Brilliance China Automotive sank by a record after it agreed to give BMW control of their joint venture, diminishing the Chinese carmaker’s exposure to future growth in the world’s largest auto market.
Brilliance fell as much as 30 per cent in Hong Kong trading as a slew of brokerages downgraded the automaker after BMW said on Thursday it is increasing its stake in the venture to 75 per cent from 50 per cent. The partnership accounted for most of Brilliance’s profit last year.
Citigroup cut its price target by 73 per cent and recommended selling the shares, saying the “unfair” deal will hurt the company’s earnings, while CLSA, a Hong Kong-headquartered investment group, said minority shareholders are the losers.
The agreement gives BMW a bigger say over its business in China, and lets it keep more of the earnings it generates in the massive market.
“A smaller stake in the joint venture means less earnings contribution to Brilliance China and that’s the only thing investors are sure of right now,” said Angus Chan, Shanghai-based an analyst at Bocom International, a subsidiary of Bank of Communications in Hong Kong.
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The pact shows China’s government is following through on its pledge to open up the economy to foreign ownership after the 50:50 joint-venture rule that has restricted global brands’ access to the market for decades. BMW said its deal will be completed in 2022.
BMW agreed to pay the Chinese automaker $4.1 billion for the 25 per cent stake, valuing the 50 per cent currently owned by Brilliance in the venture at $8.2bn.
Shares of Brilliance are the worst performer this year among Chinese car stocks traded in Hong Kong. Other Chinese auto stocks have also plunged amid investor concerns that the companies will be left with a smaller share of their ventures’ future earnings should their global partners increase control.
China’s policy change gives foreign carmakers such as Daimler, Volkswagen and General Motors a chance to obtain a bigger control over their businesses in China. In addition to being the world’s largest electric-car market, China is fast becoming a major development and production centre for such vehicles.
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EMERGENCY PHONE NUMBERS
Estijaba – 8001717 – number to call to request coronavirus testing
Ministry of Health and Prevention – 80011111
Dubai Health Authority – 800342 – The number to book a free video or voice consultation with a doctor or connect to a local health centre
Emirates airline – 600555555
Etihad Airways – 600555666
Ambulance – 998
Knowledge and Human Development Authority – 8005432 ext. 4 for Covid-19 queries
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Jawan
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The Perfect Couple
Starring: Nicole Kidman, Liev Schreiber, Jack Reynor
Creator: Jenna Lamia
Rating: 3/5
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BEETLEJUICE BEETLEJUICE
Starring: Winona Ryder, Michael Keaton, Jenny Ortega
Director: Tim Burton
Rating: 3/5
Company%20Profile
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Greatest of All Time
Starring: Vijay, Sneha, Prashanth, Prabhu Deva, Mohan
Israel Palestine on Swedish TV 1958-1989
Director: Goran Hugo Olsson
Rating: 5/5
if you go
The flights
Etihad, Emirates and Singapore Airlines fly direct from the UAE to Singapore from Dh2,265 return including taxes. The flight takes about 7 hours.
The hotel
Rooms at the M Social Singapore cost from SG $179 (Dh488) per night including taxes.
The tour
Makan Makan Walking group tours costs from SG $90 (Dh245) per person for about three hours. Tailor-made tours can be arranged. For details go to www.woknstroll.com.sg
The specs
Engine: 2.7-litre 4-cylinder Turbomax
Power: 310hp
Torque: 583Nm
Transmission: 8-speed automatic
Price: From Dh192,500
On sale: Now
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%3Cp%3E%3Cstrong%3EName%3A%3C%2Fstrong%3E%20Haltia.ai%0D%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202023%0D%3Cbr%3E%3Cstrong%3ECo-founders%3A%3C%2Fstrong%3E%20Arto%20Bendiken%20and%20Talal%20Thabet%0D%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%2C%20UAE%0D%3Cbr%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20AI%0D%3Cbr%3E%3Cstrong%3ENumber%20of%20employees%3A%3C%2Fstrong%3E%2041%0D%3Cbr%3E%3Cstrong%3EFunding%3A%3C%2Fstrong%3E%20About%20%241.7%20million%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20Self%2C%20family%20and%20friends%26nbsp%3B%3C%2Fp%3E%0A