Slow growth ails Sa Sa's Hong Kong and Macau segment

Trend expected to continue into FY15E.

Slow growth has been observed with regard to Sa Sa International's Hong Kong and Macau segment from April 1 to June 21, with SSS growth at 1.5 percent while retail sales were only +5.4 percent y/y.

According to a research reported by Barclays, it was noted that more arrivals from lower-tier cities has led to lower ASP per transaction.

The report also noted that this trend is expected to last through 1HFY15.

Here's more from Barclays:

Along with promotions done since 3QFY14, the company expects gross margins to remain under pressure.

Management noted that store rentals at prime locations continue to increase but stores at more second-tier locations have shown softening rentals.

In 1-Apr to 21-Jun, 20 stores’ new rental renewals negotiated still saw a 24.7% incremental rise, on average.