Osim

Osim: Registered an 18 consecutive quarters of record profit, as overall 2Q13 results came in within bullish street estimates. Net profit at $26.1m (+16% y/y, +4% q/q) brought OSIM’s 1H13 net profit to $51.6m (+15% y/y). Revenue for the quarter at $165.5m (+7% y/y, +10% q/q), which was driven mostly by sales outside of North Asia, with high consumer demand for OSIM slew of products like uDivine App, uAngel, uPhoria, uHug, uPixie, uCozy, uRelax, uPebble, uBio, uSlender and nutritional supplements like Taut, Stem C, Zhi and Liver Protector. Operating margins dipped marginally at 19.8% versus 21.0%, largely due to increases in wages and rental, mitigated by better productivity in sales per outlet . Bottom-line was also buoyed by positive contributions from associates, which rose 213% y/y to $1.5m The grp saw positive growth across its five key countries of China, Hong Kong, Taiwan, Singapore and Malaysia. Nutritional supplements subsidiary ONI Global also grew profits. Profits from associated companies was better with contributions from joint venture factory DT-OSIM and TWG Tea. For its latest uInfinity, premium massage chair, which the grp has soft launch in Hong Kong and Singapore, with an official launch slated in 3Q13, mgt has indicated that the new chair has received strong traction, depsite its S$7,000 price point (vs usual price of S$6,088 for uDivine App). Launch of a new leg massager is also on track to take place in 4Q13. CS maintains O/p with $2.20 TP Maybank-KE maintains Buy with $2.34 TP