We downgrade Yanlord from Outperform to NEUTRAL as earnings for FY09 may disappoint and its balance sheet is under more strain. Although presales in Shanghai improved in Nov, we do not expect the rebound to be sustainable. Yanlord's property sales may not benefit much from favourable government policies as it is geared towards the mid- to high-end market. We have chopped our FY09-10 earnings forecasts by 19.9-27.7% to reflect less GFA sold. This reduces our RNAV/share from S$2.30 to S$2.26, which, together with a widening of our RNAV discount from 50% to 70%, leads to a drop in our target price from S$1.15 to S$0.68