Osim

Osim: Announced strong 4Q11 results which was in-line, albeit at the higher end of estimates. Rev at $142.7m, +7.6% and +15.4% qoq, while net profit at $17.1m, +0.8% yoy and +29.9% qoq. Result brings FY11 Rev to $553.7m, +8.8% yoy and net profit to $69.1m, +37.9% yoy. While Ebitda Margins strengthened at 20.2% vs 15.5% yoy.

Strong performance driven by sales growth from better product mix of massage chairs, massage sofas, foot massagers, head massagers, neck and shoulder massagers and nutritional supplements, while sales momentum of uDivine, uSoffa, uPapa Music Sync, uVenus, uCrown Pro, Taut, Zhi andother key products remained strong in grp’s key North & South Asia markets.

Going forward, grp remains confident of prospects and expects to continue to create higher consumer demand with the launch of new OSIM products like uDivine App, uPhoria, uSoffa Runway, uJoy, uPixie and new nutritional supplements like Taut Whitening, Zhi and Liver Protector. Aims to have a net increase of 50 OSIM outlets in China as grp continues to enjoy strong sales and with more new products being introduced, and expect mkt to contribute positively.

We note that grp fundamental’s remain strong, with grp in a net cash position of $60m (0.8c/share), and at current price, valuations appear compelling, with grp trading at 13.8x F11P/E vs historical average of 22x. Grp has proposed a div of 1c/share, bringing FY11 div to 3c/share or a 2.3% yield.

Ratings as follow:
UBS maintains Buy with $1.52 TP