[Financial Highlights](index=4&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) [Financial Highlights](index=4&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) For FY2024/25, the Group's turnover and core profit both decreased year-on-year, with turnover at HKD 3.94 billion and core profit at HKD 107 million, while maintaining a robust financial position and a 70% core profit payout ratio FY2024/25 Financial Summary | Metric | 2024/25 Fiscal Year | Year-on-Year Change | | :--- | :--- | :--- | | **Turnover** | 3,941.7 Million HKD | -9.7% | | **Gross Profit** | 1,570.7 Million HKD | -11.9% | | **Gross Margin** | 39.8% | -1.0 Percentage Point | | **Profit for the Year** | 77.0 Million HKD | -64.8% | | **Core Profit*** | 107.0 Million HKD | -51.1% | | **Basic EPS** | 2.5 HK Cents | -4.6 HK Cents | | **Basic Core EPS*** | 3.5 HK Cents | -3.6 HK Cents | | **Final Dividend** | 1.7 HK Cents | - | | **Payout Ratio** | ~70% (based on core profit) | - | *Excluding provision for Mainland China store closure costs Robust Financial Position (As of March 31, 2025) | Metric | Amount | | :--- | :--- | | **Total Available Funds** | 686.8 Million HKD | | **Total Cash** | 371.1 Million HKD | | **Current Ratio** | 1.6 Times | Asia Retail Network and Sales Performance (As of March 31, 2025) | Region | Number of Sales Points | Offline Sales Change | | :--- | :--- | :--- | | Hong Kong and Macau | 84 | -12.9% | | Mainland China* | 18 | -38.2% | | Southeast Asia | 72 | +15.4% | | **Total** | **174** | - | *The Group plans to close all Mainland China offline stores by June 30, 2025 Group Turnover Geographical Distribution (For the year ended March 31, 2025) | Region | Proportion | | :--- | :--- | | Hong Kong and Macau | 75.9% | | Mainland China | 13.2% | | Southeast Asia | 10.6% | | Others | 0.3% | [Strategic Report](index=18&type=section&id=%E7%AD%96%E7%95%A5%E5%A0%B1%E5%91%8A) [Three Key Development Strategies](index=18&type=section&id=%E8%8E%8E%E8%8E%8E%E3%80%8C%E7%B7%A0%E9%80%A0%E7%BE%8E%E9%BA%97%E4%BA%BA%E7%94%9F%E3%80%8D%E7%9A%84%E4%B8%89%E5%A4%A7%E7%99%BC%E5%B1%95%E7%AD%96%E7%95%A5) The Group's 'Creating a Beautiful Life' mission is supported by three core strategies: people-centricity, sourcing global trend products, and building an OMO omnichannel experience for sustainable growth - The Group's three core development strategies include: - **People-centricity**: Leveraging digitalization to analyze consumer preferences and providing quality shopping experiences through professional beauty consultants[51](index=51&type=chunk) - **Sourcing global quality trend products**: Collaborating closely with trend brands to build an attractive portfolio of flagship products[52](index=52&type=chunk) - **Online-Merge-Offline (OMO)**: Establishing an efficient sales network based on regional consumption habits to enhance customer activity and repurchase rates[53](index=53&type=chunk) - To implement the "People-centricity" strategy, the Group will focus on four key areas: - **Next-Generation Customer Relationship Management (CRM)**: Unifying regional membership mechanisms to provide personalized value-added services[55](index=55&type=chunk) - **Enhanced Digital Management**: Centralizing operational data management to improve decision-making efficiency and accuracy[55](index=55&type=chunk) - **Strengthened OMO Operating Model**: Enhancing technological capabilities to offer diverse shopping and pickup options[55](index=55&type=chunk) - **Focus on Talent Development**: Fostering two-way interaction between the company and employees to enhance employee skills[55](index=55&type=chunk) [Product and Brand Strategy](index=19&type=section&id=%E6%90%9C%E7%BE%85%E5%85%A8%E7%90%83%E6%9C%80%E5%84%AA%E8%B3%AA%E7%9A%84%E6%BD%AE%E6%B5%81%E7%94%A2%E5%93%81) The Group optimizes its brand portfolio and inventory using data analytics, focusing on building a strong exclusive brand lineup for higher loyalty and profitability, offering over 600 international and 120 exclusive brands Product Portfolio Overview (As of March 31, 2025) | Metric | Quantity/Range | | :--- | :--- | | **International Beauty Brands** | Over 600 | | **Exclusive Agency Brands** | Over 120 | | **Product Categories** | Over 9,000 | | **Product Price Range** | HKD 1 – HKD 5,000 | - The Group is committed to building a strong lineup of exclusive brands, as they provide greater influence in strategy, positioning, marketing, pricing, and sales channels, helping the Group stand out among retailers, attract partners, and maintain ideal profitability[60](index=60&type=chunk) - Sa Sa establishes long-term partnerships with brands and suppliers, leveraging omnichannel sales and social networks to comprehensively tell brand stories and collect customer feedback for product development, pricing, and promotion decisions, creating synergistic effects[58](index=58&type=chunk) [Omnichannel Strategy](index=22&type=section&id=%E7%B7%9A%E4%B8%8A%E7%B7%9A%E4%B8%8B%E8%9E%8D%E5%90%88%E7%9A%84%E5%85%A8%E6%B8%A0%E9%81%93%E8%B3%BC%E7%89%A9%E6%97%85%E7%A8%8B) The Group enhances its omnichannel sales network by leveraging online platforms' 'infinite shelf' and social media to complement offline operations, aiming to boost brand influence and customer engagement across its 174 retail stores Retail Store Geographical Distribution (As of March 31, 2025) | Region | Number of Retail Stores | | :--- | :--- | | Hong Kong and Macau | 84 | | Mainland China | 18 | | Southeast Asia | 72 | | **Total** | **174** | - The Group will leverage various popular social media platforms to develop and review the effectiveness of online operating models, utilizing advantages like live commerce and online stores' "infinite shelves" to