《2010年野村证券盛大深度研究报告全套》(2118页).rar Capital　appreciation We　expect　residential　property　prices　in　Taipei　city　to　be　firm,　given　difficulty　in　land procurement　and　a　relatively　low-cost　borrowing　environment.　We　also　see　escalating demand　for　commercial　properties　from　Chinese　investment　spurred　by　improving political　relations　with　China　and　closer　integration　with　China＇s　economy　through　the Economic　Cooperation　Framework　Agreement.　With　the　overhang　of　mayoral　elections to　be　lifted　after　November,　we　think　the　market　is　becoming　desensitised　to　recent tightening　measures,　and　we　look　for　gradual　recovery　in　the　Taipei　property　market through　2011F.　This　should　have　a　ripple　effect　on　surrounding　Taipei　county, especially　given　the　government＇s　focus　on　urban　development　and　improving　public transportation.　We　initiate　on　Farglory　and　Huaku　with　BUYs.　Both　have　balanced exposure　between　residential　and　commercial　properties,　and　we　project　an　earnings upcycle　in　FY11F-12F,　backed　by　project　launches　in　FY10-12F.　We　look　for　an　FY10- 12F　earnings　CAGR　of　21%　and　FY11F　ROE　of　23%　for　Farglory,　and　a　CAGR　of　15% and　ROE　of　30%　for　Huaku.　These　are　set　against　historically　deep　discounts　to　NAV: 33%　for　Farglory,　26%　for　Huaku.　We　initiate　on　Hung　Poo　at　NEUTRAL,　since　we　do not　expect　strong　revenue　growth　un