Glonghui November 20 | Motong published a report stating that Sa Sa's mid-term net profit as of the end of September this year was HK$102 million, which is the lower limit of the profit forecast range of HK$100 million to HK$115 million. The bank estimates that the improved performance may be due to a recovery in visitors from Hong Kong and Macau; as the exclusive brand sales portfolio increased to 34%, the company's gross margin expanded by 410 basis points to 41% year over year (long-term target is 50%); and control expenses have improved, with rent and staff costs accounting for about 11% of sales. The bank believes that although Salsa's sales growth in the third quarter of fiscal year 2024 appears to have slowed from year to year, the company's management is committed to strengthening its product portfolio to promote continued expansion of gross margin, which it believes will support a recovery in profits and help resume dividend distribution. The bank expects Salsa's sales in the second half of fiscal year 2024 to increase by 29% year on year, and the operating profit margin to continue to rise to 8.5%. However, due to tax effects, it is estimated that the company's profit during the period will decline slightly, while Hainan and other countries attract mainland tourists to spend, and related competition is also risky. The bank maintained a “neutral” rating for salsa, believing that the stock lacked catalysts recently, and the target price was lowered from HK$1.25 to HK$1.1.