What happened
We remove Lushang from our Conviction List as we see better risk/reward inBCD (CL-Buy) but maintain Buy as we still like its strong positioning inShandong and higher earnings growth prospects compared to peers. Welower our 12-m TP by 6.5% to Rmb8.23, implying 20% upside, (still 30%discount to our end-2012E NAV) mainly due to slower asset turnover andarising execution concerns with 75% of new launches clustered in 2H. Sincewe added Lushang to CL-Buy on March 8, 2012, it rose 3.6% vs. CSI300 up0.2%. Over the last 12 months, Lushang fell 8.1% vs. CSI300 down 10.6%.