Citi has issued a research report stating that after a management meeting with Brilliance China (01114) yesterday, it has downgraded the stock's rating from "Buy/High Risk" to "Neutral/High Risk."

The bank believes the current risk-reward profile for the stock is balanced and has slightly reduced its target price from HK$2.7 to HK$2.55. Key considerations include: (1) Low sales visibility for the Neue Klasse iX3, as the final pricing aligns with delayed deliveries (expected in November 2026), potentially allowing competitors to seize orders during the two-month window; (2) The current high proportion of fuel vehicle sales (over 90%) places sales pressure on Brilliance BMW from the second half of this year into next year; (3) The interim dividend is reasonable at HK$0.5 per share; (4) Despite anticipated declines in sales over the next two years, the bank expects Brilliance BMW's net profit margin to remain resilient, supported by ongoing cost reductions and a rising export share, which will underpin future dividend distributions.