OSIM

OSIM: Osim records its 19 consecutive quarter of y/y profit growth for 3Q13, as net profit surged 34% to $21.2m on the back of a revenue improvement of 7% to $153m. The growth in top line was driven by higher consumer demand for its products, while the bottom line was due to increased productivity and better product mix. Although on a q/q basis, earnings declined 13% while revenue was down 7.6%, this came largely on the back of its seasonally weakest quarter. Growth was attributed to good sales on new massage chairs launched this year, the entry-level uAngel, as well as the super-premium uInfinity. According to management, both products continue to show good momentum across all markets. Geographically, other than Hong Kong which was down slightly, all other markets showed growth, in particular China. Going forward as OSIM gains traction from its advertising campaign in China, together with better overall retail sentiments, Maybank-KE expect China to show further sale improvements from here. In addition, OSIM's growth should be supported after the consolidation of TWG Tea after increasing its stake to 53.7%. OSIM declared an interim dividend of 1¢ per share, bringing 9M13 total dividends to 4¢. Several brokers have raised its earnings estimates on the back of higher sales volumes and TWG consolidation. Market watchers expect more upgrades to come, which may potentially drive an upward re-rating on the counter over the longer term. Latest broker ratings Latest brokers ratings as follows: Maybank-KE maintains Buy with $2.78 TP (from $2.34) Credit Suisse maintains Outperform with $2.50 TP (from $2.50)