Friday, July 24, 2015


OSIM: (S$1.525) 2Q15 marks a turnaround?
The lifestyle marketer surged 7.6% to a high of $1.565 in early trading today following the release of its 2Q15 results, which saw net profit tumble 24% to $18.6m, bringing 1H15 earnings to $41.4m, meeting 48% of street's full year estimates.

Revenue slumped 12.7% y/y to $159.5m, as retail sales across OSIM's core countries in the region remained soft due to the weak environment and the latest uMagic massage chair suffered from a lack of celebrity endorsement.

EBITDA margin slipped 2.1ppt to 21.4%. hurt by startup costs for TWG Tea outlets and higher rental costs, but partially offset by lower staff costs. However, this is a significant improvement from the 15.3% bottom reached in 1Q15.

Management maintained its second interim DPS of 2¢, taking 1H15 dividend payout to 3¢.

On the outlook, OSIM remains optimistic for 2H15 with the launch of a new low-priced budget massage chair (uDiva Classic) and other upcoming planned product launches.

At the current price, OSIM is trading at 14.8x forward P/E and 2.7x P/B.

Latest broker ratings:
RHB upgraded to Buy but cuts TP to $1.78 from $2.00
Maybank-KE maintains Hold with TP of $1.75
UOB Kay Hian maintains Hold, cuts TP to $1.56 from $2.02
OCBC maintains Hold, cuts TP of $1.52 from $1.87
Credit Suisse upgraded to Neutral but cuts TP to $1.50 from $1.65

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