Thursday, August 23, 2012
OSIM: DMG maintains Buy with $1.75 TP. House We recently hosted OSIM for a roadshow to Malaysia. Note that their product pipeline is set for next year and we should expect two new chairs, which should drive earnings momentum in FY13/14. Some investors were concerned over the impact of a slowdown in China but management appears confident impact will be minimal as chair penetration rates there are still very low at 1%. In terms of combating copycats in China, OSIM stands out by targeting the premium end of the segment which value quality, durability and after-sales service. House have also been busy scouting out the showrooms of OSIM, Ogawa and Otto and found that OSIM offers the most extensive range of products among its peers in terms of price points as well as choices of colours. Finally note that mgt has its heart still set on getting 55%-owned Brookstone re-listed in the US by 2014, which could be a kicker to earnings.