Here's what to blame for SaSa's disappointing sales growth

It reported only 11% sales growth.

According to Maybank Kim Eng, number of local retailers disclosed their retail sales performance during Golden Week yesterday. Of note, SaSa reported a total sales growth of 11% YoY and SSSG of 6%. Bonjour (653 HK, NR) reported a total sales growth of 6% on back of a 10% SSSG. Stelux (84 HK, NR) said its sales was up by 15.7% YoY (optical+11.3%, city chain+15.3%).

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Implication: Management admitted the performance was below their expectation. However, they believe it is because of the effect of the Individual Visit Scheme to mainland tourist arrivals evening out between the peak periods and normal periods.

Also, management believe there are more destination options for the PRC visitors given other countries have continuously upgraded their tourism facilities. We currently dislike the counter’s unattractive risk-reward profile while decelerating SSSG into 2H13 should be a near term catalyst.