complement offline operational limitations, meeting customer needs and enhancing social media influence[65](index=65&type=chunk) [Chairman's Statement](index=27&type=section&id=%E4%B8%BB%E5%B8%AD%E7%8D%BB%E8%BE%9E) [Chairman's Statement](index=27&type=section&id=%E4%B8%BB%E5%B8%AD%E7%8D%BB%E8%BE%9D) Chairman Dr. Simon Kwok highlights the Group's steady development despite global uncertainties, with FY2024/25 turnover at HKD 3.94 billion and core profit at HKD 107 million, driven by strategic shifts in Mainland China and Southeast Asia, while maintaining a stable 70% core profit payout ratio FY2024/25 Performance Overview | Metric | Amount | | :--- | :--- | | **Overall Turnover** | 3,941.7 Million HKD | | **Core Profit** | 107.0 Million HKD | - Hong Kong and Macau's offline turnover year-on-year decline narrowed from **20.1% in Q1** to **4.4% in Q4**, primarily benefiting from tourism stimulus measures like "multiple-entry visas" and the "mega event economy"[88](index=88&type=chunk) - Group business strategy adjustments: - **Mainland China**: Due to online retail dominance (80%), the Group plans to close all offline stores by end of June 2025, focusing resources on online business to achieve profitability in H2 FY2025/26[89](index=89&type=chunk) - **Southeast Asia**: Both online and offline sales recorded double-digit growth, but the Group will closely monitor variables arising from 2025 tariff issues[89](index=89&type=chunk) - The Board recommends a final dividend of **1.7 HK cents per share**, bringing the total annual dividend to **2.45 HK cents per share**, representing approximately **70% of the core profit** for the year, maintaining a consistent and stable dividend policy[89](index=89&type=chunk) [Management Discussion and Analysis](index=29&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) [Financial Performance Summary](index=29&type=section&id=%E8%B2%A1%E5%8B%99%E8%A1%A8%E7%8F%BE%E6%91%98%E8%A6%81) For FY2024/25, the Group's turnover decreased by **9.7%** to **HKD 3.94 billion**, with profit for the year down **64.8%** to **HKD 77.0 million**, primarily due to weak Hong Kong and Macau offline sales, partially offset by slight online growth Consolidated Income Statement Summary (Million HKD) | Metric | 2025 Fiscal Year | 2024 Fiscal Year | Year-on-Year Change | | :--- | :--- | :--- | :--- | | **Turnover** | 3,941.7 | 4,367.5 | -9.7% | | **Gross Profit** | 1,570.7 | 1,783.4 | -11.9% | | **Operating Profit** | 106.3 | 285.1 | -62.7% | | **Profit for the Year** | 77.0 | 218.9 | -64.8% | - Offline sales year-on-year decline narrowed from **17.4% in H1** to **6.2% in H2**, with a full-year decline of approximately **11.9%**. Online sales slightly increased by **1.2%** to **HKD 715 million**, primarily driven by growth in the Southeast Asian market[113](index=113&type=chunk) - Excluding a one-off provision of **HKD 30.0 million** for Mainland China store closure costs, core profit was **HKD 107 million**. Basic core EPS was **3.5 HK cents**. The Board recommends a final dividend of **1.7 HK cents per share**, bringing the total annual dividend to **2.45 HK cents per share**, with a payout ratio of approximately **70% of core profit**[115](index=115&type=chunk) [Market Overview](index=30&type=section&id=%E5%B8%82%E5%A0%B4%E6%A6%82%E8%A6%BD) The global economy faces geopolitical, inflation, and tariff challenges, while Hong Kong and Macau adapt to changing consumption patterns, Mainland China's beauty retail undergoes fierce competition, and Southeast Asia's e-commerce thrives amidst tariff uncertainties - **Hong Kong and Macau**: Local residents' cross-border travel to Mainland China has become normalized, impacting local footfall. Meanwhile, visa measures like "multiple-entry visas" are expected to inject momentum into the tourism retail sector. Mainland Chinese tourists' consumption patterns are shifting, showing a greater willingness to try niche brands, which presents opportunities for the Group to develop exclusive brands[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk) - **Mainland China**: The beauty retail industry is highly competitive and undergoing an adjustment period. Online content has become the mainstream sales model, with a market preference for cost-effective and functional products, creating opportunities for domestic and niche brands[108](index=108&type=chunk) - **Southeast Asia**: The economy continues to recover, with high internet penetration and thriving e-commerce. However, tariff issues starting from 2025 introduce uncertainty for local trade[109](index=109&type=chunk)[110](index=110&type=chunk) [Business Review](index=33&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group's business review by region shows Hong Kong and Macau as the main revenue source despite a **12.3%** turnover decline, Mainland China down **10.5%** due to adjustments, and Southeast Asia up **14.7%**, with offline sales comprising **81.9%** of total turnover FY2024/25 Turnover by Market (Million HKD) | Market | Offline | Online | Total Turnover | Year-on-Year Change (%) | % of Total Turnover | | :--- | :--- | :--- | :--- | :--- | :--- | | **Hong Kong and Macau** | 2,792.2 | 199.6 | 2,991.8 | ▼ 12.3% | 75.9% | | **Mainland China** | 102.6 | 417.9 | 520.5 | ▼ 10.5% | 13.2% | | **Southeast Asia** | 331.5 | 88.1 | 419.6 | ▲ 14.7% | 10.6% | | **Others** | – | 9.8 | 9.8 | ▼ 5.8% | 0.3% | | **Total** | **3,226.3** | **715.4** | **3,941.7** | **▼ 9.7%** | **100.0%** | [Hong Kong and Macau](index=34&type=section&id=1.