[ET Net News Agency, 12 October 2018] BMW announced its intention to increase its stake
in the BMW Brilliance Automotive (BBA) JV from 50% to 75%. The company has
signed an agreement with Brilliance China Automotive (01114) on a purchase price of
EUR3.6bn (RMB29bn).
HSBC Global Research said the price tag implies book value will be written up
significantly, which would result in a revaluation gain for Brilliance's remaining 25%
stake.
It maintained its "buy" rating, and lowered its target price to HK$13.1 from HK$14.2.
HSBC said risk in the China autos sector has risen as a result of increasing China-US
trade war tensions, prompting us to assign a lower target PE multiple. (KL)