Monday, March 24, 2014

************** Osim: Uptrend intact.... (BUY and hold for the LONG haul....)

Following up from previous BUY CALL. Osim has indeed consolidated above the 2.50 support before pushing higher further last Friday. Congrats to those who manage to accumulate some near 2.50. Osim next target would likely be 2.80. As long as support above 2.60 to 2.63, we are bullish still in the mid term and can continue to ride the uptrend.
Stop loss 2.57
DBS – 21ST March 24, 2014 - OSIM - Buy for 3-pronged growth, target price raised to S$3.08)
We find OSIM’s current business model to be robust and
capable of supporting growth into the future. OSIM’s threepronged
growth model comprises: i) Massage chairs driving
growth through new products; ii) TWG supplementing
growth with rapid store network expansion; and iii) GNC
providing resilient earnings and cashflows to the Group.
These factors, complemented by the scaling up of OSIM’s
presence in China, is more than capable of supporting
sustainable earnings growth going forward. OSIM’s soon-tobe
launched new version of the uAngel chair is set to build on
preceding model’s success while TWG’s rapid expansion is
expected to positively impact earnings growth. We expect
minimal EPS dilution of 1%/6% for FY14F/FY15F from
convertible bonds (CB) conversion. Maintain BUY, target price
raised to S$3.08 (Prev S$ 2.64) as we raise our PE multiple to
18x on stronger business model.

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