OSIM International

[CityFarmer]

Most, if not all analysts have downgraded OSIM rating and TP...

Osim slumps by most in 5 years on earnings

SINGAPORE – Osim International, Asia’s largest maker of massage chairs, tumbled 14 per cent today (Oct 29) after an unexpected drop in profit disappointed investors, the Bloomberg news agency reported.

Logging its biggest decline since February 2009, Osim plunged to S$1.935 at the close in Singapore, with about 30.2 million shares changing hands, about 18 times more than the average daily volume in the past 12 months, according to data compiled by Bloomberg. The company yesterday reported third-quarter profit dropped 28 per cent to S$16.4 million from a year earlier.

“The results were a huge disappointment,” CIMB Group Holdings analysts led by Kenneth Ng wrote in a note. “Osim blamed TWG Tea’s setup costs in four cities in North Asia, plus legal costs in two disputes that weighed down performance.”
...
http://www.todayonline.com/business/osim...s-earnings

[thor666]

Keep calm and carry on...results still very profitable.

I've read enough analyst reports to know some of the analysts reports are pretty over the top. Osim was very unlikely to hit $4 in a short span of time.

Vested for the long term.

Sent from my D5503 using Tapatalk

[weijian]

I guess we now kinda know why the price started plunging not too long ago. News of the drop in profits probably leaked out. And guess what, in all likelihood, nobody is going to get caught.

This begs the question of whether we are really playing on a level field when there are insiders who always get away scot free. Not the first time this phenomenon has been observed and certainly not the last.

In my view, some enforcement action needs to be taken and broadcasted so that a message is sent that if you insider trade, you run the risk of running afoul of the law. Sending those useless queries to the companies or advising people to trade with caution is ineffective to say the least.

But sadly, in my view, seems like those who insider trade are outsmarting SGX.

I hope you are not under the illusion that you can achieve the same level playing field as insiders,brokers and the Godfathers. The faster you realize this (that the OPMI can never have a level playing field), the better it is.

I do not have actual base rates (convictions per actual insider trade) but i believe the success rate of convictions are low (maybe <10%)

Sneak peek at how SGX uses SMART (not so smart i think considered the number of type1/2 errors it is producing):
http://www.channelnewsasia.com/news/busi...15074.html

Examples of successful conviction of insider cases in Spore:
http://www.ey.com/SG/en/Services/Assuran...s-offences
http://financialcrimeasia.org/2014/05/21...r-trading/
http://www.singaporelawreview.org/2010/1...r-trading/
http://www.mondaq.com/x/169268/White+Col...+Singapore
http://news.asiaone.com/News/Latest+News...87634.html

Of course, US SEC has appeared to do a good job for the past few years with a couple of big whales' prosecution and successful convictions:
http://www.bloomberg.com/video/sac-will-...YHG0g.html
http://dealbook.nytimes.com/2011/05/11/r...blogs&_r=0

[greengiraffe]

http://www.businesstimes.com.sg/companie...e-year-low

OSIM shares plunge to one-year low
By
Cai Haoxianghaoxiang@sph.com.sg@HaoxiangCaiBT
31025641.jpg AFTER being under pressure in the last few weeks, lifestyle products group OSIM International plunged to a one-year low of S$1.935 on Wednesday, down 31.5 cents or 14 per cent. PHOTO: SPH
30 Oct5:50 AM
Singapore

AFTER being under pressure in the last few weeks, lifestyle products group OSIM International plunged to a one-year low of S$1.935 on Wednesday, down 31.5 cents or 14 per cent.

A record 30 million shares changed hands.

OSIM, which sells massage products, nutritional supplements and luxury tea, had on Tuesday reported a 28 per cent drop in net profit to S$16.4 million for its third quarter ended Sept 30, 2014.

The profit drop was due to a mix of legal costs and startup costs for subsidiary TWG Tea, as well as a weaker consumer spending environment in Asia. The company also said it is embarking on a period of increased investment across the group.

