SaSa's Hong Kong and Macau retail sales soared 30%

Will it continue its momentum?

According to Maybank Kim Eng, SaSa last night said its HK & Macau retail sales was up by 30% YoY during Chinese New Year Holiday (10-16 Feb 2013 vs 23 to 29 Jan 2012) on the back of SSSG of 20%. As of 4QFY3/13 YTD, its sales have also been up by 30% YoY with SSSG of 20%. 

Here's more:

Implication: We view the CNY sales to be respectable, thanks to the influx of mainland tourists, as the number of PRC visitors rose 27% YoY, according to Tourism Board. We believe this inspiring update should reassure our previous view that SaSa should see a strong sales recovery in 4QFY3/13 following a much softer-than-expected December sales due to unfavourable weather and CNY calendar year shift .

Looking ahead, we do expect SaSa’s resilient sales trend to sustain given its one-stop beauty solutions to be popular among mainland daytrippers. 

Action: Expect share price strength. Overall, the 4QFY3/13YTD sales figures came slightly ahead of our expectation, which we estimate to see a mild upside risk to our FY3/13F estimates. We maintain our forecast and Street-high TP of HKD7.81 intact, which is equivalent to 21.2X FY3/14F PER or 1 S.D. above its historical forward PER average.

We suggest investors to take profit on share price strength, as current share price is approaching our TP.