Sasa has eclipsed 36.53 million in the medium term

The demonstrations in Hong Kong have intensified and the local retail stocks have been hit hard by the sharp drop in the number of visitors to Hong Kong!

Salsa International (00178) ended the end of September this year, the interim results turned into losses, a half-year loss of 36.53 million yuan, a year-on-year profit of 203 million yuan, the period of turnover of 3.494 billion yuan, down 15.7% year-on-year; no interim dividend. The stock closed down 3.74% yesterday at 1.8 yuan.

Sasha’s business has been hit by demonstrations, and Guo Shaoming said that it will try its best to protect the livelihood of its employees. Left is vice chairman Guo Luoguizhen, right is chief financial officer Lu Hao

The company bluntly said that the Hong Kong and Macao market’s retail sales in the first half fell nearly 20% to 2.813 billion yuan, mainly due to a 24.8% drop in sales in Hong Kong. The company also revealed that from October to the 18th of this month, the retail sales and same-store sales in Hong Kong and Macau markets fell by nearly 40%!

The Chairman and Chief Executive Officer, Mr. Guo Shaoming, described the current operational dilemma as “the road to recovery and the thorny road”. The primary objective is to improve the profit contribution of Hong Kong and Macau stores, strictly control costs, and try to protect the livelihood of employees. At present, the company strictly controls the manpower of various departments through natural loss. The logistic staff of some ranks also started from September, and paid two to four days of unpaid leave every month. Teachers are encouraged to make clearing of the expenses as much as possible to reduce the related provision expenses.

The owner’s rent reduction help is not big

Another company said that some owners have agreed to short-term rent reduction, but the help is not big. Therefore, the company will continue to strive for rent concessions based on the sales and profitability of its stores, and reduce the store area or sub-lease near lower cost stores when necessary, and even replace long-term leases with short-term leases when the contract expires. Or close a store that performs poorly. The company will also reduce the number of shops in the tourist area. During the period, the company had a total of 265 stores, a decrease of nine from the end of March. The total number of stores in the Hong Kong and Macau markets is 118.

Mainland’s turnover during the period increased slightly by 0.2% to RMB 132 million in local currency terms, while same store sales increased by 9.4% in local currency terms.

Dim Christmas Spring Festival performance

According to the company, social events in Hong Kong still seriously affect tourism and business activities. It is expected that the number of passengers in the Christmas and Lunar New Year period will deteriorate again. As Mainland visitors are the main source of revenue for their Hong Kong and Macau markets, it is necessary to speed up the development of the Mainland shop network, especially in southern China.

In fact, since the listing of Salsa in 1997, there has been no interim dividend for the first half of September, and the company has issued interim dividends for all other fiscal years. The company admits that because the operating environment of Hong Kong’s core market is grim and its prospects are unclear, no interim dividend will be paid in this fiscal year. In the same period last year, an interim dividend of 7 cents was paid.

Real estate finance is implicated

Hong Wei, chief strategist of Bank of Communications International, said that the decline in Sa Sa’s performance was in line with market expectations. The company did not pay dividends except for the “winter” of cash. It also reflected the impact of demonstrations on the retail industry. The company is mainly engaged in passenger business, so the business Performance is more sensitive to demonstrations. However, he believes that the impact is only the first wave, and it is expected that the second wave of shocks will emerge in real estate and financial markets.


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