[ET Net News Agency, 9 November 2017] Goldman Sachs fine-tuned its target price for
Brilliance China Automotive (01114) to HK$28.72 from HK$28.8, and maintained its "buy"
rating.
The research house noted that BMW reported 3Q results with equity earnings from
Brilliance BMW amounting to Euro168mn, -6% yoy. Goldman believes the yoy decline is mainly
attributable to higher dealer rebate (granting BMW China dealers the rebate earlier on a
monthly/quarterly basis versus at year-end). As a result, Goldman sees 4Q JV earnings
accelerating yoy.
The research house cut its 2017-20 EPS forecasts by 0.2-5.8% on weaker-than-expected BMW
JV result. That said, Goldman's 2018/19 EPS assumes 46%/34% yoy growth on strong BMW
product cycle and potential LCV loss reduction. (KL)