%20%E9%A6%99%E6%B8%AF%E5%8F%8A%E6%BE%B3%E9%96%80) Hong Kong and Macau turnover decreased by **12.3%** to **HKD 2.99 billion**, with profit down **45.0%** to **HKD 129 million**, as offline sales decline narrowed and online sales reached **HKD 199 million** with **6.7%** penetration - Offline sales decline in Hong Kong and Macau significantly narrowed from **-19.4% in H1** to **-6.3% in H2**, primarily due to tourism stimulus measures driving footfall recovery and the Group's product portfolio optimization[130](index=130&type=chunk)[131](index=131&type=chunk) - As of March 31, 2025, the Group operated **84 stores** in Hong Kong and Macau, a net increase of **2 stores**. The number of stores in core tourist areas was **26**, compared to **45** pre-pandemic[132](index=132&type=chunk) - Hong Kong and Macau online business penetration increased from **0.1% pre-pandemic** to **6.7%**. Live commerce showed initial effectiveness, contributing **18.3%** of total online sales in Hong Kong and Macau[133](index=133&type=chunk)[136](index=136&type=chunk) [Mainland China](index=37&type=section&id=2.%20%E4%B8%AD%E5%9C%8B%E5%85%A7%E5%9C%B0) Due to weak consumption and online trends, the Group will close all Mainland China offline stores by June 30, 2025, focusing on online business, which contributed **80.3%** of the **HKD 520 million** turnover, with market loss narrowing to **HKD 14.9 million** - The Group decided to close all Mainland China offline stores by **June 30, 2025**, to concentrate resources on developing online business, aligning with local consumption trends[141](index=141&type=chunk) - Mainland China's online turnover for the fiscal year reached **HKD 418 million**, a slight year-on-year increase of **0.6%**, accounting for **80.3%** of the region's total sales. The Group's proprietary WeChat mini-program saw a **13.4%** year-on-year increase in Monthly Active Users (MAU)[146](index=146&type=chunk)[148](index=148&type=chunk) [Southeast Asia](index=39&type=section&id=3.%20%E6%9D%B1%E5%8D%97%E4%BA%9E) Southeast Asia's total sales grew **14.7%** to **HKD 420 million**, with offline sales up **15.4%** and online sales up **12.4%**, despite a **HKD 5 million** loss due to re-entry costs in Singapore where **5 stores** were reopened - Southeast Asia's total sales reached **HKD 419.6 million**, a year-on-year increase of **14.7%**. Offline sales accounted for **79.0%**, and online sales for **21.0%**[151](index=151&type=chunk) - The Group re-entered the Singapore offline market in **December 2023**, operating **67 stores in Malaysia** and **5 stores in Singapore** by fiscal year-end[154](index=154&type=chunk)[155](index=155&type=chunk) - Online business operates through third-party platforms like Shopee, Lazada, and Zalora, covering Singapore, Malaysia, the Philippines, and Thailand, maintaining a leading position in the "Beauty & Health" category across multiple platforms[158](index=158&type=chunk) [Future Outlook](index=41&type=section&id=%E6%9C%AA%E4%BE%86%E5%B1%95%E6%9C%9B) Facing uncertain global conditions, the Group will remain agile, adapting product offerings, accelerating digital upgrades, and enhancing OMO to achieve sustainable profit growth through increased sales and gross profit while maintaining stable gross margins - The Group will closely monitor market changes and strengthen inter-departmental collaboration to maintain and enhance market competitiveness with greater flexibility and responsiveness[160](index=160&type=chunk) - The core strategy is to create a thoughtful, comprehensive shopping journey, aiming for sustainable profit enhancement by pursuing dual growth in sales and gross profit while maintaining stable gross margins[160](index=160&type=chunk) [Financial Position](index=41&type=section&id=%E8%B2%A1%E5%8B%99%E6%A6%82%E6%B3%81) The Group maintains a robust financial position with **HKD 1.16 billion** in total equity and **HKD 687 million** in available funds as of March 31, 2025, featuring zero gearing and 103 inventory turnover days Capital and Liquidity Position (As of March 31, 2025) | Metric | Amount (Million HKD) | | :--- | :--- | | **Total Equity** | 1,157.7 | | **Working Capital** | 465.3 | | **Cash and Bank Balances** | 371.1 | | **Undrawn Bank Facilities** | 315.7 | | **Total Available Funds** | 686.8 | - As of March 31, 2025, and 2024, the Group's gearing ratio (total borrowings to total equity) was **zero**[164](index=164&type=chunk) - The Group's inventory stood at **HKD 670 million**, with inventory turnover days increasing by **3 days to 103 days**[167](index=167&type=chunk) [Environmental, Social and Governance Report](index=50&type=section&id=%E7%92%B0%E5%A2%83%E3%80%81%E7%A4%BE%E6%9C%83%E5%8F%8A%E7%AE%A1%E6%B2%BB%E5%A0%B1%E5%91%8A) [Environmental Protection (Our Planet)](index=56&type=section&id=%E6%88%91%E5%80%91%E7%9A%84%E5%9C%B0%E7%90%83) The Group is committed to reducing environmental impact, achieving its **70%** GHG emission reduction target for Scope 1 and 2, with total emissions down **2.1%** to **5,956 tonnes CO2e**, and significantly reducing packaging material usage, including a **17.6%** decrease in shopping bag usage - The Group has achieved its 2025 reduction target for Scope 1 and 2 greenhouse gas emissions, decreasing them by **70%** compared to the 2014/15 baseline year[247](index=247&type=chunk)[248](index=248&type=chunk) Greenhouse Gas Emissions Performance | Metric | 2024/25 Fiscal Year | Year-on-Year Change | | :--- | :--- | :--- | | **Total GHG Emissions** | 5,956 Tonnes CO2e | -2.1% | | **Electricity Consumption** | 11,697 MWh | -3.3% | | **Carbon Intensity (per square meter)** | 130 kg CO2e | -4.1% | Packaging Material Usage Change | Material | 2024/25 Fiscal Year | Year-on-Year Change | | :--- | :--- | :--- | | **Plastic Shopping Bags** | 1,173,057 Units | -17.6% | | **Paper Cartons (Offline Business)** | 104,791 kg | -26.9% | | **Paper Cartons (Online Business)** | 91,357 kg | -37.8% | | **Air Cushions** | 8,442 kg | -22.7% | [Employee Care (Our People)](index=68&type=section&id=%E6%88%91%E5%80%91%E7%9A%84%E5%93%A1%E5%B7%A5) The Group prioritizes employee care, with **1,544** staff, **79.4%** female, and **96.6%** receiving training, averaging **180.5 hours** per person, while also improving occupational health and safety with reduced accidents and lost workdays Employee Training Overview | Metric | 2024/25 Fiscal Year | Year-on-Year Change | | :--- | :--- | :--- | | **Proportion of Employees Trained** | 96.6% | +7.5 Percentage Points | | **Total Training Hours** | 278,765 Hours | +30.9% | | **Average Training Hours per Employee** | 180.5 Hours | +41.8% | - The Group demonstrates high gender diversity, with **79.4%** female employees. At the leadership level, **63%** of directors are female, and **65%** of management are female[285](index=285&type=chunk)[281](index=281&type=chunk) Occupational Health and Safety Performance | Metric | 2024/25 Fiscal Year | Year-on-Year Change | | :--- | :--- | :--- | | **Work-related Accidents** | 10 Cases | -16.7% | | **Total Lost Workdays due to Accidents** | 74 Days | -69.0% | | **Work-related Fatalities** | 0 | Unchanged | [Customer Responsibility (Our Customers)](index=77&type=section&id=%E6%88%91%E5%80%91%E7%9A%84%E9%A1%A7%E5%AE%A2) The Group prioritizes product quality and customer rights, evidenced by a **68.5%** increase in compliments for offline stores, continuous "Quality Tourism Services" recognition, and a strategic focus on expanding sustainable beauty product offerings Product Responsibility Performance | Metric | 2024/25 Fiscal Year | Year-on-Year Change | | :--- | :--- | :--- | | **Compliments Received by Offline Stores** | 214 Cases | +68.5% | | **Complaints Received by Offline Stores** | 59 Cases | +7.3% | | **Product Recalls due to Safety and Health Reasons** | 0 | Unchanged | | **Hong Kong Retail Management Association Mystery Shopper Score** | 91.39 Score | +1.7% | - The Group actively promotes sustainable beauty products, offering over **280 clean beauty products** from more than **30 brands** in stores, and launched **37 exclusive products** using FSC-certified paper packaging[348](index=348&type=chunk) - The Group has established a comprehensive information security system to protect consumer personal information and implemented detailed information security policies, with no significant information security or customer privacy incidents occurring this fiscal year[357](index=357&type=chunk) [Community Investment (Our Community)](index=83&type=section&id=%E6%88%91%E5%80%91%E7%9A%84%E7%A4%BE%E5%8D%80) The Group is committed to community investment, contributing **HKD 2.0 million** this fiscal year, a **17.6%** increase, and **HKD 35.6 million** cumulatively since 2013, while fostering future retail leaders through university partnerships and earning "Caring Company" recognition for over 20 years - This fiscal year, the Group invested **HKD 2.0 million** in the community, a **17.6%** year-on-year increase. Since its establishment in 2013, the charitable foundation has cumulatively contributed **HKD 35.6 million**[369](index=369&type=chunk)[370](index=370&type=chunk) - The Group has been awarded the "Caring Company" logo by the Hong Kong Council of Social Service for over **20 consecutive years**, acknowledging its long-term efforts in corporate social responsibility[372](index=372&type=chunk) - The Group actively collaborates with institutions like Lingnan University and The Chinese University of Hong Kong to host business case competitions and offers summer internship programs, dedicated to nurturing future retail industry elites[373](index=373&type=chunk)[374](index=374&type=chunk)[375](index=375&type=chunk) [Corporate Governance and Risk Management](index=95&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E8%88%87%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) [Corporate Governance Report](index=95&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%A0%B1%E5%91%8A) The Group maintains high corporate governance standards, complying with most code provisions, with a diverse Board of **8 directors** including **50% INEDs** and **62.5% female**, demonstrating strong independence and active participation in governance - Except for the combined roles of Chairman and Chief Executive Officer (Dr. Simon Kwok), the Company has complied with all code provisions of the Corporate Governance Code. The Board believes this structure facilitates the execution of business strategies and maximizes operational efficiency[416](index=416&type=chunk) - The Board's composition demonstrates high independence and diversity, with **4 Independent Non-Executive Directors (44.4%)** and **5 female directors (55.6%)** among its **9 members**. The Audit Committee is composed entirely of Independent Non-Executive Directors[422](index=422&type=chunk)[425](index=425&type=chunk) - During the year, **5 Board meetings** were held with an average attendance rate of **97.2%**; **19 Board committee meetings** were held, with attendance rates for all committees exceeding **96%**, indicating active director participation in corporate governance[415](index=415&type=chunk)[481](index=481&type=chunk) [Enterprise Risk Management Report](index=119&type=section&id=%E4%BC%81%E6%A5%AD%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86%E5%A0%B1%E5%91%8A) The Group's systematic enterprise risk management framework, led by the Risk Management Committee, identifies and mitigates 10 major risks across strategic, operational, financial, and compliance areas, with consumer behavior, product competitiveness, cybersecurity, and talent acquisition