Morgan Stanley raises target price of BRILLIANCE CHI(01114) to HK$3.4, and rates it as "in line with the market."
Daiwa Securities predicts that the net profit margin of the Huachen BMW joint venture company is more resilient at the moment, with an estimated increase of 0.5 percentage points between 2025 and 2027.
Morgan Stanley released a research report stating that BRILLIANCE CHI (01114) issued a profit warning reflecting pressure on performance, but it is still better than previous expectations because the unit's profitability is relatively stable. Morgan Stanley believes that the net profit margin of the joint venture between Brilliance BMW has more resilience, with an estimated increase of 0.5 percentage points between 2025 and 2027, but forecasts a decrease in sales volume by about 6% during that period. Morgan Stanley has raised the target price of BRILLIANCE CHI from 3 Hong Kong dollars to 3.4 Hong Kong dollars, with a rating of "in line with the market".
BRILLIANCE CHI issued a profit warning, expecting a decrease of 34% to 36% in pre-tax profit for the six months ending in June compared to the same period in 2024, mainly due to the decline in performance of the joint venture with Brilliance BMW. However, it is expected that after-tax profits will increase by 10% to 13% year-on-year, mainly due to a reduction in dividend distribution during the period, resulting in a significant decrease of 83% in pre-tax income.
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