Osim

Osim: After raising its stake in TWG Tea to 53.7% for an additional $9m (US$7.2m) on 16 Oct 2013, StanChart believe TWG’s potential is significant. OSIM’s 53.7% stake in TWG and 60% stake in the North Asia JV may be worth a combined $204m, or 13% of its market cap. House believe the market is overlooking the growth prospects of TWG, which, in the past six years, has become one of Asia’s leading luxury-tea brands. TWG may more than double its store network and generate 18% sales CAGR over 2013-22E. Stanchart like OSIM for its strong brand, strong profitability and attractive valuations (15.1x 2014E PER and 3.0% yield). House reiterate OSIM as its ASEAN Emerging Companies top pick, and have an OUTPERFORM rating on the stock with TP $2.83.