Brilliance China (01114) shares fell more than 6% in late trading, with the stock last down 6.16% at HK$2.21, seeing a turnover of HK$77.968 million.
This comes after the company earlier issued a profit warning, forecasting that its unaudited pre-tax profit for the first half of the year could decline by up to 61% year-on-year, while net profit after tax and profit attributable to parent company shareholders are both expected to drop by no more than 56%. The main reasons cited include a significant contraction in investment income from associates and joint ventures, as well as a year-on-year decline in interest income for the period.
Citigroup released a research report stating that Brilliance China's expected first-half net profit decline of up to 56% is in line with its projections. The bank maintains a "Buy" rating on the stock with a target price of HK$2.7. Citigroup also expects Brilliance China to distribute a dividend of HK$0.8 per share in the third quarter, amounting to approximately RMB 3.5 billion, which represents about 50% of its cash reserves.