Core Viewpoint - Brilliance Chi (01114) reported a significant decline in net profit for the fiscal year ending December 31, 2024, with a 59.91% decrease in profit attributable to shareholders, amounting to 3.101 billion RMB [1] Financial Performance - The company's revenue for the year was 1.096 billion RMB, reflecting a slight decrease of 2.27% year-on-year [1] - Basic earnings per share were reported at 0.61465 RMB [1] Business Segments - Revenue from automotive parts sales increased, driven by a steady rise in orders from electric and hybrid vehicle manufacturers [1] - The company has also begun selling non-BMW vehicles, contributing to revenue growth [1] - However, the increase in automotive parts sales was insufficient to offset the decline in automotive finance revenue, which was impacted by intensified market competition [1]

Financial Performance - For the fiscal year ending December 31, 2024, the company reported total revenue of RMB 1,095,949,000, a decrease of 2.5% from RMB 1,121,454,000 in 2023[3] - Gross profit for the same period was RMB 193,880,000, down 32.8% from RMB 288,479,000 in the previous year[3] - The company's net profit for the year was RMB 3,045,624,000, a significant decline of 60.7% compared to RMB 7,736,451,000 in 2023[4] - Basic and diluted earnings per share decreased to RMB 0.61465 from RMB 1.53312, reflecting a drop of 59.9%[4] - Total comprehensive income for the year was RMB 2,098,327,000, down 74.7% from RMB 8,296,150,000 in 2023[6] - The company's total liabilities decreased to RMB 1,835,649,000 from RMB 3,178,664,000, a reduction of 42.3%[9] - The company's equity attributable to shareholders decreased to RMB 26,060,978,000 from RMB 51,118,104,000, a decline of 48.9%[9] - The company's consolidated revenue for the year ending December 31, 2024, was RMB 1,095,900,000, a slight decrease of 2.3% from RMB 1,121,500,000 in 2023[71] - The group's profit attributable to equity holders decreased by 60.0% from RMB 7,735,000,000 in 2023 to RMB 3,101,100,000 in 2024, with basic earnings per share dropping from RMB 1.53312 to RMB 0.61465[77] Assets and Liabilities - Non-current assets decreased to RMB 15,686,102,000 from RMB 19,851,940,000, a decline of 21.5%[8] - Current assets also saw a significant drop to RMB 13,419,613,000 from RMB 35,302,680,000, a decrease of 61.9%[8] - The company reported a total asset value of RMB 29,105,715,000 for 2024, with total liabilities amounting to RMB 2,007,834,000[37] - Total assets decreased from RMB 55,154,600,000 in 2023 to RMB 29,105,700,000 in 2024, with total liabilities reducing from RMB 3,263,500,000 to RMB 2,007,800,000[80] Revenue Sources - Sales of non-BMW vehicles and automotive parts amounted to RMB 893,092,000, up 6.1% from RMB 842,240,000 in the previous year[27] - Interest and service fee income from automotive financial services was RMB 202,857,000, down 27.3% from RMB 279,214,000 in the previous year[27] - The largest customer contributed approximately RMB 106,063,000, accounting for 10% of total revenue, compared to 14% from RMB 156,535,000 in the previous year[27] - Total sales for the year 2024 reached RMB 893,092,000, an increase from RMB 842,240,000 in 2023, representing a growth of approximately 6.06%[28] - Sales in China amounted to RMB 751,784,000 in 2024, up from RMB 714,091,000 in 2023, indicating a growth of about 5.28%[28] Expenses and Costs - Sales costs increased by 8.3% to RMB 902,100,000 in 2024, leading to a gross profit decline of 32.8% to RMB 193,900,000[71] - The gross profit margin decreased from 25.7% in 2023 to 17.7% in 2024, primarily due to rising raw material costs and decreased profitability in automotive finance[71] - Interest income for the year 2024 was RMB 417,838,000, a decrease from RMB 670,174,000 in 2023[33][35] - General and administrative expenses rose by 22.3% from RMB 432,300,000 in 2023 to RMB 528,600,000 in 2024, with the percentage of revenue increasing from 38.5% to 48.2%[72] Investments and Acquisitions - The company has undergone a significant acquisition, with Shenyang Automotive acquiring 100% equity of Brilliance Automotive Group, making it the largest shareholder[11] - The company plans to introduce more new BMW internal combustion engine models and BEVs in the coming years, with local production of the "Neue Klasse" model set to begin in 2026[66] - A total investment of RMB 10 billion is underway for the sixth-generation battery project, which is progressing as planned[66] - The group has committed to investing RMB 1,340,000,000 in Jinbei Shenyang to regain control and has reached an agreement for RMB 451,400,000 in compensation for relocation costs[76] Market Performance - The total sales volume of vehicles in China reached 31.5 million units in 2024, representing a growth of 4.6% compared to 2023[62] - Passenger vehicle sales in China grew by 5.2% to 27.4 million units in 2024, highlighting stable domestic market demand[62] - NEV sales surged to 11.8 million units in 2024, representing a 24.2% increase year-over-year, accounting for 43% of total passenger car sales[63] - Luxury passenger car sales grew by 12.8% to 5.1 million units, outperforming the overall market due to strong consumer demand for high-end features and government support[63] Employee and Governance - As of December 31, 2024, the company employed approximately 1,600 employees, an increase from about 1,200 employees as of December 31, 2023[96] - Employee costs for the year ended December 31, 2024, amounted to RMB 258,300,000, compared to RMB 238,100,000 for the year ended December 31, 2023[96] - The company is committed to maintaining high corporate governance standards and has adhered to all provisions of the Corporate Governance Code for the fiscal year ending December 31, 2024, with one exception regarding the separation of roles between the Chairman and CEO[115] Financial Reporting and Compliance - The adoption of revised Hong Kong Financial Reporting Standards is expected to have no significant impact on the group's financial statements[20] - The measurement basis for the consolidated financial statements is historical cost, except for financial instruments measured at fair value[23] - The audit committee has reviewed the accounting principles and practices used by the group, discussing matters related to auditing, internal controls, and financial reporting for the year ending December 31, 2024[116] - The auditors confirmed that the preliminary performance announcement figures are consistent with the draft consolidated financial statements for the year ending December 31, 2024[117]

Core Viewpoint - Brilliance China (01114) shares rose over 4% despite the company issuing a profit warning, which was still slightly better than the market's lowered expectations [1] Financial Performance - Brilliance China expects a 60% decrease in profit after tax for the fiscal year ending December 31, 2024, compared to the fiscal year ending December 31, 2023 [1] - The anticipated net profit for last year is approximately 3.1 billion RMB, which translates to an expected net profit of around 1.6 billion RMB for the second half of 2024 [1] Market Reaction - As of the report, Brilliance China's stock price increased by 4.06%, reaching 2.82 HKD, with a trading volume of 81.098 million HKD [1] Analyst Insights - Morgan Stanley noted that the profit warning from Brilliance China was still slightly better than the market's adjusted expectations [1] - The decline in profit is primarily attributed to the poor performance of the joint venture, Brilliance BMW, and a withholding tax of approximately 1.474 billion RMB on dividends paid by subsidiaries [1] Dividend Expectations - Based on implied profits and the company's dividend guidance, Morgan Stanley maintains its expectation for a regular dividend payout of 30 to 50 HKD cents per share for the fiscal year 2024 [1]

Core Viewpoint - The best investment opportunities in stocks often arise during periods of significant uncertainty, where the perceived risk is high but the actual risk may be lower than expected [1]. Case Study 1: NetEase - In 2001, NetEase's stock price fell from 15 to 1 due to market panic and a lawsuit, despite having cash reserves of 5.6 billion, which was twice its market value of 3 billion [2][3]. - Investor Duan Yongping saw four angles of opportunity: cash reserves, talent acquisition, potential in the gaming industry, and the extreme drop in stock price [4]. - The investment was characterized by a low downside risk and high upside potential, leading to a significant profit when the company turned around [5]. Case Study 2: Kweichow Moutai - From 1998 to 2003, Moutai's stock price fell significantly due to industry-wide issues, with market sentiment predicting a decline in demand for baijiu [6]. - Moutai's production was limited, and even if the overall industry declined, it could still maintain sales due to its premium positioning [7]. - The investment was seen as having limited downside risk and unlimited upside potential, resulting in a substantial increase in profits and market value over the following years [8]. Case Study 3: Great Wall Motors - In 2008, Great Wall Motors faced losses and market skepticism as it shifted focus to SUVs, a segment that was only 5% of the market at the time [10]. - The strategic pivot was based on the belief that SUVs would become a significant market segment, similar to trends seen in the U.S. [11]. - The investment was characterized by high potential returns, leading to a dramatic increase in profits and market capitalization in subsequent years [12]. Case Study 4: Li Ning - In 2015, Li Ning returned to a struggling company facing significant losses and stock price declines [13][14]. - The brand's strength and the cyclical nature of the apparel industry provided a foundation for potential recovery [15][16]. - The investment proved successful, with significant profit growth and market value increase over six years [17]. Case Study 5: Brilliance China Automotive - Brilliance's stock price fell over 90% from 2017 to 2022 due to market concerns about the automotive industry and its financial health [18]. - Despite the challenges, the company held a significant stake in BMW China and had substantial cash reserves, presenting a unique investment opportunity [19][20]. - The investment was characterized by limited downside risk and significant upside potential, resulting in a strong recovery in stock price [21]. Case Study 6: Xiaomi Group - In 2021, Xiaomi announced its entry into the automotive sector, leading to skepticism and a sharp decline in stock price [21][22]. - However, Xiaomi's advantages included a strong IoT platform and a capable leadership team, suggesting potential for future growth [23][24]. - The investment was viewed as having a high probability of success at a low price point, indicating significant upside potential [25]. Case Study 7: China Feihe - China Feihe's stock price fell significantly due to declining birth rates and market pessimism about the infant formula industry [25][26]. - The company maintained strong revenue and cash flow, with a solid market position and potential for growth in both domestic and international markets [27][28]. - The investment was characterized by limited downside risk and substantial upside potential, making it an attractive opportunity [29][30][31][32][33][34].

Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 518,038,000, an increase of 2.3% from RMB 507,855,000 in the same period of 2023[4] - Gross profit decreased to RMB 103,552,000, down 27.2% from RMB 142,315,000 year-over-year[4] - Profit attributable to equity holders of the company was RMB 1,473,258,000, a decline of 60.7% compared to RMB 3,744,137,000 in the previous year[4] - Basic and diluted earnings per share were RMB 0.29201, down from RMB 0.74211 in the same period last year[4] - Total comprehensive income for the period was RMB 1,196,013,000, a decrease of 74.7% from RMB 4,731,508,000 in the prior year[5] - The company reported a pre-tax profit of RMB 2,937,756,000 for the six months ended June 30, 2024[21] - The group reported a net profit of RMB 10,939,670,000 for the six months ended June 30, 2024, down from RMB 15,009,834,000 for the same period in 2023[39] - The unaudited profit before tax decreased by 27.0% to RMB 2,937,800,000 in the first half of 2024, down from RMB 4,022,600,000 in the same period of 2023[91] - The unaudited net profit attributable to equity holders was RMB 1,473,300,000 in the first half of 2024, compared to RMB 3,744,100,000 in the same period of 2023[91] Assets and Liabilities - Non-current assets totaled RMB 14,934,529,000, down from RMB 19,851,940,000 as of December 31, 2023[6] - Current assets decreased to RMB 33,693,772,000 from RMB 35,302,680,000 at the end of 2023[6] - Total liabilities increased to RMB 22,336,648,000, compared to RMB 3,178,664,000 in the previous period[6] - Total assets as of June 30, 2024, amounted to RMB 48,628,301,000, with total liabilities of RMB 22,432,734,000[23] - The total assets of the group amounted to RMB 64,976,792,000, a decrease from RMB 86,942,362,000 as of December 31, 2023[38] - The group’s total liabilities decreased to RMB 73,494,053,000 as of June 30, 2024, from RMB 77,041,032,000 as of December 31, 2023[38] Cash Flow and Investments - Net cash used in operating activities was RMB (675,034,000), compared to RMB (600,607,000) in the previous year[11] - Net cash generated from investing activities amounted to RMB 5,433,600,000, a significant increase from RMB 409,107,000 year-over-year[11] - Cash and cash equivalents were RMB 27,346,117,000, down from RMB 30,845,795,000[6] - The company has short-term bank deposits of RMB 463,690,000 as of June 30, 2024, down from RMB 2,324,385,000 as of December 31, 2023, reflecting a decrease of approximately 80%[46] - The group incurred capital expenditures of RMB 35.4 million in the first half of 2024, compared to RMB 24.5 million in the same period of 2023[97] Equity and Dividends - Total equity attributable to shareholders reached RMB 51,118,104,000, with retained earnings of RMB 47,718,864,000[10] - The company declared a special dividend of RMB 27,210,904,000 for the six months ended June 30, 2024, significantly higher than RMB 4,178,452,000 in the same period of 2023[31] - The company declared special dividends of HKD 1.5 and HKD 4.3 per share on April 15 and June 14, 2024, respectively[106] Operational Changes and Strategies - The company completed the acquisition of 100% equity of Brilliance Auto Group Holdings Limited, making it the largest shareholder with a 29.99% indirect stake[12] - The restructuring of Brilliance Renault has been completed, with the company regaining control and consolidating its financial statements[15] - The company is in the process of relocating its office and factory, expected to be largely completed within 2024[17] - The company plans to start production of the "Neue Klasse" models in 2026, with a significant investment in a new generation battery project[92] - The group is collaborating with BMW to supply components for BMW vehicles and is focusing on the BEV market with plans to launch new models in the coming years[98] Employee and Operational Costs - Employee costs, including director remuneration, increased to RMB 116,157,000 for the six months ended June 30, 2024, compared to RMB 112,832,000 in 2023, reflecting a rise of 2.9%[28] - Employee costs for the six months ended June 30, 2024, amounted to RMB 116,200,000, compared to RMB 112,800,000 for the same period in 2023[100] Credit and Receivables - The company has recognized expected credit loss provisions of RMB 44,048,000 against accounts receivable as of June 30, 2024, compared to RMB 42,240,000 as of December 31, 2023[49] - The group recognized expected credit loss provisions for accounts receivable from Shenyang Automotive and Huachen Power, amounting to RMB 858,000,000 and RMB 128,320,000 respectively, as of June 30, 2024[76][77] Market Performance - Revenue from the sale of automotive parts for the six months ended June 30, 2024, was RMB 405,380,000, an increase of 6.8% compared