Brilliance loss hits stock price

SHARES in Brilliance China Automotive Holdings Ltd, the Chinese partner of Bayerische Motoren Werke AG, yesterday fell the most in almost three years after posting a wider first-half loss.

The auto maker fell nine percent to HK$1.93 (25 US cents) in Hong Kong, its biggest drop since November 2004, Bloomberg News reported.

The loss widened after a financial write-off related to convertible bonds eroded gains from higher vehicle sales.

Brilliance shares have gained 46 percent this year because of higher sales of both BMW cars and its own-brand Zhonghua sedans. Sales of Zhonghuas more than tripled in the first half as Brilliance won market share from General Motor Corp's Buick Excelle.

"The company's earnings will improve next year, mainly driven by sales of Zhonghua sedans," said Alex Fan, a Hong Kong-based analyst at Daiwa Institute of Research. "However, this has already been factored into the share price."

Brilliance expects to beat its full-year sales target of 200,000 vehicles, it said in June. It sold 60,287 Zhonghua sedans in the first half. Its venture with BMW almost doubled sales of BMW 5-Series sedans to 9,334.