Citi Research lowered its target price for Sa Sa International (01128) to HK$7.3 from HK$9, and maintained its "buy" call.
The research house said Sa Sa's weak holiday sales (1-3 May) were largely in-line with expectation given the diversion of Chinese tourist traffic.
Citi expect SaSa's HK SSSG to normalize to 8% in FY2015 given the higher base (SSSG in FY2014: +13%) and lower ticket size by Chinese tourists. It believes SaSa should still deliver above-industry earnings growth with a 3-year CAGR of 19%, GM should continue to improve on increasing contribution of in-house brands, and SaSa should maintain its attractive dividend yield (~4%).
The house cut its FY2014-16 forecast by 5-8%.
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