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2026-11-05 12:05:43 Citi published a research report lowering the TP for BRILLIANCE CHI (01114.HK) from HKD2.55 to HKD1.94. The broker said BMW's 3Q results were mixed, with BMW Brilliance sales falling 30% YoY, while dealer incentive support continued and higher capital expenditure could lead to increased depreciation expenses. Citi estimated that under Hong Kong accounting standards (excluding EUR300 million purchase price allocation expenses), BMW Brilliance's 3Q pre-tax profit margin was about 7.3%, down 1.8 ppts YoY and up 3.3 ppts QoQ. Net profit for 3Q may have declined 46% YoY, a slight improvement from the 53% YoY decline recorded in 1H. Citi believes BRILLIANCE CHI's cost-saving strategy could mitigate the impact from an approximately 30% YoY decline in joint venture revenue, with the pre-tax profit margin only falling 1.8 ppts YoY. Overall performance was broadly in line with market expectations, and the broker viewed the decline in BMW Brilliance's profit margin as manageable, while maintaining a "Neutral/High Risk" rating. Looking ahead to 4Q, Citi expects the operating environment to remain challenging, assuming revenue growth of 7% QoQ during the peak sales season and a pre-tax profit margin of 3.9%. After revising BMW Brilliance's sales volume forecasts for 2027 and 2028 to 356,000 units each, Citi lowered its net profit forecasts for 2026 to 2028 by 5% to 9% to RMB1.307 billion, RMB1.04 billion and RMB1.055 billion respectively. (gc/ad)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |