SouFun -13.7% on price cut, downgrade; E-House, Leju also off

|About: SouFun Holdings Limited (SFUN)|By:, SA News Editor

SouFun (SFUN) has announced a 40% price cut on subscription fees for secondary listing customers (a high-margin business that's 25% of revenue), Deutsche reports. The firm sees this as a "major downside surprise for the market," and is downgrading SouFun to Hold.

Deutsche also thinks SouFun is "facing deteriorating economics around its SouFun card business." It attributes this to aggressive competition in tier-1 cities, and a "land-grabbing strategy in lower-tier cities along with deepening geographical penetration."

E-House (EJ -5.8%) and Leju (LEJU -6.6%) are again going in the same direction as SouFun. Shares of all 3 companies fell on Tuesday following downbeat land sale data.