CIMB Research, which had a target price of S$4.05 just four days before the results came out on Tuesday, said the latest results were "a shocker". It slashed its price target to S$2.37.

"Legal fees should fade out next year but TWG setup costs could still intensify as TWG bulks up presence in Taipei, Shanghai and rolls out in Beijing, Guangzhou ... There will be a lower share price to buy into this company," analysts Kenneth Ng and Justin Chiam said.

DBS analyst Alfie Yeo kept his "buy" call with a lower target price of S$2.59. He expects growth to pick up on new massage products and the expansion of TWG Tea.

"We believe current valuations have priced in negatives given that valuations are below the peer average of 18 times (earnings)," he said.

OSIM's latest earnings report marked an end to a long-running streak of profit rises that had propelled its stock from S$0.05 in 2009 to S$2.90 by the end of April this year - up 5,700 per cent. It was the best stock performer in Singapore since the global financial crisis.

As expectations for the stock floated ever higher, some saw the decline coming. Macquarie Research analyst Sam Chan downgraded the stock to "underperform" in June with a target price of S$2.30. OSIM had been an impressive turnaround story and earnings growth was driven by increasing margins, but that story was over, he said.

He pointed to four factors: There are near-term headwinds in China; it is too early to be bullish on TWG; sales growth excluding TWG is slowing; and management has a poor record of meeting their guidance targets. His latest price target was S$1.90.

Sharp drops in OSIM's stock prices began earlier this month, prompting a Singapore Exchange query and a subsequent "trade with caution" advice.

After OSIM's results on Tuesday, there were two analyst downgrades to "hold", but six maintained their "buy" calls.

Founder and chief executive Ron Sim said at a briefing on Tuesday evening that the fundamentals of his firm remain strong, and margins for its core massage chair business are holding up.

Asked about the recent stock decline, Mr Sim pointed out that he is still holding on to his 62 per cent stake. People had complained that the stock ran up on low liquidity, he said. "Now you have liquidity."

[yawnyawn]

From DMG,

OSIM’s 3Q14 results were a big miss, as earnings fell 27.8% YoY to
SGD16.4m, partly dragged down by legal costs. Its 9M14 net profit now
makes up 63% of consensus FY14 net profit and it is not likely to
achieve earlier forecasts. We are confident the business remains
fundamentally sound, but are cognizant that the operating environment
is weak. We keep our BUY rating, with a lower TP of SGD2.75 (from
SGD3.85) derived from a 16.5x FY15F P/E, 22.2% upside.

Overall sales were weak. OSIM International’s (OSIM) 3Q14 revenue
rose 3% YoY to SGD158.2m, but this was due to the consolidation of
TWG. We estimate revenue of its other businesses were down by
around 5-10% YoY, with the decline being broad-based in nature.
Discretionary retailers are experiencing weak demand in key markets
like China, Hong Kong, Singapore and Malaysia. The lack of any new
products that are major hits in recent quarters was also a factor, in our
view.

 One-off legal fees and start-up costs at TWG dragged down profit.
Its profit before tax declined by SGD6.7m. Management cited one-off
legal fees for its ongoing trade infringement appeal case in Hong Kong.
Although the sum was not disclosed, we estimate it to be SGD3m-4m.
Start-up expenses at TWG were another factor behind the decline as
well. This year, TWG set up new central kitchens and expanded its total
staff in anticipation of store openings in Taiwan and Shanghai.

 We believe its business remains sound but the environment is
weak. We think OSIM’s cash flow is a good indicator of the health of its
business. YTD, it generated SGD69.8m in operating cash flow – which is
only marginally behind that of the same period last year. On a positive
note, the poor environment may weed out weaker retailers and allow
OSIM to secure advantageous retail space for its next leg of growth.

A road-bump; we keep our BUY recommendation. With the earnings
disappointment, we now use a lower 16.5x FY15F P/E (previously 20x)
to value the stock, in line with its retail peers. OSIM still has a very strong
balance sheet and a net cash position of SGD237m. Our TP of SGD2.75
also factors in net cash/share of SGD0.30.

