CIMB Research downgraded Asian Property Development Pcl to neutral from outperform, seeing a weak profit outlook for the housing developer. It maintained its stock target price of 6.48 baht ($0.21).

AP shares were down 2.14 percent at 6.85 baht at the midsession break at 0530 GMT. The broader SET index fell 2.04 percent.

Asian Property tripled its January-March earnings to 421 million baht boosted by condominium sales and lower corporate tax. For the company statement, click

The company told analysts it now expected gross margins of around 35 percent for condominiums and 30-31 percent for single detached houses and townhouses, the broker said in a report.

"We came back from AP's post first quarter results analysts' meeting yesterday with a less bullish view ... Management guided for weaker gross margins by saying that the era of high gross margins of close to 40 percent has passed," CIMB said.

"With a softer second quarter outlook and downside risk for 2012 sales, we recommend investors take profit and switch to Sansiri Pcl and Pruksa Real Estate Pcl for cheaper valuations with more upside than downside risk," it said.

1237 (0537 GMT)

(Reporting by Viparat Jantraprap in Bangkok; viparat.jantraprapaweth@thomsonreuters.com)