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AS fears over a slowing China continue to play out in lower stock valuations all around, a more nuanced picture is emerging.
The power of the mainland Chinese consumer is still growing, though they are not going to Hong Kong any more.
The latest stock market casualty is Hong Kong-listed Sa Sa International Holdings, a cosmetics brand supermarket with a big presence in the territory.
Last Thursday, Sa Sa warned that its profit for the six months ended Sep 30, 2015 is expected to decline by over 50 per cent due to significant drops in sales and gross profit. It said from July to September, stores in Hong Kong were recording double-digit sales declines.
In other markets like mainland China, Malaysia, Taiwan and Singapore, retail and wholesale revenue also dropped around 9 per cent, it said.
Sa Sa shares promptly plunged 14 per cent last Friday.
In a fast changing cosmetics market, the woes of Sa Sa might also be company-specific. Yet its problems are also faced by other Hong Kong retailers.
The appreciating US-linked Hong Kong dollar, travel restrictions for Shenzhen residents, and protests against mainland Chinese seem to have scared tourists off.
Compared to a year ago, latest retail sales numbers in Hong Kong for August show widespread declines across many spending categories, notably jewellery, watches, clocks, wearing apparel, and Chinese drugs and herbs. Same store sales growth in Hong Kong at gold and jewellery giant Chow Tai Fook, for example, was down 13 per cent in Hong Kong from July to September.
Is it all doom and gloom for consumer sentiment in Asia?
The latest numbers at Chow Tai Fook, for example, show that consumers are spending far less on gem-set jewellery but are still hankering after gold. Chow Tai Fook's Hong Kong stores might be recording double-digit sales declines, but sales in its China stores are still growing.
Consumer spending in China remains robust, with September retail sales still growing by double digits across many categories compared to a year ago, a tad higher than August growth.
Apple is still selling plenty of smartphones there. China Mobile added 58 million new 4G customers from July to September. Meanwhile, e-commerce retail sales and box office revenues are skyrocketing.
Tenant sales are up by double digits in the third quarter at CapitaLand Retail China Trust, which gets a significant chunk of revenue from malls in Beijing.
All this should be reassuring to investors looking at opportunities in the mainland. After all, if net earnings can keep growing at double digit rates, an earnings multiple in the mid-teens can be a bargain.
Looking ahead, the grim retail sentiment in Hong Kong looks set to continue to affect traditional Chinese medicine retailer Eu Yan Sang, which has substantial operations there and saw a decline in business from Chinese parallel traders. However, the company has placed more emphasis on e-commerce, which can reach out to the Chinese in a significant way.
The e-commerce segment could also be one to watch for mainboard-listed OSIM International, which reports results on Tuesday and has also been affected by negative China sentiment.
In e-commerce, it is easy to grow sales by offering discounts and sacrificing margins, so a balance has to be struck, OSIM founder Ron Sim pointed out in a previous results briefing.
Ultimately, the Chinese consumer is still spending. They might save the world yet.