According to the report released by Futubull, Sa Sa Int'l (00178) was downgraded from "buy" to "hold" due to the overall ROI having less than 15% upside potential. The target price was lowered from HKD 2 to HKD 0.92. The net income of the second half of fiscal year 2024 was 44% lower than the bank and market expectations. Sales for the first quarter from April 1st to June 16th this year fell by 9.5%, with Hong Kong, Macau and Taiwan region sales dropping by 21.8%. The bank also lowered the sales forecast for fiscal year 2025 and 2026 by 21% and 24%, respectively. It is expected that the dividend payout ratio for fiscal years 2025 to 2027 will be 70%.

The bank pointed out that the management of Sa Sa Int'l believes that the consumption situation in the north has roughly stabilized and has become a new normal, while the travel and visit to Hong Kong depends very much on government policies. The management and the industry are striving to increase the duty-free limit to RMB 30,000 for tourists and allowing residents in the Greater Bay Area to make multiple trips with a single visa. The management also stated that rents need to be reduced by 20% to 25% for the retail industry and brands to survive. The group will continue to implement market diversification, focusing on online sales in mainland China; Southeast Asia is also a potential growth area, with more new stores expected in the future, but their recent contribution to profits is still low.