Osim

Osim: DMG maintains Buy with $1.75 TP. House We hosted OSIM for its ASEAN & Hong Kong Corporate Day early this wk and the Co. received good interest from HK based fund managers. Key highlights during one of the Group meetings include: 1) OSIM has not seen a slowdown in its sales growth in current environment, noting that its 2Q12 sales grew by 12% yoy to $155m; 2) In fact, management commented that sales of massage chair were surprisingly resilient during 2008-09 downturn, which was the contrary to investors’ perceptions. Mgt explained that consumer demand stayed relatively stable for purchases between $5,000-S$6,000 per item during the period, while smaller items of around $200 per unit were more affected; 3) Looking into 2013, mgt is excited about the launch of its two new massage chairs, which are priced for mid-high end segments. The first will be launched in 1Q13, with the other in 2H13. In addition, mgnt expects to make bigger inroads in US; 4) For TWG, the co will continue to entrench its premium tea positioning through retail outlets at selected prime locations in Asia, as well as luxury hotels that are at least 5-stars and above and on first-business class flights. In 2013, around 2-4 stores will be opened in China and Taiwan each, and around 1-2 new stores in Hong Kong.