Brokers' Take

Osim International, April 22 closing : $1.28

23 April 2004
The Business Times

G K Goh Research, April 22

EBITDA margin was affected by higher cost of goods sold, from a strong yen (60 per cent of its purchases) vis-a-vis the currencies of Osim's major markets.

However, the 2.8 per cent year-on-year erosion in Ebitda margin in Q104 was less severe than the 5.4 per cent experienced in Q403.

Pre-tax profit before associates was up 19 per cent against the 31 per cent turnover growth. The bottomline was lifted by strong associate contribution. We expect China's contribution to turnover to reach 20 per cent by FY05, from 12 per cent in FY03, and Global Franchise's contribution to double to 10 per cent.

Osim has moved up the price scale again with the launch of the iSymphony AV massage chair in Hong Kong and Singapore. Gross profit margin for this is even higher than the 50-55 per cent range for massage chairs.

We will finetune our forecasts to factor in slightly higher turnover growth.

Osim, a consistent performer that has won the support of institutional investors, will continue to enjoy premium pricing. Maintain BUY.

Compiled by VEN SREENIVASAN