[ET Net News Agency, 8 January 2020] Jefferies Research assumed coverage on Brilliance
China Automotive (01114) with a "buy" rating and a target price of HK$10.8.
The research house said Brilliance is set to transfer 25% equity interest in BBA (BMW
Brilliance Automotive) to BMW likely by 2022 for Rmb29bn. It would halve Brilliance's
profit shared from BBA after transfer completion but should have a limited impact on
2020/21 financial performance.
Brilliance announced a special dividend, which could be a common practice before
transaction completion, to compensate investors. It may disappoint the market if the
company declares less or no special dividend in the near term. Jefferies believes the high
dividend yield is one of the reasons to hold or buy Brilliance. (KL)