Shares of Brilliance China (01114) have plummeted more than 17 percent during the trading session.

At the time of writing, the stock was down 17.46 percent, trading at HK$2.08 with a turnover of HK$159 million.

The sharp decline follows an announcement from BMW Group, a key partner, significantly revising down its core operating expectations for the 2026 fiscal year, with substantial reductions in both profitability and delivery targets.

In terms of financial guidance, BMW has lowered the projected full-year EBIT margin range for its automotive segment from the previous 4-6 percent to 1-3 percent.

The full-year vehicle delivery forecast has been adjusted from "flat year-on-year" to a slight decline.

Group pre-tax profit for the year is now expected to fall by more than 15 percent, a steeper drop than the earlier prediction of a "moderate decline."

For the first quarter of 2026, BMW Group reported revenue of €31.007 billion, an 8.1 percent year-on-year decrease, and pre-tax profit of €2.348 billion, a sharp 24.6 percent decline.

Analysts from Morgan Stanley had previously noted in a report that Brilliance BMW, under Brilliance China, faced significantly higher-than-expected operational pressures last year.

This resulted in Brilliance China's post-tax annual net profit forecast for last year coming in 25 percent below the firm's expectations.

To account for these pressures, Morgan Stanley has lowered its net profit forecasts for Brilliance China for 2026 and 2027 by 7 percent and 8 percent, respectively.

This revision reflects the margin pressures on Brilliance BMW sales, with its vehicle sales declining 10 percent in the first four months of 2026.