Brilliance (1114.HK): 3Q BMW-JV Margin YoY Decline within Control; Lowering TP to HK$1.94

Mixed BMW 3Q26 results: 3Q26 BBA (Brilliance BMW) JV sales declined -30% YoY with continuing dealership incentive supports and likely higher depreciation expense on increased Capex. We estimate BBA 3Q26 pre-tax profit margin at +7.3% (-1.8ppt YoY/+3.3ppt QoQ) per HK-GAAP (excl. Purchase Power Allocation charges of EUR300mn), with 3Q26 NP likely to fall -46% YoY (slightly improved from 1H26's -53% YoY). We expect this was in-line with consensus given the cost-saving strategy mitigating 3Q26's roughly ~30% YoY JV revenue decline. Entering 4Q26, we expect the operational environment to remain challenging; we now lower FY26/27/28E NP forecasts by 5-9% to Rmb1,307/1,040/1,055mn and lower TP from HK$2.55 to HK$1.94, maintaining Neutral/High Risk. The stock is trading at 12% dividend yield.