Consumer Discretionary / Singapore OSIM SP Consumer Discretionary / Singapore 10 August 2015 OSIM International OSIM International Target (SGD): 1.88 Upside: 10.3% OSIM SP 7 Aug price (SGD): 1.71 Initiation: the second coming 1 Buy • Premium retailer in the healthy lifestyle segment; share price is 2 Outperform (initiation) down 40.6% since end-July 2014 3 Hold • Net profit should pick up by 15.4% and 9.8% for 2016-17E, 4 Underperform driven by new product launches and the growing tea business 5 Sell • Initiating with Outperform (2) rating and 12-month TP of SGD1.88 (13.5% above the consensus mean) How do we justify our view? ■ Catalysts likely because we are more bullish New products. OSIM launched its on its tea business. latest massage chair, the uMagic, in 2Q15, and the results have been ■ Risks encouraging, with this product The key risks to our positive call Shane Goh boosting overall revenue growth to would be: 1) a poor take-up rate for (65) 6499 6546 6.4% QoQ for 2Q15 and net profit new products, and 2) delays in store
[email protected] growth to 66.1% QoQ. In 2H15, OSIM openings. plans to release the uDiva Classic, the sequel to its existing massage sofa. ■ Investment case The uDiva Classic would have a lower The share price of OSIM, a retailer price of SGD1,999 (vs. SGD2,588 for Share price performance of premium lifestyle products such the uDiva). (SGD) (%) 2.9 105 as massage chairs and luxury tea, is down by 40.6% in the past year.