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2026-09-03 13:05:07 The profitability of BRILLIANCE CHI (01114.HK)'s BMW joint venture (BBA) has deteriorated since 2Q26, UBS said in a research report. Together with the upcoming interim DPS of HKD0.5, the broker decided to cut the TP from HKD4 to HKD2 and reiterated its Neutral rating. The broker noted that BMW's new Neue Klasse electric vehicle iX3 has begun pre-sales at the Chengdu Auto Show, with a starting price of RMB269,900, similar to Tesla Model Y and about 10% higher than Xiaomi YU7. However, amid extremely intense competition in China's electric vehicle market, visibility on sustainable sales volume and profitability remains low. Even if the iX3 can offset declining internal combustion engine vehicle sales and achieve a 3% net profit margin or RMB10,000 net profit per vehicle, it would only compensate for the transition from fuel vehicles rather than mark a turnaround in joint venture profitability. UBS assumed Neue Klasse faces significant challenges in driving a recovery in BBA profitability. ~ AASTOCKS Financial News Website: www.aastocks.com | |