(08-06-2011, 04:52 PM)lonewolf Wrote: I usually get nervous when companies used ambiguous terms like 'to enhance general corporate and working capital resources; and to provide finance for potential value-added acquisitions which the company may pursue as part of its strategic objectives and/or to reduce existing debts.'
It's as good as trying to tell us 'we dun know why we need the money but trust us we need the money; and if we cannot find any use for the money, we will use it to reduce debts'
I remember a blip in the ST the other day which MW posted here where it was reported that OSIM, in partnership with Perennial Real Estate submitting bids for commercially zoned land in Paya Lebar and Punggol. So if I want to make a guess, I would say that he could be raising funds for his real estate adventure.
Time will tell I guess.
I agree, plus taking loans to repay debts is certainly not very good use of money.
OK, so OSIM is planning to trade a pound of flesh for money (assuming share price exceeds $2.025).....
(Not Vested)
Business Times - 09 Jun 2011
OSIM places out $120m in convertible bonds
Bonds mature in July 2016; conversion price at $2.025
By NISHA RAMCHANDANI
OSIM International has fully placed out $120 million in unsecured convertible bonds to institutional and accredited investors, the lifestyle products group said yesterday.
However, its shares shed eight cents in trading to close at $1.54 yesterday after the company announced the bond issue earlier in the day.
The five-year convertible bonds, which mature on July 5, 2016, will be convertible into new OSIM ordinary shares at an initial conversion price of $2.025 per new share. This represents a 25 per cent premium over the closing price of $1.62 per OSIM share on June 7.
The Singapore dollar-denominated bonds will bear interest at the rate of 2.75 per cent per annum, payable semi-annually in arrear. This is at the top end of the likely 1.75 per cent to 2.75 per cent range that BT reported in an article published on June 8.
Upon full conversion of the bonds, some 59.26 million new OSIM ordinary shares will be issued, representing 7.82 per cent of OSIM's existing issued and paid-up share capital as at June 7.
The bonds have a put option in the third year, as well as an issuer call also in the third year. The trigger for the issuer call is 125 per cent above the conversion price.
'OSIM is continuing with the roll-out of our business in China and North Asia and is constantly seeking new value-added acquisitions as part of our growth strategy. The issue of the convertible bonds represents an additional source of growth capital to pursue opportunities in Asia, with a focus on China,' said CEO Ron Sim.
Hongkong and Shanghai Banking Corporation (Singapore), Credit Suisse (Singapore) and The Royal Bank of Scotland (Singapore) are the book-runners and lead managers. According to Matthew Song, HSBC's head of equity capital markets (South-east Asia), demand for the bond issue was robust, with it being oversubscribed by more than five times.
OSIM is planning to use the $118.3 million in net proceeds as general and working capital, to finance potential acquisitions and/or to reduce existing debts.
(20-10-2011, 02:10 PM)mrEngineer Wrote: Another business like OSIM that I fail to understand why no crowd at the stores but always can increase revenue and profits.
The products are the top of the range, premium stuff like the Pradas and the Guccis
Have inserted the replies on OSIM products in the OSIM thread.
Please continue the discussion in this thread, please, and not the Eu Yan Sang thread.
(20-10-2011, 02:10 PM)mrEngineer Wrote: Another business like OSIM that I fail to understand why no crowd at the stores but always can increase revenue and profits.
The products are the top of the range, premium stuff like the Pradas and the Guccis
Have inserted the replies on OSIM products in the OSIM thread.
Please continue the discussion in this thread, please, and not the Eu Yan Sang thread.
Thanks!
Oops! Please excuse my poor English. Or the lack of comprehension. Or is it context? Oh, where is my English teacher?
Now back to business proper
my thoughts were in response to observations by pianist and mrEngineer who had failed to understand why no crowd at the stores but always can increase revenue and profits
These were made in the Eu Yan Sang thread thus a natural tendency to assume the observations were about products made by Eu Yan Sang and the stores run by Eu Yan Sang. By extension my thoughts were just a continuum of the discussion at hand.
Perhaps I should have been more elaborate and say "The products sold at the Eu Yan Sang's stores both in Singapore and Hong Kong are of high quality quite unlike the highly fragmented mom-and-pop medical halls that we see ubiquitously and probably go to buy our koyoks and knick-knacks for our aches and pains.
The products solds are at the top of the range, premium stuff, the Prada and Guccis of the TCM trade, hence the premium prices for health tonics sold in Eu Yan Sang stores….like Hour Glass."
Just to sure I must state categorically that I know next to nothing about OSIM since THIS IS the OSIM thread.
And I also know next to nothing about Hour Glass. Okay, maybe a little more than OSIM
I know Eu Yan Sang probably a lot better.....enough to put my money where my mouth is!
