(Bloomberg) -- Hong Kong’s biggest cosmetics chain, Sa Sa International Holdings Ltd., is planning to further expand in mainland China and Southeast Asia, to help make up for the sluggish post-Covid recovery of its home market.

Sales in Hong Kong and Macau may remain around 70% of pre-Covid levels even after three years, Sa Sa Chief Financial Officer Danny Ho said on Bloomberg TV Friday.

While Chinese visitors — the biggest source of Hong Kong’s tourism — have started to return and spend in the city, numbers are still low, Ho said. “While the China economy is the way it is, that will drag on.”

Once a bustling tourist shopping destination, Hong Kong’s retail landscape has undergone a sea change after years of political turmoil and Covid closure. The city’s tourism is facing increasing pressure from the rise of rivals including tax-free island Hainan and casino hub Macau, while millions of local residents are flocking to neighboring Shenzhen on a weekly basis for shopping and entertainment. 

Sa Sa, Hong Kong’s biggest cosmetics chain, reported lower-than-expected earnings for the year ended March 31, prompting Citigroup Inc. to revise down its profit estimates for the next two years. While profit jumped from the year before, it was still less than half of the 2019 level. 

--With assistance from Yvonne Man, Joanne Wong and Annabelle Droulers.

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