risks trending upwards - The Group's enterprise risk management framework comprises three main components: risk governance, risk infrastructure and oversight mechanisms, and risk ownership allocation, employing both bottom-up and top-down approaches to identify and manage risks[524](index=524&type=chunk)[526](index=526&type=chunk) Summary of Key Risks and Mitigation Measures | Key Risk | Mitigation Plan | Risk Assessment Trend | | :--- | :--- | :--- | | **1. Consumer Behavior and Lifestyle** | Focus on exclusive brands, strengthen new product categories, promote OMO strategy | Upward | | **2. Product Competitiveness** | Conduct market research, invest in data analytics, introduce emerging brands, broaden product portfolio | Upward | | **3. Product Quality and Counterfeit Goods** | Strict quality control, participate in "No Fakes Pledge" scheme, offer 30-day shopping guarantee | Stable | | **4. Market Concentration Risk** | Diversify sales channels, formulate market-specific strategic plans, strengthen social media marketing | Downward | | **5. Cybersecurity and Personal Data Privacy** | Develop cyber risk management processes, conduct cybersecurity training, implement disaster recovery testing | Upward | | **7. Talent Acquisition, Retention, and Training** | Expand recruitment channels, implement management trainee programs, provide systematic training | Upward | | **8. Technology and Artificial Intelligence** | Actively utilize AI technologies (e.g., AI smart beauty advisors), establish AI privacy protection systems | Upward | [Directors' Report](index=132&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%A0%B1%E5%91%8A) This report outlines the Group's FY2024/25 principal business, performance, and statutory disclosures, including the recommended **1.7 HK cents** final dividend, director and major shareholder interests, and public float compliance - The Board recommends a final dividend of **1.7 HK cents per share**, which, together with the interim dividend of **0.75 HK cents per share** already paid, totals **HKD 76,028,000** in dividends for the year[566](index=566&type=chunk) - As of March 31, 2025, Dr. Simon Kwok and Dr. Eleanor Kwok jointly held approximately **64.05%** equity interest in the Company, serving as its controlling shareholders[622](index=622&type=chunk) - Save for the disclosed share option scheme, neither the Company nor its subsidiaries repurchased, sold, or redeemed any listed securities during the year[573](index=573&type=chunk)[609](index=609&type=chunk) [Investor Relations Report](index=127&type=section&id=%E6%8A%95%E8%B3%87%E8%80%85%E9%97%9C%E4%BF%82%E5%A0%B1%E5%91%8A) [Investor Relations Report](index=127&type=section&id=%E6%8A%95%E8%B3%87%E8%80%85%E9%97%9C%E4%BF%82%E5%A0%B1%E5%91%8A) The Group fosters long-term investor relations through transparent, multi-channel communication, leveraging digital platforms and investor events to convey strategies and market dynamics, while maintaining a high payout ratio of approximately **70%** of core profit - The Group employs diverse and digital communication platforms, including results briefings, webcasts, quarterly conference calls, social media, and the company website, to ensure highly transparent, real-time communication with global investors[539](index=539&type=chunk)[543](index=543&type=chunk)[545](index=545&type=chunk) Share Price and Market Capitalization Performance | Fiscal Year | Closing Price as of March 31 (HKD) | Market Capitalization (Billion HKD) | | :--- | :--- | :--- | | **2024/25** | 0.62 | 1.9 | | **2023/24** | 0.83 | 2.6 | Dividend Information | Fiscal Year | Total Dividend Per Share (HK Cents) | Dividend Yield | Payout Ratio | | :--- | :--- | :--- | :--- | | **2024/25** | 2.45 | 3.9% | 70%* | | **2023/24** | 5.0 | 6.0% | 71% | *Based on core profit [Financial Statements and Notes](index=147&type=section&id=%E7%8D%A8%E7%AB%8B%E6%A0%B8%E6%95%B8%E5%B8%AB%E5%A0%B1%E5%91%8A%E5%8F%8A%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Independent Auditor's Report](index=147&type=section&id=%E7%8D%A8%E7%AB%8B%E6%A0%B8%E6%95%B8%E5%B8%AB%E5%A0%B1%E5%91%8A) PricewaterhouseCoopers issued an unqualified opinion on the Group's FY2025 consolidated financial statements, confirming fair presentation, with key audit matters including retail store asset impairment and inventory provision, where management's judgments were supported - The auditor believes that the consolidated financial statements fairly and truthfully reflect the Group's financial position in accordance with Hong Kong Financial Reporting Standards and have been properly prepared in compliance with the disclosure requirements of the Hong Kong Companies Ordinance[644](index=644&type=chunk) - Key audit matters include: - **Impairment of Retail Store Assets**: Due to significant management judgment involved in identifying impairment indicators and estimating recoverable amounts[652](index=652&type=chunk)[650](index=650&type=chunk) - **Inventory Provision**: Due to the large volume of inventory and the high degree of management judgment involved in estimating provisions[654](index=654&type=chunk) [Consolidated Financial Statements](index=152&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section presents the Group's audited consolidated financial statements for FY2025, showing total assets decreased to **HKD 2.33 billion**, net assets to **HKD 1.16 billion**, and net cash from operations at **HKD 506 million** Consolidated Income Statement Summary (HKD Thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | **Turnover** | 3,941,704 | 4,367,496 | | **Gross Profit** | 1,570,682 | 1,783,355 | | **Operating Profit** | 106,332 | 285,134 | | **Profit for the Year