OSIM's third-quarter net profit rose marginally to $13.1 million, from $13 million a year ago. But nine-month earnings of $52 million are up 57 per cent from a year ago and have already exceeded 2010's full-year earnings of $50 million.
For the quarter ended Sept 30, 2011, there was a one-off tax provision of $2.8 million.
Q3 earnings per share were 1.74 cents, down from 1.94 cents a year ago.
The three months saw revenue grow 5.9 per cent year on year to $123.6 million.
Cash and cash equivalents stood at $190 million at the end of the quarter. The company completed a $120 million convertible bond issue on July 5 this year.
OSIM said it has shown positive growth in sales and profitability for 11 consecutive quarters due to a better product mix and higher productivity which resulted in higher profit margins.
'This quarter, the sentiment is actually weak. We could do a lot more advertisements but we will be shooting empty bullets,' said chief executive Ron Sim. Innovation and research and development are of utmost importance in the business. A good mix of products will attract different sectors of customers and create wants. 'We are not in the business of fulfilling needs, our business is about creating wants,' said Mr Sim.
Revenue for the first nine months this year has grown 9.3 per cent to $411 million compared to the same period last year, with a net cash flow of $61 million from operating activities. OSIM shares fell six cents yesterday to close at $1.19.
Osim's plans to open more stores have hit a speedbump, according to the attached article from The Edge. But they are going ahead with their R&D to introduce new and innovative massage products (I like the name uPhoria LOL!).
There is an article on Osim's competitor OTO in today's Zaobao. OTO was listed in HK recently and according to Frost and Sullivan is the leader in HK with 65% of the 消闲产品 (lifestyle product ? ) market in 2010. However OSIM is the HK market leader in Massage Chair.
OTO has 14 retail outlet in HK and 16 寄卖专柜 ( not sure what is that, maybe some kind of reseller ). It also has 30 point of sales in China. HK contributed HK$209.4 million in revenue. Is there a breakdown of OSIM business by country?
(16-04-2011, 08:29 AM)Musicwhiz Wrote: Business Times - 16 Apr 2011
Ron Sim's tea break
OSIM acquires stake in luxury tea brand TWG & also forms North Asian JV with it
By KELLY TAY
OSIM International, the lifestyle products group best known for its massage chairs, has acquired a 35 per cent equity stake in TWG Tea Company Pte Ltd, for $31.36 million.
This is alongside a newly-formed joint venture (JV) with TWG - OSIM-TWG (North Asia) - of which OSIM will be a 60 per cent majority shareholder.
The partnership targets expanding Asian markets, covering four North Asian countries: China, Hong Kong, Taiwan, and South Korea. 'Four countries may seem small, but these are OSIM's areas of expertise, with a track record of about 25 years in the region,' said Ron Sim, chairman and CEO of OSIM.
The joint venture will accelerate TWG's geographical expansion across Asia, allowing the company to tap the growing demand for luxury Asian brands among middle to upper-income households in the region.
Calling the joint venture 'more than just an investment', Mr Sim stressed that the partnership represents an opportunity to 'not only grow together but shape the market in North Asia'.
For starters, Mr Sim confirmed that a TWG salon and boutique - much like the one in Singapore's ION Orchard - will open in Hong Kong's International Finance Centre (IFC) mall in the third quarter of this year.
Said Mr Sim: 'Our value-added investment in TWG Tea is expected to be earnings-accretive since TWG Tea is one of the fastest-growing luxury tea brands in the world.'
Teas of Singapore-based TWG (which stands for The Wellness Group) are available globally in at least 20 countries. Worldwide online ordering is also available. Besides running its retail operations, TWG is also a supplier to hotels, restaurants and international airlines such as Singapore Airlines.
The partnership 'elevates OSIM's existing lifestyle philosophy', Mr Sim said, adding: 'TWG Tea is a premium brand with an impressive track record. Like OSIM, it deals with well-being and lifestyle products.'
OSIM has done wonder in creating massage chair market with strong brand by leveraging its marketing expertise apart from its innovation expertise. Yet to be seen if OSIM can apply its marketing expertise to TWG and create tea boutique brand market equivalent to Starbucks (coffee) albeit in medium to luxury space.
However I am unable to understand the synergy between massage chair vs TWG's tea business. Without synergy how would it generate accretive earnings?
Let's hope it doesn't turn into another albatross around osim's neck. I don't see the links of TWG with the core business and have my doubts. But as with all entrepreneurs, Ron Sim will be out to prove all naysayers like me wrong.
The way I see it, OSIM is already doing pretty well without TWG, as its core operations show. For this Q, they even declared a special dividend of 1c in addition to their normal interim dividend of 1c. Shows the business is cash-rich and generating good cashflows! Imagine those who had bought it at 6c back during the GFC (yeah OK, now I really sound like a bunch of sour grapes....! :p)
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