According to a report released by HSBC, the loss of 00178.HK in the first half of the fiscal year has narrowed to $182 million, excluding one-time items, and the core loss has also narrowed to $191 million. In terms of classification, online business is the only profitable item, upgrading its rating from "sell" to "hold". It is expected that the company will still record a loss of $225 million in fiscal year 2022, including the forecast for 2023-24, and the target price will rise from $1 to $1.80.

The report points out that with the company continuing to cut costs, it is expected that the Hong Kong and Macao business will achieve a cash flow balance with a monthly income of 234 million yuan, with a gross profit margin of 40%, and the COVID-19 epidemic is the biggest factor affecting the company. It is also believed that even if China and Hong Kong fail to clear customs in the second half of the fiscal year, there will still be individual months.

The bank also said that with 268 million yuan in cash and a standby credit line of more than 200 million yuan, coupled with improved cash flow, it is believed that the company can survive a poor environment, but its long-term goal is to increase the proportion of business outside Hong Kong and Macao to more than 50%. However, mainland and online business is not an easy task.