[ET Net News Agency, 24 October 2017] HSBC Global Research cut its target price for Sa
Sa International Holdings (00178) to HK$3 from HK$3.3, and maintained its "hold" rating.
The research house said Sa Sa's same-store-sales growth (SSSG) remained in the negative
territory at -2% in 2Q FY2018 (3 months to September 2017), but was offset by around 3%
more stores. The bright spot was continued improvement in the average ticket price at +4%,
which was positive to gross margin improvement.
HSBC believes the sharp slowdown in e-commerce was primarily a reflection of the
company's initiatives to improve profitability as it carried out price adjustments and
increased the threshold for free shipping.
On the back of the weak sales trend, HSBC trimmed its earnings forecasts by 7-8% on 2-4%
lower revenue and operation deleveraging for FY2018-20. (KL)