Daiwa Securities initially rated 0846.HK as a hold with a six-month target price of HK $2.50.

The bank said Mingfa, which mainly develops and sells commercial property rather than residential property, will benefit from a favorable long-term outlook for the Chinese property market, although the stock may now be affected by negative sentiment towards the property sector. however, the smaller proportion of its residential business may make the stock more defensive; the target price of HK $2.50 is 50% off the company's net asset value forecast at the end of 2010.

Mingfa closed at HK $2.29 yesterday.