Yingxi verifies the trend of performance restoration, and the stock price of Sa Sa International (00178)'s “return blood” doubled during the year

Against the backdrop of the Hong Kong stock market index continuing to fluctuate in the range and lack of clear direction, Hong Kong's established beauty retail company Sa Sa Sa International (00178) has emerged in a remarkable independent market.

Zhitong Finance has noticed that since February of this year, Sa Sa Sa International has broken away from the bottom consolidation pattern and started a volatile upward trend, and the focus of stock prices has continued to rise. This month, the stock's trend also showed an accelerated upward trend, with an increase of nearly 20% during the month. In the trading session on September 22, Sa Sa Sa International hit a high of HK$1.21, and its total market capitalization reached the level of HK$3.6 billion, setting a new high in stock prices over the past three years. However, the stock price then fluctuated and declined. By the close, it was HK$1.155, down 1.28% in a single day, and the total market value was fixed at HK$3,584 million. Since February, the cumulative increase in the stock price of Sa Sa Sa International is close to 120%.

While stock prices are rising steadily, new benefits have also appeared in the news of Sa Sa Sa International. The company announced Yingxi on September 21. It is estimated that net profit due to mother for the six months ending September 30 will exceed HK$150 million, a significant increase of nearly two times that of HK$50.2 million in the same period last year.

Based on the above information, does the strong reversal in Sa Sa Sa International's stock price mean that capital has predicted in advance that the company's business will enter a phase of accelerated recovery? With the release of growth potential, does Sa Sa Sa International's stock price trend have the potential to further improve?

The market is dominated by bulls, and the stock price has hit new highs in a row

To find out whether funding predicted the recovery of Sa Sa Sa's international business in advance, we might be able to find clues from the traces left on the market. Looking at it over a long period of time, what is behind this round of independent Sa Sa Sa International market is actually a reversal in the monthly technical pattern. Since mid-2024, the stock has experienced a downward trend of more than a year in the 0.43 to HK$0.7 range, then completed a volume breakthrough at the beginning of this year. The monthly level showed a typical “arc bottom” structure. Looking at the current time, Sa Sa Sa International's daily, weekly, and monthly moving average system has formed a standard multi-head arrangement. This situation where the bottom chips are locked in for a long time and then the main upward wave begins, which has high trend guiding significance in terms of technology.

Judging from the operating trend, since February of this year, after Sha Sa International gradually broke away from the bottom consolidation pattern, there has been no short-term hype characteristic of rapid rise and fall; instead, it has gradually raised the bottom at a pace of progress and retreat. Also, unlike the trend of repeated fluctuations in the Hong Kong stock market during the same period, the stock has emerged from an independent upward channel where the center of gravity continues to shift upward. This trend usually means that capital intervention is clearly continuous. In particular, since September, the upward pace of Sa Sa Sa International has changed markedly, and the stock price has begun to rise at an accelerated pace, rapidly approaching 20% during the month. In the trading session on September 22, the stock hit a high of HK$1.21, continuing to hit a new high in the past two years. However, as the stock price reached a new high, selling pressure immediately surged. In the afternoon, the stock showed a volatile downward trend and finally closed in the green market.

Judging from the volume and turnover situation, on September 22, Sa Sa Sa International's full-day turnover was HK$14.517 million, with a full day turnover rate of 0.40%, which is an increase from the previous two trading days. This may indicate that after the stock price repeatedly reached new highs, the willingness of some of the funds to leave the market increased.

It is worth mentioning that the current stock price of Sa Sa Sa International has reached a phased high, and this is also a key resistance level in terms of market psychology and in the early stages. If Sa Sa Sa International wants to effectively break through this position in the future, it may still need further confirmation of fundamentals to provide support. If it can break through this area in the future, the medium term upward space for Sa Sa International is expected to open up further; conversely, if it is repeatedly blocked here, the possibility that the stock price will step back on the short-term moving average to seek support and exchange time for space is not ruled out.

Yingxi verifies that performance is picking up. Is the continuation of the rise still to be tested?

Strong performance on the market ultimately requires fundamental verification. However, Yingxi, which was released by Sa Sa International on September 21, can be seen as a phased confirmation. According to the announcement, the company's profit data increased significantly in the first half of the fiscal year, and judging from the driving factors disclosed in the announcement, the growth mainly came from two dimensions. First, the Group's core markets in Hong Kong and the Macau SAR have achieved considerable year-on-year growth in same-store sales, number of transactions, average amount per transaction, and number of items per transaction. This shows that the recovery in consumer spending by visitors to Hong Kong is being effectively transformed into actual revenue on the store side. The signs of improving business quality with simultaneous increases in volume and price are quite clear. Second, the Group's B2C online sales and profits are growing rapidly, which means that the online business has gradually entered the profit cashing period from an early stage of scale expansion. For a beauty retail company that started with an offline store, online channels can achieve profitable growth, opening up flexible profit space in the medium to long term to a certain extent.

It's worth noting that Yingxi was not an isolated incident. Looking back at the 2026 fiscal year (ending March 31, 2026) annual report previously disclosed by Sa Sa Sa International, the company's annual revenue was HK$4.383 billion, up 14.2% year on year; net profit to mother also reached about HK$200 million, a sharp increase of 160.5% year on year. Combined with the 18.9% increase in same-store sales in the Chinese, Hong Kong and Macau markets in the annual report and the steady growth of about 22% in the online B2C business, it is easy to see that this mid-term profit is further verifying that the fundamentals of Sa Sa Sa Sa International are in a clear recovery phase. In response, Jefferies published a research report stating that Sa Sa Sa International's earnings came out earlier than expected, which surprised the market, showing that the company's net profit recovery continued, maintained a “buy” rating, and gave a target price of HK$1.4.

The recovery in consumption in Hong Kong and Macau combined with the increase brought about by online business. Together, the two form the core logic of improving the fundamentals of Sa Sa Sa International. This also means that the market's previous expectations for the recovery of the company's business were not completely out of place; the advance layout of market capital was probably based on predictions of this trend. However, judging from the trend, Sa Sa Sa International's stock price actually partially reflects the market's optimistic expectations for performance growth. With the initial implementation of the fundamental reversal logic, it is worth watching whether the stock price of Sa Sa Sa International will go further in the future.

All in all, at a time when the Hong Kong stock market still lacks a systematic direction, Sa Sa Sa International has stepped out of the undertone of the independent market, which resonates with the reversal of fundamentals and early capital pricing. For investors, the next focus is on confirming the sustainability of profit recovery. Looking at the future market, Sa Sa Sa International's valuation has recovered to a leap of value revaluation, and it still requires continued implementation of performance to inject momentum. This will also be the core of testing whether Sa Sa Sa International can further open up room for upward stock prices.