Hong Kong Sa Sa netted 67.8 million net profit for the first half of the year

In view of the upward pressure on rents and the worsening of the Disney effect, the number of open cities under the “free travel” policy has not significantly increased. These three uncertainties have served as a wake-up call for the retail industry in Hong Kong. Sa Sa International (0178), a large-scale retail and beauty service provider, announced yesterday that the net profit for the first half of the year fell by 4.7% compared to the same period of last year, making approximately RMB 67.8 million, and the earnings per share was 5.1 sen. The interim dividend for special dividends totaled 6 Hong Kong cents.

Six months net profit 67.8 million

Asked if the increase in rent has affected the plan to open branches in Hong Kong, Sasha International Chairman and Chief Executive Guo Shaoming pointed out that current rents accounted for 9.8% of turnover, up 2.8% from the same period of last year, and the average rent increase was 10.6%. The Group exerted considerable pressure, and the Disney effect was not expected to be ideal. However, due to the fact that the Group has 52 branches in Hong Kong, laying a good foundation for its bargaining power with the owners, even if some of the branches are significantly increased in rent. If you do not renew your lease, there will be little impact on the group. He also pointed out that there are three renewed stores in the second half of the year, and the opening of stores and the renewal of rents will depend on the rent of the stores and their profit ratio. If the rent far exceeds the balance of profits, the Group will not renew the lease. In the Macau business, a shop was closed due to the high rent increase.

Continue to close your rented store

In addition, he pointed out that due to the disappointment of the Disney effect, coupled with the gradual liberalization of the Mainland cities, the number of one-time visitors to Hong Kong has decreased, and the increase in business volume has not offset the cost increase. However, it is believed that the Disney effect is less predictable. This will cause downward pressure on the future of Hong Kong's rent and it is confident that rents will remain below 10% of turnover. However, he said that there is no intention to transfer the cost to consumers through the increase in price, which will increase the turnover to offset the rental cost. At the same time, he said that he is confident of maintaining the 100% payout ratio.

He also pointed out that with the Mainland government gradually opening up free-market cities in the future, together with the completion of several major casinos in Macau in the second half of next year, it is estimated that it will help retail markets in Hong Kong and Macau. It is expected that sales during Christmas will increase by 10% year-on-year. He hopes that the free policy of the Mainland will increase the number of cities open to increase more one-time arrivals and increase the number of repeat visitors.

Mainland business losses 6,000,000 <br> <br> mainland business, he pointed out that due to the still developing, recorded a loss of 6 million yuan during the period, but I believe in the Mainland to open the fifth and sixth branches can achieve the balance of payments balance. At present, there are two shops in the Mainland. It is expected that by March next year, there will be two more new shops in Shanghai. The target number of shops will be increased to 100 within five years. Apart from Shanghai, it will also consider opening new stores in Other mainland cities such as Beijing and Chengdu.

He also pointed out that to cope with the expansion of the business, the Group spent about 20 million for the expansion of computer systems, so the company’s capital expenditure in the first half of the year was higher at about 55 million yuan, and it is expected to reach 90 million yuan in the second half of the year.