio through additional development or acquisitions, which will create value for future net asset value growth.

The stock closed yesterday at HK $2.27.