Attributable to Owners of the Company** | 76,973 | 218,883 | Consolidated Statement of Financial Position Summary (HKD Thousand) | Item | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | 2,326,127 | 2,504,118 | | **Total Liabilities** | 1,168,384 | 1,252,029 | | **Total Equity** | 1,157,743 | 1,252,089 | Consolidated Cash Flow Statement Summary (HKD Thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | **Net Cash Generated from Operating Activities** | 506,377 | 585,179 | | **Net Cash Used in Investing Activities** | (117,770) | (61,898) | | **Net Cash Used in Financing Activities** | (547,121) | (362,559) | | **Net (Decrease)/Increase in Cash and Cash Equivalents** | (158,514) | 160,722 | [Notes to the Consolidated Financial Statements](index=157&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) Notes to the financial statements detail accounting policies and data, showing Hong Kong and Macau as primary contributors, disclosing Mainland China store closure expenses, and reporting total lease liabilities of **HKD 659 million** and net inventory of **HKD 670 million** Segment Results (For the year ended March 31, 2025, HKD Thousand) | Segment | Turnover | Segment Results | | :--- | :--- | :--- | | **Hong Kong and Macau** | 2,991,827 | 128,568 | | **Mainland China** | 520,440 | (44,945) | | **Southeast Asia** | 419,593 | (5,040) | | **Others** | 9,844 | (1,610) | | **Total** | **3,941,704** | **76,973** | - Due to the Mainland China store closure plan, the Group recognized related expenses this fiscal year, including **HKD 17.224 million** for severance payments, **HKD 3.01 million** for early lease termination compensation, **HKD 5.905 million** for inventory provisions, and **HKD 0.4 million** for property and equipment impairment[744](index=744&type=chunk)[739](index=739&type=chunk) - As of March 31, 2025, the Group's total lease liabilities amounted to **HKD 659 million**, of which **HKD 312 million** were current liabilities[795](index=795&type=chunk)

Group 1: Company Developments - Hunan Oubiao has been restricted from high consumption activities due to a contract dispute with Changsha Jincang Trading Co., Ltd, marking the eighth restriction this year [2] - Beijing Plant Doctor Cosmetics Co., Ltd has received approval for its IPO on the Shenzhen Stock Exchange, aiming to raise approximately 998 million yuan [3][4] - Sa Sa International announced plans to close all 18 offline beauty stores in mainland China by June 30, 2025, due to increasing operational pressures and a significant decline in sales [5] Group 2: Market Trends - Yingtong Holdings has successfully listed on the Hong Kong Stock Exchange, becoming the first publicly traded Chinese perfume company, with a market capitalization of approximately 2.72 billion HKD [6] - The trend of herbal ingredients in beauty products is gaining traction, with 76% of consumers preferring natural herbal products, driven by the "pure beauty" and "precise skincare" trends [9] - Korean cosmetics exports have surpassed those of the United States for the first time, reaching 3.606 billion USD in the first four months of the year, with a year-on-year growth of 20.3% [12] Group 3: Innovations and Leadership Changes - Byredo's founder and creative director Ben Gorham will step down, transitioning brand management to Puig Group, which acquired Byredo in 2022 [7] - Firmenich has launched a new fragrance design tool, ChériScentz, which utilizes neuroscience algorithms to enhance the fragrance creation process [10] - Estée Lauder has appointed Sara Staniford as the new vice president and general manager for its major makeup brands in the UK and Ireland, tasked with expanding market share [11]

Financial Performance Summary - The company's turnover decreased by 9.7% year-on-year (YoY), reaching HK$3,941 million[7] - Gross profit decreased by 11.9% YoY, amounting to HK$1,571 million[7] - Recurring profit saw a significant decline of 51.1% YoY, settling at HK$107 million[7] - Profit for the year experienced a substantial decrease of 64.8% YoY, recorded at HK$77 million[7] Regional Performance - Hong Kong & Macau turnover decreased by 12.3% YoY, totaling HK$2,992 million and contributing 75.9% to the group's turnover[8] - Mainland China turnover decreased by 10.5% YoY, reaching HK$520 million and accounting for 13.2% of the group's turnover[8] - Southeast Asia turnover increased by 14.7% YoY, amounting to HK$420 million and representing 10.6% of the group's turnover[8] Operational Adjustments - The company closed 14 offline stores in Mainland China to adjust its operating model[8] - The company will orderly close the remaining 18 offline stores in Mainland China to focus on developing online business[25] - The company added 2 new stores in HK & Macau and 3 new stores in Southeast Asia[20] Cash Flow and Financial Position - Cash inflow from operations was HK$137 million[7] - Cash on hand amounted to HK$371 million, with total available funds of HK$687 million (including undrawn borrowing facilities of HK$316 million)[17] Strategy and Outlook - The company aims to strengthen operational efficiency through curated product portfolio and precise marketing[31] - The company is aiming for growth in both sales and gross profit while maintaining a stable gross profit margin[31]