to RMB 381,079,000 for the same period in 2023[19] - The contribution from the joint venture, BMW Brilliance, decreased by 27.3% to RMB 2.7347 billion, down from RMB 3.7595 billion in the same period of 2023[88] - BMW Brilliance's domestic sales reached 312,730 vehicles in the first half of 2024, a 6.4% decrease from 334,076 vehicles sold in the same period of 2023[88] - In the first half of 2024, total vehicle sales decreased by 6.4% to 312,730 units compared to 334,076 units in the same period of 2023[89] - The number of BEV vehicles sold increased by 22.2% to 50,750 units from 41,547 units year-on-year[89] Governance and Compliance - The company has complied with all provisions of the Corporate Governance Code as of June 30, 2024[120] - The audit committee has reviewed the accounting principles and practices adopted by the group, discussing matters related to auditing, internal controls, and financial reporting[121] - The board consists of four independent non-executive directors, meeting the requirements of the listing rules[122]

Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 518,038,000, an increase from RMB 507,855,000 in the same period of 2023, representing a growth of approximately 2.3%[4] - Gross profit for the same period was RMB 103,552,000, down from RMB 142,315,000, indicating a decline of about 27.2%[4] - Net profit for the six months ended June 30, 2024, was RMB 1,465,637,000, compared to RMB 3,745,486,000 in 2023, reflecting a decrease of approximately 60.9%[5] - Basic earnings per share for the period was RMB 0.29201, down from RMB 0.74211 in the previous year, a decline of about 60.7%[5] - Total comprehensive income for the six months was RMB 1,196,013,000, compared to RMB 4,731,508,000 in 2023, a decrease of approximately 74.7%[7] - The company reported interest income of RMB 295,169,000, down from RMB 348,850,000, a decline of about 15.3%[4] - The company incurred selling expenses of RMB 12,463,000, a decrease from RMB 19,306,000, reflecting a reduction of approximately 35.4%[4] - Administrative expenses were RMB 176,593,000, down from RMB 201,533,000, indicating a decrease of about 12.4%[4] - The company’s share of results from associates was RMB 2,734,677,000, compared to RMB 3,759,457,000 in the previous year, a decline of approximately 27.2%[4] - The profit before tax for the six months ended June 30, 2024, was RMB 2,937,756,000, down from RMB 4,022,647,000 in the same period of 2023, representing a decline of approximately 27%[29] Assets and Liabilities - Non-current assets totaled RMB 19,851,940 thousand as of December 31, 2023, compared to RMB 14,934,529 thousand as of June 30, 2024, reflecting a significant increase[9] - Current assets amounted to RMB 35,302,680 thousand as of June 30, 2024, up from RMB 33,693,772 thousand as of December 31, 2023, indicating growth in liquidity[11] - Total liabilities reached RMB 22,336,648 thousand as of June 30, 2024, compared to RMB 3,178,664 thousand as of December 31, 2023, showing a substantial rise in obligations[11] - The company's net asset value was RMB 26,195,567 thousand as of June 30, 2024, compared to RMB 51,891,135 thousand as of December 31, 2023, indicating a decrease in equity[11] - Cash and cash equivalents were reported at RMB 27,346,117 thousand as of June 30, 2024, compared to RMB 30,845,795 thousand as of December 31, 2023, reflecting a decline in cash reserves[9] - The total value of non-current liabilities was RMB 96,086 thousand as of June 30, 2024, compared to RMB 84,821 thousand as of December 31, 2023, indicating an increase in long-term obligations[11] - The company’s total assets minus current liabilities stood at RMB 26,291,653 thousand as of June 30, 2024, compared to RMB 51,975,956 thousand as of December 31, 2023, showing a decline in net asset position[11] - The company’s equity attributable to shareholders was RMB 25,110,834 thousand as of June 30, 2024, down from RMB 51,118,104 thousand as of December 31, 2023, indicating a reduction in shareholder equity[11] Investments and Acquisitions - The company acquired 100% equity of Huachen Automotive Group Holdings Company Limited, enhancing its market position[13] - The group has invested approximately RMB 1,336,912,000 in the restructuring of Brilliance Renault, which is below the board-approved investment cap of RMB 1,360,000,000[20] - As of December 31, 2023, the group has recognized an investment prepayment of approximately RMB 282,557,000 related to Brilliance Renault's restructuring[20] - The restructuring of Brilliance Renault is expected to be completed by June 30, 2024, allowing the group to regain control with an effective ownership of 80.72%[20] - The group has ceased consolidating Brilliance Renault's financials after losing