We maintain NEUTRAL on Glomac but with a lower TP of MYR0.87 (5% upside). We believe the company will likely miss its sales target of MYR500m, judging from its pipeline launches, which may not suit currentmarket conditions. 9MFY16 new sales only amounted to MYR131m, while unbilled sales have also declined to MYR593m. Therefore, we cut our FY17-18 earnings forecasts by around 15%

Lower TP to MYR0.87. We are not positive on Glomac’s property sales outlook. Key pipeline launches in 2H include Saujana KLIA (GDV: MYR217m) and Centro V (GDV: MYR263m). While prospects for Saujana KLIA are more promising as it is an affordable township development, Centro V, which comprises service apartments and shop offices, may not suit the market given the weak property buying sentiment. Our revised MYR0.87 TP (from MYR0.98) is based on an unchanged 55% discount to RNAV, as we fine-tune our salesand investment property value assumptions in our RNAV estimate.

Township projects to underpin sales. There are only a few township projects that would drive Glomac’s property sales going forward. These are Lakeside Residences, Saujana KLIA, Saujana Rawang and Bandar Saujana Utama. As such, we expect Glomac to achieve only about MYR350m for FY16 (Apr).Cut earnings forecast. Given the challenging market conditions, we lower our FY17-18 earnings projections by about 15%.

3QFY16 results highlights. Results were within our estimate but missed market expectation by 9%. 9MFY16 headline net profit was lower due to a MYR30m fair value gain on Glo Damansara in 3QFY15 as a result of reclassiication. Meanwhile, net gearing eased to 26% from 35% last year. Same as FY15, a 2 sen interim dividend was declared.