OSIM International (O23.SG)

Ticker = O23

Operation = Asia, America, Africa, Europe, Middle East

52Wk High = 1.080

52Wk Low = 0.370

ROA = 10.10% (2009)

ROE = 24.10% (2009)

EPS = 0.0589 (based on 2Q2010)

P/E = 16.64

Intrinsic Value

P/E Model = 0.884 SGD (Based on Fair P/E of 15)

DCF Model = 0.746 SGD

EPS Model = 0.478 SGD

OSIM business consist of retailing lifestyle and healthcare products. It outsourced its products, which could explains its lower profit margin of 4.89% (2009). OSIM focuses on the marketing aspect of its products, building up on its brand reputation and recognition. With currently 1024 outlets and increasing, the group plan to penetrate market such as China and aim to have its product easily available.

The company performance in terms of has been improving since 2008, producing relatively good operating cash flow with manageable debt level. However, as OSIM products could be considered as a luxury instead of need, its sale is dependent on the economy. Furthermore, with increasing similar featured products in the market, the price of its product has to be competitive. Brand name could be said to be its selling point. I would say that the room for growth for this type of products would reach its saturation point in near future.

With price of 0.980 SGD, I would say that it is currently overpriced with limited room for growth. Its dividend payout is relatively low, with interim dividend of 0.01 for 2Q2010.