On June 28th, Morgan Stanley released a report stating that the impact of Sam's Club on Hong Kong retail is controllable, and it is expected to capture less than 1% of Hong Kong's total retail sales. However, the bank is cautious about Hong Kong's retail performance and expects a 6% year-on-year decline in sales (excluding dining) for the whole year. Morgan Stanley believes that Sam's Club's impact on the Hong Kong retail market is controllable because of its limited product supply, such as the inability to deliver snacks and drinks to Hong Kong, and many price-sensitive consumers who have already purchased goods on cross-border platforms such as Taobao and PDD Holdings. In addition, although the unit price of Sam's Club's products is low, most of them require a large volume purchase, and Hong Kong consumers may need to share the purchase with others due to limited living space, which hinders them from repeat purchasing Sam's Club's products. Although Morgan Stanley believes that the threat from Sam's Club is not significant, it points out that Hong Kong's retail still faces four major unfavorable factors, including an increase in the number of Hong Kong residents traveling abroad, further penetration of online shops in the market, lower-than-expected tourist consumption, and exchange rate factors. Sales of non-essential goods are expected to decline by 9% year-on-year and sales of essential goods are expected to decline by 2%. The bank reiterated its bullish view on Link Real Estate Investment Trust and adopted a cautious attitude towards Wharf REIC.