Brilliance China Soars as Net Beats Estimates: Hong Kong Mover

Brilliance China Automotive Holdings (1114) surged to a record in Hong Kong trading on first-half profit that beat estimates and higher projected vehicle sales volume for the rest of this year.

Brilliance, the local manufacturing partner of Bayerische Motoren Werke AG (BMW), climbed as much as 13 percent to HK$12, the highest since it started trading in 1999, before changing hands at HK$11.62 as of 11:44 a.m. local time.

BMW has said China will probably surpass the U.S. as its top market this year as the brand enters more communities and wins buyers with its 3- and 5-series sedans. The automaker, which trails Volkswagen AG (VOW)’s Audi in China, has grown faster than its competitor for at least four straight years since 2009.

“We see these results as a continuation of Brilliance’s growth trajectory. Brilliance expects 50 more BMW dealers to open in H2, which should support growth in future years,” analysts at Sanford C. Bernstein & Co. led by Max Warburton wrote in a note yesterday. “We see Brilliance as the Chinese auto stock with the best guaranteed growth.”

Brilliance reported a half-year net income gain of 52 percent to 2.03 billion yuan ($332 million) on Aug. 13, beating the 1.4 billion yuan median estimate of five analysts surveyed by Bloomberg.

Brilliance announced the local production of one new BMW model a year from 2015 to 2017 at an earnings briefing in Hong Kong. It told analysts in a separate briefing that it expects to sell 205,000 units this year, up from an earlier estimate of 200,000, and projects a 30 percent volume growth next year, Bernstein said.

Today’s share-price surge extends Brilliance’s advance this year to 22 percent, compared with a 0.1 percent decline for the benchmark Hang Seng Index.

To contact Bloomberg News staff for this story: Alexandra Ho in Shanghai at aho113@bloomberg.net

To contact the editor responsible for this story: Chua Kong Ho at kchua6@bloomberg.net

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