OSIM’s $18.8m profit within analyst's expectations

It was 2.2% higher than OCBC’s projection of $18.4 million.

OSIM’s strong earnings was due to sales growth from new product launches.

Here’s more from OCBC:

2Q11 earnings within expectations. OSIM International Ltd reported its 2Q11 results with revenue increasing 6.0% YoY to S$138.6m, thanks to broad based sales growth from the launch of new innovative products. We are further encouraged by the YoY increase in revenue recorded despite the conversion of GNC Australia into franchised outlets from 3Q10 which led to lower sales recognition. Net profit accelerated 55.3% YoY to S$18.8m.

Sequentially, revenue fell 6.9% while bottom-line declined 6.8%. While sales missed our forecast by 10.1%, net profit was within expectations, or 2.2% higher than our projection of S$18.4 due to betterthan-expected margins. 1H11 revenue of S$287.4m (+10.8%) and net profit of S$38.9mm (+93.2%) met 46.3% and 51.7% of our full-year estimates respectively. As expected, an interim dividend of 1 S cent per share was
declared (total of 2 S cents YTD).

Pipeline of products to underpin growth momentum. During the quarter, OSIM managed to boost its operating margin and net margin by 6.3 ppt and 4.3 ppt to 17.8% and 13.5% respectively on a YoY basis. This was attributed to improved operating efficiencies and better product mix as OSIM continued to launch new innovative products with improved designs and functionality.

Moving forward, management has reiterated its strong focus on innovation with a pipeline of products to be launched in the coming months. We believe that this will improve OSIM's competitive ositioning, underpinned by its strategic marketing campaign over the years to build a strong brand equity.

Prospects remain sound albeit macroeconomic uncertainty. We believe that OSIM's growth story remains intact as it drives its earnings traction with new innovative products and a diversified portfolio of specialty brands, coupled with its continuous efforts to raise productivity per outlet and per man.

OSIM also incorporated OSIM-TWG Tea (North Asia) during the quarter and is targeting to open its first salon in the IFC Mall in Hong Kong by endNov. Its Taiwan TDR approval period has also been extended by three months to 28 Oct 2011. We do not expect OSIM's expansion plans to be affected even if the TDR listing does not take place, given its strong net cash position.

Also Read

Changi Airports and Hainan Meilan form JV for non-aero services

F&B brands remain key drivers of retail leasing in Q3

Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

I want to download the media kit