Citigroup: Maintains "buy" rating for SA SA INT'L (00178) with a target price reduced to HK$1.18.

Citibank released a research report stating that it maintains a "buy" rating on SA SA INT'L (00178) due to low valuation demand. The profit forecast for the fiscal years 2025 to 2027 has been lowered by 50% to 53% to reflect weaker sales and profit assumptions, with the target price lowered from 1.49 Hong Kong dollars to 1.18 Hong Kong dollars. The report stated that SA SA INT'L's net profit for the first half of the fiscal year was 32 million Hong Kong dollars, lower than the bank's expectations and the profit warning threshold. The significant decrease in net profit was due to a 10% decrease in sales compared to the same period last year, as well as a decrease in gross profit margin due to the drag from the growth of online sales in mainland China. The bank pointed out that SA SA's dividend payout ratio remains stable at 72%, and is expected to remain stable in the future.