4 biggest reasons why Sa Sa is poised for growth

23% sales growth in 2014 has been penciled in.

According to Barclays, Sa Sa's core Hong Kong (HK) segment will drive growth: 1QFY14 so far has seen acceleration in HK sales growth to +28% y/y. 

Here's more:

While there could be some low base effect, we still expect FY14 to see 23% y/y sales growth on continued visitor arrival growth and local spending. We believe gross margin improvement will continue to help offset cost pressure; we therefore expect 20% group earnings growth this year.

We expect Sa Sa to continue to see strong growth next few years as we believe 1) Sa Sa is well positioned to capture the spending of the increased arriving visitors to HK. We believe growth should remain strong with the opening of the Kai Tak Cruise terminal this year, and the High Speed Rail in 2015.

2) Sales growth is resilient even in times of poorer consumer sentiment. 3) Sa Sa benefits from trend where cosmetics and skincare are increasingly becoming daily use necessities; and Sa Sa is also expanding its reach to areas such as edible supplements and beauty equipment.

4) Growing its house brands with higher margins can help Sa Sa counter rising rental and staff cost pressures.