Osim

Osim: Kim Eng initiates coverage with Buy Call and $2.02 TP.
House believes likelihood of impending M&As has been a price overhang and given negative experience with OSIM’s purchase of Brookstone. However, house beg to differ, adding that OSIM has a much stronger balance sheet and profit base to absorb new businesses, lowering execution risk substantially and is the cheapest high-end brand-owner in the region.

Add that OSIM is in pole position to become the king of lifestyle brands in Asia, a crown still up for grabs. It is already the undisputed brand leader for massage chairs. As the master franchisee of GNC, it has pushed this health and nutrition brand into a dominant market position in SG and Msia, and is replicating this model in China through its own RichLife brand. New acquisition TWG Tea is poised to revolutionize the way Asians perceive tea drinking.