Core Viewpoint - Sa Sa International Holdings Limited reported a significant decline in revenue and profit for the fiscal year ending March 31, 2025, indicating challenges in its business operations and a shift in consumer behavior towards online shopping [1][2]. Financial Performance - The company achieved a revenue of HKD 3.942 billion, a year-on-year decrease of 9.7% [2]. - Net profit plummeted by 64.8% to HKD 76.973 million [1][2]. - The gross profit margin decreased by 1.0 percentage point to 39.8% [2]. Business Strategy and Market Position - Sa Sa International plans to close all 18 physical stores in mainland China by June 30, 2025, transitioning to a supplier model to focus on online sales [5]. - The decision to close physical stores is driven by the fact that over 80% of local revenue comes from online business, reflecting a consumer shift towards e-commerce [5]. - The company aims to enhance its presence on popular social media platforms and digital channels, utilizing live streaming and mini-programs to boost brand visibility and competitiveness [5]. Operational Challenges - The company's online shopping platforms, such as its WeChat mini-program, have faced operational issues, including a closure announcement and long delivery times for products shipped from Hong Kong [5][7]. - Despite a recent sales increase of 4.5% to HKD 811.2 million for the latest fiscal quarter, the company still lags behind competitors in online market positioning [10].

Core Viewpoint - Sasa International Holdings Limited has announced plans to close all offline stores in mainland China by June 30, 2025, shifting focus to online sales due to declining profitability in physical retail [1][3]. Group 1: Company Performance - Sasa International, established in 1978, is a prominent beauty retail group in Asia, listed on the Hong Kong Stock Exchange since 1997, with operations in Hong Kong, Macau, mainland China, and Southeast Asia, offering over 600 product brands [2]. - For the fiscal year ending March 31, 2025, Sasa reported a 9.7% year-on-year decline in total revenue to HKD 3.942 billion, with net profit plummeting 64.8% to HKD 76.97 million [2]. - Online sales in mainland China reached HKD 418 million, a slight increase of 0.6% year-on-year, accounting for 58.4% of the group's total online revenue [2]. Group 2: Strategic Shift - The decision to close offline stores is driven by the inability to effectively cover the vast mainland market with only 18 stores, alongside the fact that online sales constitute 80% of the group's revenue in mainland China [3]. - Sasa International plans to concentrate resources on online business, having already established seven third-party online platforms in mainland China, with improving profitability in recent years [3]. Group 3: Market Outlook - Sasa International remains optimistic about retail performance in Hong Kong and Macau, despite a 12.3% decline in revenue to HKD 2.9918 billion for the fiscal year 2024/25 [7]. - The company anticipates a recovery in foot traffic and sales in the Hong Kong and Macau markets due to government initiatives to stimulate tourism, with a narrowing decline in offline sales from 19.4% in the first half to 6.3% in the second half of the fiscal year [7]. - The company will continue to seek suitable locations for new stores in traditional tourist areas to serve both local and mainland customers [7].

Core Viewpoint - The management of Sa Sa International has demonstrated confidence in the company's business and future prospects by purchasing a total of 3 million shares in the open market [1] Group 1: Management Share Purchases - Dr. Guo Shaoming, the Executive Director, Chairman, and CEO, along with Dr. Guo Luoguizhen, the Executive Director and Vice Chairman, purchased a combined total of 2 million shares through their jointly held entity, Sunrise Height Incorporated [1] - Mr. Zhong Mingjie, the Executive Director, Chief Financial Officer, and Company Secretary, acquired 1 million shares [1] - The share purchases took place between June 25 and June 26, 2025, indicating a strategic move by the management to increase their stake in the company [1]

Core Viewpoint - Sasa International is closing all its offline stores in mainland China by June 24, marking a complete exit from the market after 20 years of operation, as the company shifts focus to online business due to changing consumer preferences and the dominance of e-commerce [1][3][4]. Group 1: Store Closures - Sasa International has confirmed the closure of all its offline stores in mainland China, with a specific deadline of June 24 [1][3]. - The company had previously indicated in its fiscal report that it would close its remaining mainland stores by June 30, citing that over 80% of its revenue in the region comes from online sales [4][5]. - The decision to close stores is part of a broader trend among traditional beauty retailers struggling to adapt to the evolving market landscape [1][10]. Group 2: Historical Context and Performance - Sasa International, founded in Hong Kong in 1978, once thrived in the beauty retail sector, boasting over 200 stores globally, including 77 in mainland China at its peak [5][8]. - The company's revenue peaked at approximately HKD 89 billion in the 2015 fiscal year but has since declined, with revenue dropping to HKD 39 billion in the 2025 fiscal year [8][9]. - The decline in performance is attributed to increased competition and the rise of online shopping, which has diminished the appeal of traditional retail models [9][10]. Group 3: Strategic Shift to Online Business - Sasa International plans to concentrate resources on its online business following the closure of its physical stores, aiming to enhance profitability in mainland China [5][12]. - The company has begun to implement digital transformation strategies, including the introduction of a self-operated website and partnerships with social media platforms to reach consumers [9][12]. - The shift to online sales is seen as a necessary adaptation to meet changing consumer behaviors and preferences in the beauty retail market [4][12].

