Credit Suisse lowered the target price of Associated Press Group (1200.HK) from HK$5.93 to HK$5.18, but maintained the stock's strong market rating due to valuation reasons. According to Credit Suisse, cash of HK$2.54 per share in FY2011 currently accounts for 67% of the stock's market value; assuming a dividend rate of 50% for FY11 (FY09:83%; FY10:80%), equivalent to a dividend yield of 6.9%. Credit Suisse believes that the stock already reflects the worst expectations, and that the stock price is equivalent to 2.76 times the price-earnings ratio after excluding cash dividends. The stock will be supported by a recovery in real estate market sentiment and volume. Credit Suisse expects Associated Union Group's core profit for the first half of the year to be the same as the same period last year, down 15% from the first half of the year to HK$245 million. The company is expected to announce interim results on August 25. The stock rose 3.00% yesterday to close at HK$3.77.