Buy Sun Hung Kai Properties Merrill Lynch has lowered its earnings forecast by 17 per cent for this year but has maintained its 'buy' call, saying investors were too bearish on the developer, fearing it might dump inventory at a loss. 'Short land bank, low carrying costs and inability to replenish land on the cheap' would be the reasons for Sun Hung Kai's unwillingness to sell at a loss, Merrill said. However, the investment bank still pencilled in a HK$820 million provision for unsold units at Ocean Shore and Park Island. Merrill expects earnings this year to fall 14.9 per cent to $3.02 per share. The brokerage has a price target of $48.20 per share on the counter. Buy Bank of East Asia Daiwa Institute of Research has reiterated its '1' or 'outperform' rating based on the bank's attractive valuation. Ratings agency Fitch downgraded Bank of East Asia to 'C' from 'B/C' and changed its outlook to negative in response to the economic fallout from the Sars outbreak. But Daiwa believed the credit downgrade would not have a negative impact on the bank's share price, as it was already trading at a big discount compared with its peer, Hang Seng Bank. Daiwa has a price target of $17.70 on the counter, which lost 1.03 per cent yesterday to close at $14.45. Sell Legend Group BOC International has assigned an 'underperform' rating on the computer maker due to a lack of new growth drivers. Legend had said it would spend at least one billion yuan (about HK$9.37 million) a year on product development to boost sales in overseas markets. But BOC International said it would not be an easy task for Legend to break into international markets in light of fierce competition. The investment bank expects Legend's earnings to be little changed at 14 cents a share this year. 'Legend is currently trading at a 12-month prospective rolling price-to-earnings multiple of 13.3 times, which does not look particularly high compared with its historical trend,' the brokerage said.