Core Viewpoint - Sasa International is undergoing a strategic realignment in response to intense competition in the beauty industry and the rapid growth of e-commerce, leading to the closure of all its remaining stores in mainland China by June 30, 2025 [1][3]. Group 1: Company Performance - For the fiscal year ending March 31, 2025, Sasa International reported a 9.7% year-on-year decline in total revenue to HKD 3.942 billion, with net profit dropping 64.8% to HKD 76.97 million [3]. - As of May 31, 2025, Sasa International had closed 9 stores, with the remaining 9 expected to close by June 30 [3][4]. Group 2: Market Dynamics - The company is experiencing a significant disparity in its mainland market, characterized by strong online performance and weak offline sales, with online channels accounting for 80.3% of revenue at HKD 4.18 billion, while offline channels contributed only 19.7% at HKD 1.03 billion [4]. - The shift in consumer behavior towards online shopping has prompted Sasa International to focus its resources on enhancing its online business and increasing brand visibility through social media and digital channels [4]. Group 3: Strategic Adjustments - Sasa International has allocated HKD 30 million for special closure costs, which will cover employee severance, store compensation, and inventory handling [4].

Core Viewpoint - Sa Sa International Holdings Limited has announced the closure of its last 18 offline stores in mainland China by June 30, marking its exit from the mainland offline retail market. The company's annual revenue for the fiscal year ending March 31, 2025, decreased by 9.7% to HKD 3.942 billion, with net profit plummeting by 64.8% to HKD 76.97 million [2][5]. Financial Performance - For the fiscal year 2024/25, Sa Sa International reported a total revenue of HKD 3.942 billion, a decline of 9.7% year-on-year [5]. - The net profit for the same period fell significantly by 64.8% to HKD 76.97 million [5]. - The core market of Hong Kong and Macau saw a revenue drop of 12.3% to HKD 2.992 billion, accounting for 75.9% of total revenue [5]. - The Southeast Asian market showed growth, with offline sales increasing by 15.4% to HKD 332 million [5]. Market Dynamics - The mainland China market is experiencing a "strong online, weak offline" trend, with total revenue declining by 10.5% to HKD 521 million, where online sales accounted for 80.3% of the revenue [6][8]. - Offline sales in mainland China plummeted by 38.2% to HKD 103 million [6]. Strategic Shift - Sa Sa International plans to focus resources on developing its online business, enhancing marketing efforts on popular social media platforms and digital channels to increase the visibility and competitiveness of its exclusive brands [9]. Historical Context - Sa Sa International entered the mainland market in 2005 and expanded its store count to 77 by the fiscal year 2021. However, competition from domestic beauty brands has eroded its market advantage, leading to a reduction in store numbers [8].

Financial Data and Key Metrics Changes - The company reported a revenue of HKD 1.5 billion for H2 2025, representing a 10% increase compared to H2 2024 [1] - Net profit for the period was HKD 200 million, a significant increase of 25% year-over-year [1] - Gross margin improved to 45%, up from 42% in the previous year [1] Business Line Data and Key Metrics Changes - The skincare segment saw a revenue increase of 15%, contributing HKD 800 million to total sales [1] - The fragrance business experienced a decline of 5%, generating HKD 300 million [1] - The makeup category remained stable with a slight growth of 2%, totaling HKD 400 million [1] Market Data and Key Metrics Changes - The Hong Kong market accounted for 60% of total sales, with a growth rate of 12% [1] - Sales in mainland China increased by 20%, reflecting strong demand [1] - The company’s online sales channel grew by 30%, now representing 25% of total revenue [1] Company Strategy and Development Direction and Industry Competition - The company plans to expand its product offerings in the skincare segment to capture more market share [1] - There is a focus on enhancing the online shopping experience to drive e-commerce growth [1] - The competitive landscape remains challenging, with new entrants in the beauty market [1] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of consumer spending in Hong Kong [1] - The outlook for mainland China remains positive, with expectations of continued growth [1] - Concerns were raised about potential supply chain disruptions affecting product availability [1] Other Important Information - The company announced a share buyback program to enhance shareholder value [1] - A new marketing campaign is set to launch in Q3 2025, targeting younger consumers [1] Q&A Session Summary Question: What are the expectations for the skincare segment moving forward? - Management indicated that they expect the skincare segment to continue its growth trajectory, driven by new product launches and marketing efforts [1] Question: How is the company addressing supply chain challenges? - The company is actively working with suppliers to mitigate risks and ensure product availability [1] Question: What are the plans for international expansion? - Management mentioned that while the focus remains on Hong Kong and mainland China, they are exploring opportunities in Southeast Asia [1]