Macquarie downgraded Super Modern Agriculture (0682.HK) from outperforming to outperforming, leaving its target price unchanged at HK $4.60 after the company said it would no longer consider issuing new shares in view of deteriorating market conditions.

Macquarie said Chaoda's valuation looks cheap at 4.4 times forecast earnings in fiscal 2009, but it will outperform the market before the company's cash flow becomes clearer and safer. Chaoda signaled at a news conference that it was uncertain whether it would be able to repay high-yield bonds maturing in 2010. Therefore, the market expects Chaoda to reissue financing at some point, which is still an uncertain factor hanging over the stock.