[ET Net News Agency, 19 June 2018] Daiwa Research trimmed its target price for
Brilliance China Automotive (01114) to HK$21 from HK$25, and retained its "buy" rating.
The research house believes the market's concerns on the impact of new government
policies on Brilliance are overdone. Daiwa views this as a buying opportunity backed by
likely solid fundamentals ahead.
BMW Brilliance's year-to-May sales volume grew by 12% YoY, while Daiwa expects
accelerated sales growth for rest of the year amid additional volume contribution from the
X3 model. It expects Brilliance's sales to Increase 22% YoY in 2018, meeting management's
guidance of 20% YoY.
Moreover, we note that year-to-date retail price discounts on its key models were
stable, indicating no signs of margin deterioration. Daiwa revised down its assumptions
for 2018-20 on lowered assumptions for BMW Brilliance's sales volume to 472-620k units
from 501-724k units due to weaker-than-expected sales from 5-series and 2-series in first
5 months of 2018. (KL) .