Citigroup's report stated that Sa Sa (00178.HK) recorded a first-half net profit of 32 million yuan, lower than the bank's expectations and the lower limit of profit warning. The significant decline in net profit was due to weak macroeconomic environment and consumer sentiment leading to a 10% year-on-year decline in sales, as well as growth in online sales from Mainland to-B dragging down the gross margin.

The bank mentioned that Sa Sa's dividend payout ratio remained stable at 72%, expecting it to stay stable in the future. The bank revised down profit forecasts for the fiscal years 2025 to 2027 by 50% to 53% to reflect weaker sales and profit assumptions. The target price was lowered from 1.49 yuan to 1.18 yuan, maintaining a 'buy' rating due to the low valuation demand.