Deutsche Bank downgraded the Chinese real estate listing site to "hold" from "buy," lowering its price target to $11. Analyst Vivian Hao wrote that a recent 40% price cut on nationwide subscription fees to secondary listing customers is a "major downside surprise for the market."
"We believe SouFun is facing deteriorating economics around its SouFun card business such that take-rate with developers will continue to decline," Hao wrote. "We attribute this to: 1) aggressive effective take-rate offered by competitor in tier-1 cities, and 2) land grabbing strategy in lower-tier cities along with deepening geographical penetration."
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Separately, TheStreet Ratings team rates SOUFUN HLDGS LTD as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate SOUFUN HLDGS LTD (SFUN) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."