TWG Tea reaching "critical stage" of profit growth

And will soon propel OSIM.

"From October onwards, the results of this associate will be consolidated, now that OSIM has increased its stake to 53.7%. Given that the business is also reaching a critical stage of profit growth, we expect TWG to be another strong leg of growth from FY14," reckons Maybank following the release of OSIM International's 3Q13 results.

This higher contribution from TWG led Maybank to raise its OSIM's FY14-15 estimates by 3%.

"We factor in only a conservative contribution into our estimates and will revisit as progress is made. Next year, the company expects to open 10 new outlets (currently 22), including the first outlets in North Asia," notes Maybank.

"With a stronger growth profile, we believe the stock will see further re-rating over the next 12 months, above its historical mean of 16x since early 2008," it adds.