Hong Kong powerhouses South China were defeated 3-1 by Kedah of Malaysia in a group D AFC Cup match at Mong Kok Stadium last night. With only one point from their first three matches, the Caroliners now need a miracle to advance to the next stage. They still have three matches left in the group stage, including away matches against the Malaysian side and group leaders Home United of Singapore. Home United top the group after three wins in a row. They defeated visitors Victory SC of Maldives 2-1 last night. South China coach Jose Luis admitted after the loss that they could only try to salavage some pride in the remaining three matches, although he did not rule out the possibility of making it to the knockout stage. 'Anything can happen in football,' said the Portuguese coach. 'But I would say our priority this season now is the domestic league.' The coach also said they paid the price for a number of blunders that allowed their opponent to score. 'There are many excuses when you lose a match, but we did make mistakes to give away goals tonight. Also we have many players who do not have first-team experience and it is very difficult for them to play in a regional competition.' With only three expatriates allowed in the tournament, South China had to rely on many reserve players. There was a glimpse of hope against Kedah when central defender Cristiano Pereira levelled the score with a header in the 59th minute, after Kedah's Baddrol Bakhtiar scored in the 31st minute. But South China's joy was short-lived. Marlon James had an easy task of tapping home from close range in the 65th minute and Samransak Kram settled the matters when he made it 3-1 with five minutes to play. South China's Tales Schutz had a shot denied by the post three minutes later. Kitchee, meanwhile, lost 2-1 to Perak of Malaysia in an away match in group E last night.