Barclays kept the Union's (1,200.HK) target price of HK$3.06 (book value) and holdings reduction ratings unchanged. Barclays warned investors not to fall into the “value trap” of the American Union Group; the bank said that if cash held by the Union Group is deducted from its market value, the stock price is equivalent to 3 times the price-earnings ratio based on general expectations. The valuation is attractive, and it can be bought. However, Barclays pointed out that this is not only an erroneous valuation calculation method, but also does not reflect the stock's trading pattern. Barclays said that in the 15 years since the Union Group went public, its cash reserves have almost never been paid to shareholders, so the cash held by the company is actually an operating asset; in the 1998-2003 environment of low trading volume/falling prices, the stock price of the Union Group is equivalent to book value. As the current business environment weakens, Barclays believes that the stock price will return to this level again. The stock fell 0.5% yesterday to close at HK$3.92.