control due to the restructuring process initiated by the Shenyang Intermediate People's Court[19] Market Performance - For the six months ended June 30, 2024, the group reported sales of automotive parts amounting to RMB 405,380,000, an increase from RMB 381,079,000 in the same period of 2023, representing a growth of approximately 6.4%[23] - Interest and service fee income from automotive financial services for the same period was RMB 112,658,000, down from RMB 126,776,000 in 2023, indicating a decrease of about 11.1%[23] - The segment performance for non-BMW vehicles and automotive parts showed a loss of RMB 31,995,000 for the first half of 2024, compared to a loss of RMB 5,180,000 in the same period of 2023, indicating a significant decline in performance[27] - The domestic sales of Brilliance BMW reached 312,730 vehicles in the first half of 2024, a decrease of 6.4% from 334,076 vehicles sold in the same period of 2023[50] - Brilliance BMW's total sales decreased by 6.8% in the first half of 2024, with domestic sales at 312,730 units and exports at 13,967 units[55] Research and Development - Research and development costs for the first half of 2024 were RMB 16,579,000, significantly higher than RMB 5,356,000 in the same period of 2023, indicating an increase of approximately 209%[29] - The group is focusing on expanding its aluminum lightweight industry chain and has applied for several innovative patents[58] Cash Flow and Dividends - The company declared a special dividend of RMB 7,013,177,000 for the first special dividend and RMB 20,197,727,000 for the second special dividend, totaling RMB 27,210,904,000, compared to RMB 4,178,452,000 for the same period in 2023[35] - The company declared a special dividend of HKD 1.5 per share on April 15, 2024, and HKD 4.3 per share on June 14, 2024, with payments made on May 17, 2024, and July 25, 2024, respectively[89] - As of June 30, 2024, the total amount of restricted short-term bank deposits was RMB 630,868,000, down from RMB 2,500,975,000 as of December 31, 2023[37] Employee and Training - As of June 30, 2024, the employee cost was RMB 116.2 million, an increase from RMB 112.8 million for the same period in 2023, with approximately 1,400 employees[78] - Huachen Dongya Automobile Finance has developed its own online training platform to improve employee training efficiency and reduce attendance requirements for sales and training teams[79] - The company has implemented a set of training systems and workflows, including onboarding training and specialized position training, to enhance overall employee skill levels[79] Corporate Governance - The company has maintained compliance with corporate governance codes as of June 30, 2024[95] - The audit committee has reviewed the accounting principles and practices used by the company for the six months ending June 30, 2024[96] - The board of directors consists of four executive directors and four independent non-executive directors as of the announcement date[97]

Financial Performance - For the year ended December 31, 2023, the total revenue was RMB 1,121,454,000, a slight decrease of 0.2% compared to RMB 1,130,725,000 in 2022[7]. - The net profit for the year was RMB 7,736,451,000, representing an increase of 8.2% from RMB 7,146,830,000 in the previous year[7]. - The basic earnings per share increased to RMB 1.53312, up from RMB 1.41655 in 2022, reflecting a growth of 8.2%[7]. - The group's total revenue for the year ended December 31, 2023, was RMB 1,121,500,000, a slight decrease of 0.8% compared to RMB 1,130,700,000 for the year ended December 31, 2022[29]. - The company's profit before tax increased by 15.7% from RMB 7.14 billion in 2022 to RMB 8.26 billion in 2023[34]. - Net profit attributable to equity holders increased by 8.2% from RMB 7.15 billion in 2022 to RMB 7.74 billion in 2023, with basic earnings per share rising from RMB 1.41655 to RMB 1.53312[34]. - Interest income increased by 61.0% from RMB 416,300,000 in 2022 to RMB 670,200,000 in 2023, attributed to dividend income from Huachen BMW[30]. - The gross profit margin improved from 20.8% in 2022 to 25.7% in 2023, primarily due to a decrease in the market price of aluminum[30]. Production and Sales - In 2023, the total production of BMW vehicles by Brilliance BMW reached approximately 728,000 units, marking a significant achievement for the company[11]. - Domestic sales of BMW vehicles reached 709,954 units in 2023, a 6.8% increase from 664,934 units in 2022, with BEV sales growing by 110.6%[33]. - The sales volume of new energy vehicles (NEVs) in China surged by 37.9% to 9,500,000 units in 2023, indicating strong market demand[10]. - The company plans to launch the new generation BMW 5 Series and the first BMW i5 in China in early 