OSIM International (OSIM) reported a 13.2% YoY jump in its 1Q13 PATMI to S$25.1m despite a mild 0.4% increase in revenue to S$150.6m. This formed 25.9% and 22.7% of our FY13 forecasts, respectively. Results were within our expectations as we foresee further contribution from its recently launched uAngel Sofa-Tranzformer and upcoming new high-end massage chair launch (around Jul period). We expect OSIM to continue its strategic drive of launching new innovative products with different price points to cater to a broader group of target consumers. OSIM also declared an interim dividend of 1 S cent/share in 1Q13, similar to 1Q12. We make some minor adjustments after incorporating this latest set of results in our model. Our fair value estimate is raised marginally from S$2.19 to S$2.21, still pegged to 16.4x FY13F EPS. Maintain BUY.
1Q13 results in line; further contribution from uAngel to come
OSIM International Ltd (OSIM) started FY13 on a positive note, recording a 13.2% YoY jump in its 1Q13 PATMI to S$25.1m despite a mild 0.4% increase in revenue to S$150.6m. Results were in line with our expectations, with PATMI and revenue forming 25.9% and 22.7% of our FY13 forecasts, respectively. During the quarter, although sales from Taiwan experienced a decline, this was mitigated by growth in its other core markets, namely China, Hong Kong, Malaysia and Singapore. We expect OSIM’s new uAngel Sofa-Tranzformer to contribute more significantly from 2Q13, as it was only launched in Taiwan, Singapore and China in late 1Q13 (first launch was in Hong Kong and Malaysia at the beginning of the year). According to management, the uAngel was well-received by consumers, allowing the group to penetrate a new target segment as 70-80% of purchases were made by first time buyers of OSIM’s massage chairs.
Optimistic on new product innovation drive
Besides the uAngel, OSIM intends to launch a new high-end massage chair around Jul this year, with a selling price of ~S$6,000 and to be promoted by international artiste Andy Lau. Looking ahead, we expect OSIM to continue its strategic drive of launching new innovative products with different price points to cater to a broader group of target consumers.
Healthy dividend trend continues
OSIM also declared an interim dividend of 1 S cent/share, similar to the corresponding period last year. This will be payable on 3 Jul 2013. We forecast FY13 DPS of 6 S cents, which translates into a yield of 3.0%.
Maintain BUY
We make some minor adjustments after incorporating this latest set of results in our model. Our fair value estimate is raised marginally from S$2.19 to S$2.21, still pegged to 16.4x FY13F EPS. Maintain BUY.
OSIM International Ltd (OSIM) started FY13 on a positive note, recording a 13.2% YoY jump in its 1Q13 PATMI to S$25.1m despite a mild 0.4% increase in revenue to S$150.6m. Results were in line with our expectations, with PATMI and revenue forming 25.9% and 22.7% of our FY13 forecasts, respectively. During the quarter, although sales from Taiwan experienced a decline, this was mitigated by growth in its other core markets, namely China, Hong Kong, Malaysia and Singapore. We expect OSIM’s new uAngel Sofa-Tranzformer to contribute more significantly from 2Q13, as it was only launched in Taiwan, Singapore and China in late 1Q13 (first launch was in Hong Kong and Malaysia at the beginning of the year). According to management, the uAngel was well-received by consumers, allowing the group to penetrate a new target segment as 70-80% of purchases were made by first time buyers of OSIM’s massage chairs.
Optimistic on new product innovation drive
Besides the uAngel, OSIM intends to launch a new high-end massage chair around Jul this year, with a selling price of ~S$6,000 and to be promoted by international artiste Andy Lau. Looking ahead, we expect OSIM to continue its strategic drive of launching new innovative products with different price points to cater to a broader group of target consumers.
Healthy dividend trend continues
OSIM also declared an interim dividend of 1 S cent/share, similar to the corresponding period last year. This will be payable on 3 Jul 2013. We forecast FY13 DPS of 6 S cents, which translates into a yield of 3.0%.
Maintain BUY
We make some minor adjustments after incorporating this latest set of results in our model. Our fair value estimate is raised marginally from S$2.19 to S$2.21, still pegged to 16.4x FY13F EPS. Maintain BUY.
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