Osim

Osim: Although 1H13 revenue and net profit growth of 3.7% and 14.9%, respectively, are below StanChart's 2013 forecast of 10% top-line and 15% bottom-line growth, house believe OSIM could still meet its forecast. StanChart expect revenue growth to pick up in 2H13, particularly in 4Q13 as the launch of uInfinity in Singapore, Taiwan, Malaysia and China throughout 3Q13 to drive revenue growth in 2H13. The recent launch of uInfinity in Hong Kong has delivered good traction, according to management during its 2Q13 results briefing. OSIM continues to generate robust cash flow, with 2Q13 operating cash flow growing 16% y/y to $30m, while free cash flow grew 18% y/y to $28m. OSIM ended 2Q13 with net cash of $119m (including fixed income investments and $118m in convertible bonds). Its 38.4% ROCE is the highest among massage-chair peers and ASEAN retailers. StanChart has an OUTPERFORM rating with TP of $2.65.