According to a report published by J.P. Morgan Chase, Ryan Real Estate (00272-HK)'s performance last year fell short of expectations, financial leverage was high, and operating costs increased. It is believed that the stock offering was to adjust the balance sheet and support the construction progress of existing projects, but dilutes book value and net asset value by 16-19%. The bank downgraded its rating from “increased holdings” to “neutral,” and the target price was reduced by 35% from 4.2 yuan to 2.75 yuan. According to the report, Ruifang's core profit fell 89% year on year to 142 million yuan (same below) last year, 80% lower than the bank's forecast. Despite high interest expenses and lack of delivery items, as expected by the market, operating and current expenses were higher than expected, and Motong lowered its net asset value forecast for the end of this year by 44%. Ruifang announced a three-for-one fund to raise HK$3.6-4.1 billion at a stock price of $1.84 billion, a 70% discount on net asset value compared to December this year, corresponding to the 2012 market account rate of 0.35 times. Motong believes it is close to the liquidation price, yet major shareholders have promised to participate in the stock offering.