OSIM International (OSIM) reported a strong set of 4Q12 results which were within our expectations. For FY12, revenue and PATMI of S$601.7m (+8.7%) and S$86.9m (+25.9%) formed 99.7% and 100.9% of our projections, respectively. A positive surprise in the form of a special dividend of 1 S cent/share was declared, on top of a final dividend of 1 S cent/share. This brings total FY12 DPS to 6 S cents, or a yield of 3.3%. Looking ahead, OSIM’s focus would remain on driving product innovation and improving productivity. We raise our FY13 EPS forecast by 2.2% on higher margin assumptions, which in turn bumps up our fair value estimate from S$2.14 to S$2.19, still pegged to 16.4x FY13F EPS. Maintain BUY.
4Q12 results within our expectations
OSIM International Ltd (OSIM) reported a 32.5% YoY jump in its 4Q12 PATMI to S$22.6m on the back of a 8.3% YoY increase in revenue to S$154.6m. Results were within our expectations. The strong bottomline performance was driven by an improvement in operating margin, higher contribution from associated companies and a lower effective tax rate. Sequentially, revenue and PATMI rose 8.6% and 15.4%, respectively. For FY12, revenue climbed 8.7% to S$601.7m and was only 0.3% below our estimate (0.9% below Bloomberg consensus). PATMI of S$86.9m represented a growth of 25.9%, which constituted 100.9% of our FY12 projections (101.5% of consensus).
More special dividends
OSIM declared a final dividend of 1 S cent/share, in line with our expectations. However, a positive surprise came from an additional special dividend of 1 S cent/share, bringing total FY12 DPS to 6 S cents (this includes 2 S cents/share of special dividends). This represents a payout ratio of 50.6% and translates into a yield of 3.3%.
Emphasis remains on innovation and productivity for 2013
Management continued its product innovation drive by launching its new uAngel sofa in Hong Kong and Malaysia, which is able to transform into a full-body massage chair at the touch of a button. This is targeted mainly at young working female adults. In terms of expansion plans, OSIM’s focus would be on growing its sales and profitability per store rather than aggressively expanding its store count.
Maintain BUY with 25% potential total returns
We raise our FY13 EPS forecast by 2.2% as we incorporate higher margin assumptions in our model, and also introduce our FY14 projections. Based on our estimates, OSIM is poised to deliver EPS CAGR of 11.9% from FY12-14F, underpinned by its growing revenue base, better product mix and improving operational efficiencies. Maintain BUY, with a higher fair value estimate of S$2.19 (previously S$2.14), still pegged to 16.4x FY13F EPS.
OSIM International Ltd (OSIM) reported a 32.5% YoY jump in its 4Q12 PATMI to S$22.6m on the back of a 8.3% YoY increase in revenue to S$154.6m. Results were within our expectations. The strong bottomline performance was driven by an improvement in operating margin, higher contribution from associated companies and a lower effective tax rate. Sequentially, revenue and PATMI rose 8.6% and 15.4%, respectively. For FY12, revenue climbed 8.7% to S$601.7m and was only 0.3% below our estimate (0.9% below Bloomberg consensus). PATMI of S$86.9m represented a growth of 25.9%, which constituted 100.9% of our FY12 projections (101.5% of consensus).
More special dividends
OSIM declared a final dividend of 1 S cent/share, in line with our expectations. However, a positive surprise came from an additional special dividend of 1 S cent/share, bringing total FY12 DPS to 6 S cents (this includes 2 S cents/share of special dividends). This represents a payout ratio of 50.6% and translates into a yield of 3.3%.
Emphasis remains on innovation and productivity for 2013
Management continued its product innovation drive by launching its new uAngel sofa in Hong Kong and Malaysia, which is able to transform into a full-body massage chair at the touch of a button. This is targeted mainly at young working female adults. In terms of expansion plans, OSIM’s focus would be on growing its sales and profitability per store rather than aggressively expanding its store count.
Maintain BUY with 25% potential total returns
We raise our FY13 EPS forecast by 2.2% as we incorporate higher margin assumptions in our model, and also introduce our FY14 projections. Based on our estimates, OSIM is poised to deliver EPS CAGR of 11.9% from FY12-14F, underpinned by its growing revenue base, better product mix and improving operational efficiencies. Maintain BUY, with a higher fair value estimate of S$2.19 (previously S$2.14), still pegged to 16.4x FY13F EPS.
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