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M Stanley Cuts BRILLIANCE CHI (01114.HK) TP to HKD2.9, Rating Equalweight
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M Stanley issued a report stating that the operating pressure faced by BMW Brilliance, a subsidiary of BRILLIANCE CHI (01114.HK), last year far exceeded expectations, leading to the companys net profit after tax for last year being 25% below the brokers prior forecast. To reflect such pressure, the broker lowered its net profit forecasts for BRILLIANCE CHI for 2026 and 2027 by 7% and 8%, respectively, to factor in margin pressure from BMW Brilliances sales, with its sales volume declining 10% in the first four months of 2026. The broker noted that despite cutting its earnings forecasts, it raised the target price-to-earnings multiple for the BMW Brilliance joint venture from 3x to 4x. It believes part of the profit pressure has already been reflected in the profit decline for FY2025 and expects such pressure to ease going forward. In addition, the broker made limited revisions to the operating forecasts of BRILLIANCE CHIs self-owned businesses. Based on the sum-of-the-parts (SoTP) valuation method, M Stanley lowered its TP for BRILLIANCE CHI from HKD3.4 by 15% to HKD2.9 and maintained an Equalweight rating. (da/a) Auto-translated by AI This article was automatically translated by AI, the original language 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. More Details
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