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OSIM Posts Steady FY09 Amidst Turbulence

Contributed by Shares Investment

By Aw Jie Sheng

OSIM International, one of Singapore’s leading brands in health and wellness, announced a commendable set of results on Wednesday for its financial year ending 31 December 2009.

4Q09 sales were up 27% to $141m against 4Q08’s $111m. On a full year basis, sales were up 4.4% to $477m against the previous year’s $457m. The positive sales growth was due to contribution from new products.

FY09 profit before and profit after tax were $38m and $23m respectively, against FY08’s loss. The loss in the previous year was mainly attributable to impairment made on Brookstone, its investment in America, which was severely affected by the economic crisis.

When asked by analysts about Brookstone’s performance for the period, CEO Ron Sim said that Brookstone’s financial results would be announced soon and that it was “satisfactory”.

Riding The China Growth Story

OSIM’s global presence

OSIM is banking on China to drive its next stage of growth. OSIM currently has about 200 outlets in China and plans to open 50 to 80 outlets this year. It also intends to build another 60 to 100 RichLife – OSIM’s new brand in China focusing on nutritional supplements – to create a new profit stream. Sales from North Asia accounted for 54% of FY09 total sales.

Ron said that he was sanguine about the company’s prospects in China, having established a presence in the country way back in 1993. He was also confident that credit tightening measures introduced by the PRC government would not have any negative impact. He said that the measures were targeted at cooling China’s equities and property market. This would not affect the affluent segment of China’s population, which OSIM is targeting, as they tend to use cash than credit. Shares of OSIM closed 19% higher to $0.615 Thursday on heavy volume

This article is contributed by Shares Investment. Visit Sharesinv.com for the latest Singapore, Malaysia and China stock market news and reports.