Sa Sa's Golden Week sales dropped 1% y/y

Meanwhile, mainland tourists sales remained flat.

Sa Sa's Hong Kong / Macau sales during the Golden Week (1-7 October) only saw 1% y/y decline and SSS was only down 3% y/y.

According to a research note from Barclays, meanwhile, sales from mainland tourists remained flat y/y, with 10% growth in the number of transactions, offset by a 10% drop in average spending.

Further, overall sales were dragged down by a drop of about 6% y/y in sales to local customers.

Here's more from Barclays:

According to a survey conducted by Hong Kong Retail Management Association, most retailers recorded sales declines ranging from 15% to over 50% during the Golden Week. While we had anticipated strong traffic in the unaffected stores, Sa Sa’s overall SSS decline at 3% is still better than what we had anticipated.

We have an Equal Weight rating on Sa Sa as we see current valuations of 15x FY15E P/E as full (based on our estimates, which are similar to Bloomberg consensus).

Also, as we look out longer term, we expect unexciting growth coming out of Hong Kong retail in general as we believe higher-spending Chinese tourists are increasingly travelling to destinations outside of Hong Kong.

We also see Hong Kong as too dependent on mainland visitor arrivals, which is driven by policies on visas.