HK cosmetics giant posts profit rise

Sa Sa International Holdings Ltd, Hong Kong's largest cosmetics retailer, said annual profit surged 20 percent as sales were boosted by rising tourism in the city.

Net income for the year ended on March 31 climbed to HK$221.8 million (US$28.3 million), or 16.3 Hong Kong cents a share, from HK$185.2 million, or 13.7 HK cents, a year earlier, the company said in a statement to Hong Kong's stock exchange yesterday. Sales rose 10.3 percent to HK$2.89 billion.

The Hong Kong-based cosmetic chain is a favorite among visitors from China mainland, who account for half of the city's total tourist arrivals, according to Bloomberg News. Sales also rose on the city's strong economic growth and low jobless rate.

Hong Kong retail sales expanded 9.4 percent in the first quarter while the economy grew 5.6 percent. Visitor arrivals rose 6.3 percent to 6.61 million in the first three months.

"Margins have improved as Sa Sa sells more self-owned brands and those to which it has exclusive rights," Carrie Chan, a Hong Kong-based analyst at ICEA Securities Ltd, said before the earnings were announced. "It has more stores than other competitors in Hong Kong and the highest brand awareness among mainland tourists."

The 53 stores in Hong Kong and Macau contributed more than 80 percent of the group's total revenue. It also runs eight outlets in Taiwan, 10 in Singapore and another 10 in Malaysia.