Bank of America Securities released a research report indicating that BAIC MOTOR (01958) reported fourth-quarter revenue of RMB 43 billion, representing an 11% year-on-year decline but a 13% sequential increase. The gross profit margin was 7.8%, down 0.6 percentage points year-on-year and 2 percentage points quarter-on-quarter. Based on minority interests, the bank estimated that Beijing Benz, in which BAIC holds a 51% stake, saw its fourth-quarter net profit decline by 27% year-on-year, though it increased by 22% sequentially. Sales volume fell 22% year-on-year but rose 9% quarter-on-quarter, reflecting increased discounts to stimulate sales amid intense competition. BAIC's fourth-quarter net profit was RMB 71 million, compared to a net loss of RMB 2.1 billion in the same period of 2024. This improvement was primarily due to a one-time disposal gain of RMB 2.2 billion from the sale of a 51% stake in BAIC International recorded in November of last year. The target price for BAIC was reduced from HK$1.80 to HK$1.54, with an "Underperform" rating reiterated. The bank expects profits from Beijing Benz to be offset by losses from BAIC's self-owned brands. The report noted that the loss from joint ventures and associates in 2025 was RMB 471 million, compared to a loss of RMB 1.3 billion in 2024, mainly driven by a recovery in sales volume at Beijing Hyundai. The full-year net profit for 2025 was RMB 123 million, aligning with the earlier preliminary results announcement. Following the fourth-quarter performance, the bank raised its revenue forecasts for 2026 and 2027 by 2% each, primarily due to an upward revision in sales volume projections for BAIC's self-owned brands. However, considering increased competition and higher discounts, the gross profit margin forecasts for the same periods were lowered by 1.3 percentage points each. Overall, the profit forecasts for 2026 and 2027 were reduced by 7% and 34%, respectively.