＜Research＞JPM: Launch of Sam's Club Direct Delivery Service to HK Has Manageable Impact on HK Retail Sales

　　JPMorgan noted in a report that Sam's Club, a subsidiary of Walmart (WMT.US) , launched a direct delivery service from its Shenzhen shop to Hong Kong, which aroused investors' concern.

　　While Sam's Club products are about one-third cheaper than those in Hong Kong according to JPM's survey, they account for less than 1% of Hong Kong's retail sales, so the impact is still considered manageable. However, the broker remained cautious on Hong Kong's retail sales, forecasting a 5% YoY decline in sales for the full year and a 6% YoY drop excluding restaurants.

　　According to JPM, Hong Kong's retail sales are confronted with four unfavourable factors, namely increased outbound travel, further penetration of e-commerce, lower-than-expected spending by inbound tourists and the exchange rate. The drag was mainly on consumer spending in the staples category, while the impact on discretionary spending was less significant. The broker expected Hong Kong's spending on staples and discretionary items to fall 9% and 2% YoY this year respectively.

　　JPM reiterated that the market has overreacted to the negative impact on LINK REIT (00823.HK) +0.350 (+1.167%) Short selling $96.03M; Ratio 26.955% , but remained wary of WHARF REIC (01997.HK) -0.050 (-0.240%) Short selling $14.33M; Ratio 20.760% , and continued to advise investors to long LINK and short WHARF. LINK's share price has outperformed WHARF by 13% in the past month.

　　(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-06-27 16:25.) (Real-time Streaming US Stocks Quote; Except All OTC quotes are at least 15 minutes delayed.)

　　AAStocks Financial News