DBS maintained its 0088.HK buy rating, raising its target price to HK $5.25 from HK $4.33, narrowing to 50 per cent from its estimated net asset value in June 2010; the extent of the discount on the previous target price was not disclosed.

According to DBS, the current value of the stock represents a 60 per cent discount to its expected current net asset value. DBS said it thought such a big discount was unreasonable because the company was realizing the value of its assets.

DBS added that Dachang Group was able to continue its generous dividend policy because of the net cash gain of HK $500 million from the recent property disposal. DBS raised Dachang's profit forecasts for fiscal years 2010 and 2011 by 24% and 21%, respectively, because the company did not lock in the value of high-end projects.

The stock rose 2.4 per cent to HK $4.27 yesterday.