Revenue in the first quarter of fiscal 2019 was worse than expected. Revenue fell 16.8% year-on-year and 16.2% year-on-year at a fixed exchange rate, accounting for only 23.9% of our full-year forecast and worse than market expectations. Revenue from all brands and all channels recorded a significant decline, mainly due to: 1) the continued decline in passenger traffic; 2) the prolonged warm summer temperatures in Europe, which affected the company's autumn sales; and 3) the impact of withdrawing operations from Australia and New Zealand.

We forecast a loss per share of HK $0.668, HK $0.546 and HK $0.493 for fiscal year 2019-2021, respectively. The worse-than-expected revenue for the first quarter of fiscal 2019 reflects continued pressure from all sources, which deepens our concerns about the company's reform measures. We cut our revenue forecasts for fiscal year 2019-2021 by 1.8%, 2.4% and 3.4% respectively, based on a more conservative point of view.

Maintain the target price of HK $2.00 and a "neutral" rating. The current state of the company's business is still being challenged and worse than we had predicted. According to the announcement, the company is currently taking some "corrective actions". These include: 1) a more customer-centric strategy; 2) optimize newly launched products; 3) simplify the company's workflow and improve accountability; 4) become a more streamlined organization; 5) phase out loss-making businesses. Although we believe that the company's new reform measures are going in the right direction, we still tend to be cautious about the actual effects of these measures at this stage.