2024, indicating ongoing product development[11]. Assets and Liabilities - The total assets of the company as of December 31, 2023, included non-current assets of RMB 19,851,940,000 and current assets of RMB 35,302,680,000[7]. - As of December 31, 2023, total assets amounted to RMB 55,154,600,000, a slight decrease from RMB 55,426,600,000 on December 31, 2022[97]. - The company had short-term bank borrowings of RMB 924,500,000 as of December 31, 2023, compared to RMB 350,000,000 as of December 31, 2022[95]. - The company reported accounts payable of RMB 219,300,000 as of December 31, 2023, compared to RMB 170,100,000 as of December 31, 2022[95]. Corporate Governance - The company emphasizes maintaining high corporate governance standards to enhance shareholder value and protect shareholder rights, adhering to the Corporate Governance Code effective from December 31, 2023[136]. - The board consists of eight directors, including four executive directors and four independent non-executive directors, meeting the minimum requirements set by listing rules[141]. - The independent non-executive directors account for 50% of the board, ensuring strong independence and diverse perspectives[141]. - The company has adopted a whistleblowing policy and an anti-corruption policy as of December 30, 2022, and October 25, 2023, respectively[139]. Environmental and Social Responsibility - The company maintained its ESG reporting scope in 2023, with slight decreases in Scope 1 and Scope 2 GHG emissions, while Scope 3 emissions increased due to post-COVID-19 recovery[42]. - Approximately 95% of GHG emissions originated from electricity consumption during production operations, with the remainder from vehicle usage in daily operations[43]. - The company announced that Ningbo Yumin was recognized as a three-star green factory, utilizing all generated electricity through a distributed photovoltaic power station installed in collaboration with a local new energy technology company[44]. - The company has implemented comprehensive measures for hazardous waste management, ensuring proper classification, collection, recycling, and disposal[43]. Strategic Initiatives - The company plans to continue focusing on its core business of manufacturing and selling BMW vehicles and automotive components, as well as providing automotive financial services[37]. - The group is actively exploring investment opportunities in NEV manufacturing and component supply, aiming to enhance profitability and shareholder value[101]. - The group plans to develop new electric vehicle products, including the "Sea Lion" and "Sea Lion King" series, to align with the growing NEV market[102]. - The company has established strategic partnerships with Tesla and other NEV manufacturers, focusing on retail finance and lightweight aluminum products[45]. Employee and Management - The company employed approximately 1,200 employees as of December 31, 2023, down from approximately 1,300 employees as of December 31, 2022, with employee costs for the year amounting to RMB 238,100,000, a decrease from RMB 341,700,000 in the previous year[104]. - The company has developed its own online training platform to enhance employee training and reduce travel needs for sales and training teams[105]. - The company has established a succession plan to ensure a solid talent foundation for long-term development[105]. Financial Services - The automotive financial services generated revenue of RMB 279,200,000 for the year ended December 31, 2023, representing a 10.5% increase from RMB 252,800,000 in 2022, accounting for 25% of total revenue[112]. - Huachen Dongya Automotive Finance has implemented a comprehensive risk control mechanism focusing on risk identification, analysis, and continuous monitoring[117]. - The non-performing loan rate is a critical benchmark for assessing asset quality, with rising rates potentially impacting external funding capabilities[119]. Related Party Transactions - The group entered into several related party transactions in 2023, which are classified as continuing connected transactions under the listing rules[79]. - The group has ongoing related party transactions with Brilliance, which include sales of vehicles and components, and purchases of materials and services, approved by independent shareholders[80][82]. Dividends and Shareholder Information - The board declared two special dividends of HKD 0.96 per share from the proceeds of selling a 25% stake in Huachen BMW[14]. - The company declared a special dividend of HKD 0.96 per share on January 13, 2023, and July 18, 2023, with payments made on February 27, 2023, and August 31, 2023[49]. - No dividends will be proposed for the fiscal year ending December 31, 2023, consistent with the previous year[49].

