OSIM International

[greengiraffe]

UOB KH noted:

https://consumer.fda.gov.tw/Food/detail/...x?pid=4795

OSIM International (OSIM SP)                         HOLD            

Price/Target: S$1.625/S$1.56                            Market Cap:  S$1.2b

Excessive pesticide found in TWG Tea’s product
 
Analyst: Brandon Ng                 Tel: +65 65906615

What’s New

According to a report by Taiwan's Food and Drug Administration, the agency has found excessive levels of pesticide residues in OSIM’s majority-owned TWG Tea's "Chamomile Green Tea" that was exported from India.

https://consumer.fda.gov.tw/Food/detail/UnsafeFoodD.aspx?pid=4795

While OSIM has made no official announcement  on this issue, a spokesman from TWG Tea has reassured consumers that the product in question had passed Singapore tests but was rejected in Taiwan due to differing tests conducted on its products in different territories.  

Our View
The TWG Tea segment currently forms less than 10% of OSIM’s revenue but due to the initial set-up costs and legal expenses, it has yet to be profitable. In the near term, while there may be reputational risks with regards to TWG Tea’s products, we believe TWG Tea will take this opportunity to implement stricter checks on its suppliers to prevent such cases from occurring again.

On the larger picture, we think investors should be more concerned over the weaker retail outlook as OSIM's  core earnings have been affected by a slowing economy in the last few quarters.

Maintain HOLD and target price of S$1.56. OSIM is set to report its 3Q15 earnings this late-October to early-November. Entry price: S$1.35.

---

[CityFarmer]

OSIM announced 3Q quarterly performance. The dividend remains the same.

OSIM's 3Q earnings dive 62.4%, declares dividend of one cent

SINGAPORE (Oct 27): OSIM International ( Valuation: 1.50, Fundamental: 3.00)'s earnings plunged 62.4% to $6.2 million in the third quarter ended Sept 30, 2015 from $16.4 million a year ago.

Revenue declined 10.5% to $141.6 million from $158.2 million previously.

The massage chair manufacturer says 3Q has been "another challenging quarter", adding that retail sales across the core countries have been soft.


It notes that 3Q has seen "further challenges" from gyrating markets and currency turmoil in the region.

Despite these challenges, OSIM says its "dominant" brand has enabled the group to maintain a stable gross margin and cash generative business.

It recommends an interim dividend of one cent per share.
...
http://www.theedgemarkets.com/sg/article...d-one-cent

[greengiraffe]

OSIM announced 3Q quarterly performance. The dividend remains the same.

OSIM's 3Q earnings dive 62.4%, declares dividend of one cent

SINGAPORE (Oct 27): OSIM International ( Valuation: 1.50, Fundamental: 3.00)'s earnings plunged 62.4% to $6.2 million in the third quarter ended Sept 30, 2015 from $16.4 million a year ago.

Revenue declined 10.5% to $141.6 million from $158.2 million previously.

The massage chair manufacturer says 3Q has been "another challenging quarter", adding that retail sales across the core countries have been soft.


It notes that 3Q has seen "further challenges" from gyrating markets and currency turmoil in the region.

Despite these challenges, OSIM says its "dominant" brand has enabled the group to maintain a stable gross margin and cash generative business.

It recommends an interim dividend of one cent per share.
...
http://www.theedgemarkets.com/sg/article...d-one-cent

Gameover once again... Osim's lifestyle products remain cyclical not matter how much brand building and extension it is attempting... hence premium ratings remain elusive...

[crabcrab]

Many may be confused between "trading a stock" and "investing a stock". Allow me to further elaborate...

In the recent scenario of OSIM, that will depend on whether one placed a view on trading or on value investing. IMO, Osim is definitely not for those who are looking for a steady dividend with a steady stock price. However, the recent volatility made it a valid reason to trade in this counter. Be it to short or long, the ability for the price to move (be it up or down since we can trade on both side) must be the key factor for a trading stock. Be it Osim trading at $3.00 per share or $0.10 per share, still it is the price fluctuation that counts in a trading stock. And you must guess the direction right to make gains. If one take on a view of value investing, stocks like Osim should never be in one's portfolio due to its profile..

In contrary, we should invest and not trade on good quality undervalued shares with little price movement. (I don't call them blue chips as blue chips may not necessary be undervalued). Many will know that companies like Hiap Hoe and Bonvest had deep value. But so what if it is cheap? There is little price movement. We should avoid such stocks if we take a trading stand. If one take a short stance in trading such stocks, it is more likely that the price movement is likely to be minimal, unless some positive/negative announcement that act as catalyst made the price to fluctuate suddenly. Over the long run, these companies should move upwards, provided no major negative development.

So it depends on whether we are taking a position on investing or trading. In summary, trading means we want price movement and never mind that valuation. We just want to make from the price difference.. (Be it we long or short the shares)
But in investing, we want values, anything that is undervalue can make a bet in it.

So what is your stand now, trading or investing? Good luck..

Hi crabcrab,

I am interested with your statement below:
" If one take on a view of value investing, stocks like Osim should never be in one's portfolio due to its profile.."

I bought OSIM 1 year ago when it was at $2.0, when I though I am doing value investing based on its earning and growth. Now, it is showing I was wrong. But, the question is , do you know it is not suitable for value investing even at 1 year ago? If yes, how?

