A spillover of China’s property market stress to the rest of Asia will slow the region’s earnings and returns, Goldman Sachs strategists wrote in note, slashing multiple price targets for the MSCI Asia Pacific ex Japan Index.

“We lower our 2023 regional earnings growth forecast” from 0 to -2% taking into account revised China estimates due to property risks as well as the nation’s linkages to Asia, strategists including Timothy Moe wrote. “This includes reducing earnings in Australia, Hong Kong, and Malaysia.”

Moe and the team slashed the 12-month target for MSCI’s gauge for Asia Pacific ex Japan stocks to 555 from 580. That implies a 10% return for the gauge from Thursday’s close, compared with a 23% advance based on consensus stock-target estimates, according to data compiled by Bloomberg.

Chinese real estate stocks are close to losing all the gains notched during last year’s massive reopening rally, a dubious milestone that may further stoke concerns about China and a possible spillover of its problems.

Global investors have been shedding the nation’s blue-chip stocks during the longest stretch of outflows on record. Active EM funds were on average underweight China by close to 100 basis points as of the second quarter, turning more bearish from a gap of 24 basis points at the end of March.

Goldman’s move to slash its outlook for Asia Pacific excluding Japan comes a few days after it lowered its view on Chinese equities for a second time in three months, citing the deepening stress in the property sector and a lack of powerful stimulus by the government.

Read: Goldman Cuts China Stock Targets on Renewed Property Concerns

The strategists today also slashed their 3-month target for the gauge to 505 from 540, and the 6-month objective to 530 from 560.

They kept Korea, Japan and China as key overweight allocations in Asia, citing next year’s earnings, improvements in corporate governance and potential policy support as the respective reasons for each market.