Core Insights - BRILLIANCE CHI (01114) reported annual results for the year ending December 31, 2023, with revenue of 1.121 billion RMB, a year-on-year decrease of 0.82% [1] - The company's net profit attributable to shareholders was 7.735 billion RMB, reflecting an increase of 8.23% year-on-year [1] - Basic earnings per share stood at 1.53312 RMB [1] Revenue Analysis - The decline in revenue was primarily attributed to a continuous drop in demand for automotive parts related to traditional fossil fuel vehicles [1] - This decline was offset by a rising demand from manufacturers of electric and hybrid vehicles [1] Financial Services Contribution - The automotive finance market showed strong demand, leading to increased revenue contributions from Huachen Dongya Automotive Finance in the second half of 2023 [1]

Financial Performance - Total revenue for the year ended December 31, 2023, was RMB 1,121,454,000, a slight decrease of 0.24% from RMB 1,130,725,000 in 2022[3] - Gross profit increased to RMB 288,479,000, up 22.36% from RMB 235,572,000 in the previous year[3] - Interest income rose significantly to RMB 670,174,000, compared to RMB 416,323,000 in 2022, marking an increase of 60.73%[3] - Net profit for the year was RMB 7,736,451,000, representing an increase of 8.23% from RMB 7,146,830,000 in 2022[4] - Basic and diluted earnings per share increased to RMB 1.53312, up from RMB 1.41655 in the previous year, reflecting a growth of 8.25%[4] - Total comprehensive income for the year was RMB 8,296,150,000, slightly down from RMB 8,412,138,000 in 2022[6] Assets and Liabilities - Non-current assets decreased to RMB 19,851,940,000 from RMB 21,698,019,000, a decline of 8.49%[8] - Cash and cash equivalents increased to RMB 30,845,795,000, up from RMB 28,463,276,000, an increase of 8.43%[8] - Total liabilities decreased to RMB 3,178,664,000 from RMB 3,114,199,000, a reduction of 2.06%[9] - Total equity attributable to equity holders of the company was RMB 51,118,104,000, down from RMB 51,445,254,000, a decrease of 0.64%[9] Accounting Policies and Standards - The consolidated financial statements were prepared in accordance with the Hong Kong Financial Reporting Standards and the relevant accounting policies remain consistent with those adopted in the previous year[12] - The adoption of new and revised Hong Kong Financial Reporting Standards did not have a significant impact on the group's consolidated financial statements, except for the changes in accounting policy disclosures[15] - The group has adopted HKAS 1 (Revised) which changes the terminology from "major accounting policies" to "significant accounting policy information"[16] - The group has also adopted HKAS 8 (Revised), which defines accounting estimates as monetary amounts in financial statements affected by measurement uncertainty[16] - The measurement basis for preparing the consolidated financial statements is historical cost, except for financial instruments measured at fair value[22] Revenue Sources - Sales of automotive parts amounted to RMB 842,240,000 in 2023, down 4.1% from RMB 877,945,000 in 2022[26] - Interest and service fee income from automotive financial services increased to RMB 279,214,000 in 2023, up 10.5% from RMB 252,780,000 in 2022[26] - The largest customer contributed approximately RMB 156,535,000, accounting for 14% of total revenue in 2023, compared to 22% in 2022[26] - The company reported a total capital expenditure of RMB 33,872 thousand for self-owned assets in 2022[37] Market Performance - Sales in China decreased to RMB 714,091,000 in 2023, down 9.2% from RMB 777,845,000 in 2022[27] - Sales in Europe increased to RMB 72,548,000 in 2023, up 31.1% from RMB 55,385,000 in 2022[27] - Domestic sales of BMW vehicles reached 709,954 units in 2023, a 6.8% increase from 664,934 units in 2022, with BEV sales growing by 110.6% to 95,550 units[71] Research and Development - Research and development costs increased to RMB 31,590 thousand in 2023 from RMB 19,078 thousand in 2022[39] - The company has completed sample trials for a camshaft design improvement project in collaboration with Shanghai Jiao Tong University, aiming to enhance diesel engine combustion efficiency[86] Strategic Initiatives - The company plans to continue exploring strategic investment projects within the automotive industry value chain for sustainable business growth[63] - The company aims to enhance profitability and shareholder value by exploring various investment opportunities, including collaboration with BMW for automotive parts supply and potential expansion into NEV manufacturing[82] - Brilliance Renault expects to develop electric products under the Jinbei brand, targeting the growing NEV market and aiming to create a well-known brand in LCVs[83] Corporate Governance - The company has adopted the standard code for securities trading by directors and confirmed compliance for the year ended December 31, 2023[105] - The company has maintained compliance with the corporate governance code throughout the fiscal year ending December 31, 2023[106] - The audit committee has reviewed the accounting principles and practices adopted by the group for the year ending December 31, 2023[108] Dividends and Shareholder Returns - The company declared a special dividend of HKD 0.96 per share, totaling approximately RMB 4,443,390,000, with no dividends declared for the previous year[54] - The company declared special dividends of HKD 0.96 per share on January 13, 2023, and July 18, 2023, with payments made on February 27, 2023, and August 31, 2023[96]

Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 507,855,000, a decrease of 8.9% compared to RMB 557,527,000 for the same period in 2022[4] - Gross profit increased to RMB 142,315,000, up 42.7% from RMB 99,605,000 year-on-year[4] - Net profit for the period was RMB 3,745,486,000, representing a 17.7% increase from RMB 3,180,488,000 in the previous year[6] - Basic and diluted earnings per share rose to RMB 0.74211, compared to RMB 0.63039 for the same period last year, marking a 17.7% increase[4] - Total comprehensive income for the period was RMB 4,731,508,000, up 48.8% from RMB 3,172,097,000 in 2022[6] - The company reported a profit attributable to shareholders of RMB 3,744,137 thousand for the first half of 2023, compared to RMB 3,180,360 thousand in the same period of 2022, marking an increase of approximately 18%[13] - The company reported a pre-tax profit of RMB 4,022,647,000 for the six months ended June 30, 2023, compared to RMB 3,176,676,000 for the same period in 2022, reflecting a growth of 26.6%[28] - The group’s unaudited profit before income tax increased by 26.6% from RMB 3,176,700,000 in the first half of 2022 to RMB 4,022,600,000 in the same period of 2023[96] Assets and Liabilities - Non-current assets totaled RMB 27,061,020,000 as of June 30, 2023, compared to RMB 21,698,019,000 at the end of 2022, reflecting a significant increase[8] - Current assets decreased to RMB 29,445,521,000 from RMB 33,728,585,000 at the end of 2022, indicating a reduction in liquidity[9] - Total liabilities increased to RMB 3,644,841,000 from RMB 3,114,199,000, suggesting a rise in financial obligations[9] - The company’s total assets increased to RMB 52,216,827 thousand as of June 30, 2023, compared to RMB 46,976,786 thousand as of June 30, 2022, indicating a growth of around 11%[13] - The total liabilities as of June 30, 2023, were RMB 3,736,658,000, an increase from RMB 3,209,777,000 as of December 31, 2022, representing a rise of 16.4%[30] - The company’s equity attributable to shareholders rose to RMB 51,996,961,000 from RMB 51,445,254,000, indicating a growth in shareholder value[9] Cash Flow - The net cash used in operating activities for the first half of 2023 was RMB (600,607) thousand, compared to RMB 850,172 thousand in the same period of 2022, indicating a significant decline in cash flow from operations[16] - The net cash generated from investing activities in the first half of 2023 was RMB 409,107 thousand, a substantial decrease from RMB 17,252,758 thousand in the first half of 2022[16] - The net cash used in financing activities for the first half of 2023 was RMB (3,650,177) thousand, compared to RMB (1,212,075) thousand in the same period of 2022, reflecting increased financing outflows[16] - The cash and cash equivalents decreased to RMB 24,621,599 thousand as of June 30, 2023, from RMB 28,463,276 thousand at the beginning of the year[16] Business Segments - The company identified three main business segments: manufacturing and sales of automotive parts, manufacturing and sales of BMW vehicles and parts, and providing automotive financial services[27] - The company began supplying automotive parts to electric vehicle manufacturers in the first half of 2023 to offset declines in sales to traditional automakers[88] Shareholder Information - The company declared a special dividend of HKD 0.96 per share on January 13, 2023, totaling HKD 4,843,458,000, and another special dividend of HKD 0.96 per share on July 18, 2023, also totaling HKD 4,843,458,000[41] - Major shareholders include Huachen with 1,535,074,988 shares (30.43%), and Liaoning Transportation Investment Group with 600,000,000 shares (11.89%)[130] - The company’s directors and senior management hold a total of 6,200,000 shares, representing 0.12% of the issued share capital[131] Restructuring and Investments - The company has entered into a restructuring investment agreement with Brilliance Renault, proposing to inject RMB 1.36 billion in cash, which would result in the company holding 80.98% of Brilliance Renault's equity after the restructuring[32] - The restructuring of Brilliance Renault includes a proposed capital injection of up to RMB 1.36 billion to support its debt restructuring, with the plan approved by the Shenyang Intermediate People's Court[101] Market Trends and Strategies - The company plans to leverage the growing NEV market, supported by new government measures aimed at promoting automotive consumption and enhancing NEV infrastructure[97] - The new fully electric BMW i3 40L model was launched on February 20, 2023, marking a significant milestone in the company's commitment to electrification and digitalization[98] - The company is implementing the iFactory production strategy, utilizing data science, AI, and virtual technologies to enhance production efficiency and sustainability[98] Legal Matters - Brilliance China Automotive Holdings Limited is involved in multiple legal cases with China Everbright Bank, including a total of RMB 1.818 billion, RMB 30 million, RMB 156 million, RMB 208 million, and RMB 490 million in litigation judgments[152] - Harbin Bank has applied for a retrial regarding a RMB 300 million lawsuit and requested enforcement of the judgment from the Liaoning Provincial High Court[152]