Citi slightly raised the target price for SA SA INT'L to HKD 1.02 and reiterated the "Buy" rating, as the interim results exceeded expectations

Citigroup's research report indicates that SA SA INT'L (00178.HK) exceeded expectations for the first half of the fiscal year ending September 2026, recording a net profit of HKD 50 million, reaching the upper limit of its profit warning forecast. The growth in net profit was mainly driven by a 7% year-on-year increase in sales due to the recovery in tourist numbers, along with improved consumer sentiment and optimized market strategies. The gross profit margin was affected by the product mix, declining by 0.9 percentage points to 37.9%. The dividend payout ratio remains stable at 71%, and it is expected to continue in the future.

The bank stated that although there is uncertainty in the macro environment, the company's priority is to enhance sales and gross profit, and the decision to close offline operations in mainland China has begun to show results; it has raised the net profit forecast for the fiscal years 2026 to 2028 by 11% to 15% to reflect improved sales prospects and increased operating leverage, leading to upward adjustments in revenue and profit margin forecasts. Based on attractive valuations, it maintains a "Buy" rating, raising the target price from HKD 1 to HKD 1.02