[greengiraffe]

http://www.businesstimes.com.sg/companie...lloff-over

HOCK LOCK SIEW
OSIM: is the stock selloff over?
By
Cai Haoxiang
33060570.jpg THE stock price fall was shockingly swift. And those still invested in lifestyle products group OSIM International must be wondering when the pain will end. PHOTO: OSIM
7 Nov5:50 AM
THE stock price fall was shockingly swift. And those still invested in lifestyle products group OSIM International must be wondering when the pain will end.

Amid the search for answers, some observers blame the dismal third-quarter net profit, which fell 28 per cent to S$16 million. This

[Big Toe]

Side note. Target prices and research done by local research houses are somewhat fictional.
Believing them 100% is equivalent to believing that Joven Chew(mobile Air) is running a honest business.

[crabcrab]

Osim Int'l ($1.80) - This massage chair company has seen its biggest declined in share price in recent month. A growth company with Osim, Gnc & Twg under its brand name. It seems to me that the recent shorts of this counter may be coordinated effort, timely and swiftly especially before the announcement of Q3 results. The so-called Analyst reports are often timely to put salt on wounds and acted as catalyst of fear...Fundamentally, OSIM at current level may be start to be a fair value of a trading stock. All negative news seems to have been factored in and foreign funds as net sellers of Osim in recent weeks seems to have become net buyers the last few trading days (Crab start trading recently in Osim and the counter parties were largely foreign funds)... In the near term, possibly went back above $2.00 due to massive short covering in OSIM shares? At this time, it is of anyone guess.. But seems that the longist are striking back... Gd luck..

(0Crabcrab vested, caveat emptor)

[LocalOptimal]

Osim Int'l ($1.80) - This massage chair company has seen its biggest declined in share price in recent month. A growth company with Osim, Gnc & Twg under its brand name. It seems to me that the recent shorts of this counter may be coordinated effort, timely and swiftly especially before the announcement of Q3 results. The so-called Analyst reports are often timely to put salt on wounds and acted as catalyst of fear...Fundamentally, OSIM at current level may be start to be a fair value of a trading stock. All negative news seems to have been factored in and foreign funds as net sellers of Osim in recent weeks seems to have become net buyers the last few trading days (Crab start trading recently in Osim and the counter parties were largely foreign funds)... In the near term, possibly went back above $2.00 due to massive short covering in OSIM shares? At this time, it is of anyone guess.. But seems that the longist are striking back... Gd luck..

(0Crabcrab vested, caveat emptor)

I believe there is already a thread on this...

[greengiraffe]

Gd Luck Crab....

Trading a big downtrend stock can be exciting when you catch a turning point...

What if the turning point is false? GG almost got killed trying luck on AGO, Atlas Iron. I lost a finger... that iron stock has since plunged to 23 from my last cut loss level of 36.5. Note I start trading at 55 late Sept when stock was deleted from S&P index rebalancing...

Osim's earnings model has never been transparent - both in terms of chair, vitamins and even TWG.

That bad patch post GFC when the stock was dumped to a penny stock status is a good reminder.

I won't dare catch a falling knife. Got $ better off writing off against a Uinfinity and get some enjoyment.

Odd Lots Vested
GG

Osim Int'l ($1.80) - This massage chair company has seen its biggest declined in share price in recent month. A growth company with Osim, Gnc & Twg under its brand name. It seems to me that the recent shorts of this counter may be coordinated effort, timely and swiftly especially before the announcement of Q3 results. The so-calles Analyst reports are like putting salt on wounds.. Fundamentally, OSIM at current level may be start to be a fair value of a trading stock. All negative news seems to have been factored in and net sellers of Osim in previous recent weeks seems to have become net buyers (Crab start trading recently in Osim and saw the counter parties were largely foreign funds)... In the near term, possibly went back above $2.00 due to massive short covering in OSIM shares? At this time, it is of anyone guess.. But seems that the longist are striking back... Gd luck..

(0Crabcrab vested, caveat emptor)