Appreciated if you could enlighten me on that!

GSG

Perhaps, lets just do a very simple case study based on this OSIM Annual Report 2013:

http://infopub.sgx.com/FileOpen/AR%20201...leID=20346

NTA was 26 cts in 2012 and 36 cts in 2013. So if one is paying for $2.00 that is worth probably only 36 cts when liquidated, one need to ask ownself: why am I willing to pay $2.00 when its net worth is only 36 cts? Then, you got to look at its property if they are currently undervalued? You got to look into its massage chairs if they are undervalued? You got to look into its current business model if it is sustainable? You got to look into its liquid cash assets. You got to look into the team of management whether they are trustable? You even got to look into the web of shareholders structure if they have any external linked which may influence the valuation of its asset at current level, and many others... Then now do we see value if we bought at $2.00? So long we are paying a premium price to a share price, it is not value investing.

However, if one is confidence for its potential future earnings and thereby willing to pay a premium to 'bet' on that future earnings with high growth, one may buy into the stock with the hope that many others may discover the growth and follow through, causing demand exceed supply and, thereby the rise in a share price, vis-a-vis. This is not even called "investing" and there shouldn't be a term called "growth investing". This is called "PUNTING".

Follow through, hedge funds and 'analysts' may take opportunities to write beautiful stories and generating reports, to create pop-up demand among retailers and thereby creating a catalyst for a share price to rise. But be very careful at this stage. Analysts are usually paid to generate such reports to catalyses demand or supply and that they are not serving the retailers. So before a 'sell' call report came out, likely their paying master would have already started to unlock their shares and double short when such reports are released to the retailers. (sounds scary right). So never believe in analyst reports, do your own homework. And be your own analyst that can act before they do. Technical chart is just for reference and pattern of charts can be artificially drawn too by the bbs too.

To win the market, one need to understand how the market psychology and the external micro and macro environment that influence the creation of the patterns of technical chart. Not by reading technical chart and interpreting the chart to win the market.

Lesson end.....

Thanks!
I think my mistake is not understanding enough its business mode, in order to tell whether its current business model is sustainable, or even tell whether its historical results are "fishy" as others may feel.

Osim price had come down tremendously since this forum post. Indeed, the current price suggest that Osim was overvalued then..

[BlueKelah]

This stock has lost half its value since my last postings. Still overvalued IMHO, at least until it falls another 50%. 

Ron sim is rapidly going down in rank of Singapore's richest.

I'll make my 10c call again and continue drinking teh tarik whilst my wife gives me a massage.........  

-not vested-

[desmondxyz]

OSIM has been raising its stake in China Sports from 9.34% to 22.42% from 5 Jan to 13 Jan. Ron is getting serious.....

[thor666]

OSIM has been raising its stake in China Sports from 9.34% to 22.42% from 5 Jan to 13 Jan. Ron is getting serious.....

Hi Desmond, is Ron investing on China sports in his personal capacity? I could not find the announcement on sgx.

Sent from my D5503 using Tapatalk

[CY09]

I am bit skeptical of FJZY's financial and worried when i saw the news. Thoughts of a "Foreland" struck me but fortunately the refund amount is relatively small. This company makes it to my list on "how to be the top 50 richest in Singapore".*

On the balance sheet it has 437m RMB or s$91.3M of cash with about 29.5m RMB or s$6.2M of ST-debts; and FJZY market cap is s$15.5M. Even the company's level of cash & equivalent is higher than current mkt cap.

*For those interested in joining Singapore's top 50 richest, let me elaborate; please bear with my repeat boring remarks if you have read my Qingmei thread:
1) Convince a bank to loan you 20M, use it to buy over FJZY (current mkt cap 15M) and you will have s$91.3M cash

2) Now use 10M to buy over Qingmei (current mkt cap 8m);
.......

4) Offer $40M to buy over China Sports Intl (current mkt cap 33.7m); then use its RMB849M of cash pay off its RMB202M trade payable and RMB108.5M debt; to be left with RMB 538.5M or s$112.5M. So you gain $72.5M from this takeover

5) Now offer $34M to takeover Universal Resources (current mkt cap 30.1M) to get the $63.6M present in its B/S.

6) Lastly, use 34M to takeover Changtian plastics (current mkt cap 29.7m) who has reported s$202 M cash at its group level

In 6 simple steps, you are now $454.2M “richer in cash” with an additional few hundred Mil worth of PPE and receivables. The 50th Richest men in Singapore only has a net worth of $450M!

He must be reading my posts 

[desmondxyz]

OSIM has been raising its stake in China Sports from 9.34% to 22.42% from 5 Jan to 13 Jan. Ron is getting serious.....

Hi Desmond, is Ron investing on China sports in his personal capacity? I could not find the announcement on sgx.

Sent from my D5503 using Tapatalk

Not directly, through OSIM...

[thor666]

OSIM has been raising its stake in China Sports from 9.34% to 22.42% from 5 Jan to 13 Jan. Ron is getting serious.....

Hi Desmond, is Ron investing on China sports in his personal capacity? I could not find the announcement on sgx.

Sent from my D5503 using Tapatalk

Not directly, through OSIM...

Thanks Desmond and cy09.

Sent from my D5503 using Tapatalk