by winston » Wed Jun 25, 2008 10:18 pm
Not vested.
Sa Sa's Profit Rises as Tourists Buy More Cosmetics (Update2)
By Stephanie Wong
June 25 (Bloomberg) -- Sa Sa International Holdings Ltd., Hong Kong's largest cosmetics retailer, said its profit gained 25 percent after sales of make-up and skincare products were boosted by increasing tourism in the territory.
Net income rose to HK$276.3 million ($35.4 million) in the year ended March 31, or 20.1 Hong Kong cents a share, from last year's HK$220.5 million or 16.2 cents a share, the company said in a statement to Hong Kong's stock exchange today. Sales expanded by 20.3 percent to HK$3.2 billion, Sa Sa said.
The chain, with 55 outlets in Hong Kong and Macau, is the favorite of mainland China's visitors, selling brands like Maybelline and Rexona to budget-conscious travelers. Tourists' spending rose 16 percent last year in Hong Kong to HK$140.5 billion, sustaining Sa Sa's sales even after the company sold its slimming centers and beauty salons.
``Sa Sa continues to rely on organic growth,'' said Raymond Siu, an analyst at Quam Ltd. in the city. ``About 40 percent of Hong Kong store sales come from mainland tourists and this will continue to give it a sustainable growth.''
Sa Sa's total profit, including HK$4.9 million from its discontinued beauty business and a HK$67 million one-time gain from disposing that operation, rose 57 percent to HK$348.2 million. Total sales increased 19.5 percent to HK$3.45 billion, Sa Sa said.
Sa Sa shares rose 1.9 percent to close at HK$3.30 in Hong Kong today after rising as much as 4.6 percent in earlier trading. The stock had risen 3.5 percent this year, performing better than the 18.6 percent slump in Hong Kong's benchmark Hang Seng Index.
Higher Dividends
The company will pay a final dividend of 15 Hong Kong cents, compared with 11 Hong Kong cents a year earlier.
Hong Kong attracted more than 28 million tourists last year with 55 percent from mainland China, its largest source market. Spending by increasing numbers of tourists from China as well as local residents drove a turnover growth of 18.8 percent over last fiscal year, the company said.
Sa Sa said it made slow but steady progress in the mainland Chinese market as it expanded on the distribution network. It aims to more than double the number of outlets in mainland China setting up about 39 outlets by the end of the next fiscal year.
The company, which also has operations in Singapore, Malaysia and Taiwan, said it also plans to build its foothold in its overseas markets.
The sale of Sa Sa's beauty services division was completed on March 31. The move was aimed to focus on its retail and brand management operations.
The company has strengthened its retail branding in the past year by focusing on sponsorships, including the Miss Hong Kong Pageant and Ladies' Purse Day, one of the most popular and high- profile racing days in Hong Kong.
It's all about "how much you made when you were right" & "how little you lost when you were wrong"