OSIM International

[greengiraffe]

http://www.businesstimes.com.sg/premium/...a-20140812

PUBLISHED AUGUST 12, 2014
OSIM in talks to add stores in Turkey, Russia

[SINGAPORE] OSIM International Ltd, Asia's largest maker of massage chairs, said that it's in talks to expand its international franchise with stores in Turkey and Russia.
OSIM's chief executive officer Ron Sim said that he hopes to reach a deal by the end of the year, adding in an e-mail interview on Aug 8 that "nothing is closed yet".
The Turkey and Russia agreements will complement fast-growing economies including China, which Mr Sim said is its top market with almost half of its 578 stores worldwide. OSIM is planning to add 20 to 30 new outlets each year while closing the ones that aren't performing, he said.
"The worldwide market is getting bigger and bigger for us," Mr Sim said.

[greengiraffe]

http://www.businesstimes.com.sg/premium/...s-20140827

PUBLISHED AUGUST 27, 2014
OSIM plans S$200m convertible bonds

BYNISHA RAMCHANDANI
nishar@sph.com.sg @Nisha_BT

LIFESTYLE products group OSIM International is planning to issue up to S$200 million in five-year convertible bonds.
The principal amount includes an upsize option of S$50 million.
The zero-coupon convertible bonds due 2019 have a conversion price of S$3.525-S$3.737. This represents a conversion premium of 25-32.5 per cent to Tuesday's closing price of S$2.82 per share.
They also carry a redemption price of 106.43-110.46 per cent while the put price is at 103.81-106.15 per cent, with OSIM able to call the put option after year three.

[Lbetter]

Why does this bond issue cause OSIM's stock price drop a lot in this morning? Any financial concern for this kind of zero-coupon convertible bonds issued?

[muns]

Not sure why with 300mil net cash, they would need to issue a 200mil convertible. Unless there's an upcoming plan to acquire more stuff?
______________________________________________________
Finding the Value in a Speculative World
http://www.valueinvestasia.com

[thor666]

Bluekelah, do you have evidence to back up your statements? The financial reports are still checked by auditors and money needs to be proven to be in the banks.

I agree that sg outlets are often empty, but that may not be the case for their other markets, china in particular.

Bear in mind, if the profit margin of their product is high enough, they do not really need to push many stocks out to market. That may explain the non-necessity for their shops to sell many items each month.

[Layman A]

http://www.businesstimes.com.sg/premium/...s-20140827

PUBLISHED AUGUST 27, 2014
OSIM plans S$200m convertible bonds

BYNISHA RAMCHANDANI
nishar@sph.com.sg @Nisha_BT

LIFESTYLE products group OSIM International is planning to issue up to S$200 million in five-year convertible bonds.
The principal amount includes an upsize option of S$50 million.
The zero-coupon convertible bonds due 2019 have a conversion price of S$3.525-S$3.737. This represents a conversion premium of 25-32.5 per cent to Tuesday's closing price of S$2.82 per share.
They also carry a redemption price of 106.43-110.46 per cent while the put price is at 103.81-106.15 per cent, with OSIM able to call the put option after year three.

Zero-coupon convertible bonds ??

Is there a typo error down here ?

What benefit the investor get in return other than risk ?

Who would subscribe to this funny instrument ?

[BlueKelah]

Bluekelah, do you have evidence to back up your statements? The financial reports are still checked by auditors and money needs to be proven to be in the banks.

I agree that sg outlets are often empty, but that may not be the case for their other markets, china in particular.

Bear in mind, if the profit margin of their product is high enough, they do not really need to push many stocks out to market. That may explain the non-necessity for their shops to sell many items each month.

Financial reports from companies operating with sales in China are a joke and should never be taken at face value as proven by the many S-chip companies which were listed on SGX. Auditors job is limited by papers submitted to them. Proof of cash status at banks can be manipulated as well if those are in China. Read some of the older threads on this forum to update yourself.

GNC and TWG Tea businesses are probably the ones bringing in the cash at the moment and those earnings are paying for the frequent dividend payouts.

But CFO selling out and now another CB ?

When people are greedy its surprising how gullible they can get. ROFL...

[thor666]

Hi Bluekelah, thanks for your take on this.

My take on the convertible bonds - why osim needs to raise funds - is due to their large reserves of cash is based in china, and they cannot take them out of china in the near term. This was highlighted in their annual report as it is a china law.

With regards to financial reports, your guess as good as mine. This may also apply to straco and cmhp since they are china based. I am aware of such risks and limit the exposure to china at <15% in my portfolio.

That being said, personally I dislike complicated financial instruments. A rights issue or bond offering would sit better with my personal preference.

Personally I dont see any issue for osim to enter turkish and Russian markets. Osim have been very consistent to say that they would enter markets where competition is not stiff, hence they do not have presence in japan. That being said, I am not sure whether turkish and russian people like message chairs. It doesnt seem to be in their culture at all, unlike the chinese.

I am vested and will review again with reference to fraud risk in mind.

[CityFarmer]

Financial reports from companies operating with sales in China are a joke and should never be taken at face value as proven by the many S-chip companies which were listed on SGX. Auditors job is limited by papers submitted to them. Proof of cash status at banks can be manipulated as well if those are in China. Read some of the older threads on this forum to update yourself.

IIRC, majority of the SGX listed companies have operation in China, does it mean all of their financial reports are "jokes"?

It is vastly different in saying "S-chip managements are doubtful", and "Companies operating in China are doubtful". The former is a common sense, but the latter is a false statement, IMO

[CityFarmer]

Not sure why with 300mil net cash, they would need to issue a 200mil convertible. Unless there's an upcoming plan to acquire more stuff?
______________________________________________________
Finding the Value in a Speculative World
http://www.valueinvestasia.com

The news article might answer the question

(not vested)

Osim drops by most in 3 years on convertibles

Osim International, Asia’s largest maker of massage chairs, dropped by the most in three years after a sale of $170 million convertible bonds sparked concern the company is preparing for a big acquisition.

Osim dropped as much as 6.4%, the biggest decline since August 2011, before trading 4.6% lower at $2.69 as of 10:44 a.m. in Singapore. Given that the company already has cash on hand of about $300 million, the fundraising exercise could be in preparation for a “big acquisition,” Chirag Saglani, an analyst at UBS AG in Singapore, wrote in a note to clients.

“Given the already strong cash position, we believe this issuance means that there could be a potential acquisition around the corner,” Saglani said. “If not, capital efficiency would be a concern.”

Proceeds from the sale of zero-coupon convertible bonds will be used to fund potential acquisitions, expansion plans and general working capital requirements, Osim said in a statement to the Singapore bourse today. The notes can be converted into equity at $3.525 per share, it said.
http://www.theedgesingapore.com/the-dail...ibles.html