Excerpts from latest analyst reports....

DMG maintains 'buy' call and 94-c target price for EU YAN SANG

Analysts: Melissa Yap and Terence Wong, CFA

richard_eu_gourmet
Richard Eu, CEO of Eu Yan Sang, on a giant screen at an event. Nextinsight file photo

Eu Yan Sang reported a net loss of S$2.8m in 2QFY12, due to a S$8.8m impairment charge on ASX-listed associate, Healthzone.

Revenue grew 9% YoY to S$69.8m, underpinned by growth across all three core markets of Singapore (4%), Hong Kong (10%) and Malaysia (13%).

Operating profit was however flat at 1% YoY to S$7.7m due to an 11% rise in opex emanating from its rapid store expansion, which saw a record 16 new stores in 2QFY12.

Taxes for the quarter were significantly lower YoY as the Group recorded a S$1.8m settlement to the Malaysian tax authority in 2QFY11.

Notwithstanding the write-off, PATMI would have grown 49% YoY to S$6.1m. EYS remains optimistic on HZL providing it a solid platform into Australia and has made a A$5m (S$6.7m) bid for certain assets of the entity.

We continue to like the Company for its strong leadership position in the branded TCM space and resilient core business which has generated mid teens growth over the past decade.

Maintain BUY with unchanged TP of S$0.94, pegged to 15x FY12F core earnings.

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DMG raises target price of OSIM to $1.59

Analysts:
Melissa Yap and Terence Wong, CFA

ronsim_chairman
Ron Sim, chairman & CEO, Osim International. Photo: Company

OSIM reported a 1% YoY growth in 4Q11 earnings to S$17.1m on the back of an 8% YoY growth in revenue to S$142.7m.

Stripping out the S$5m one-off asset gain in 4Q10, core earnings grew by 43%.

FY11 earnings rose 38% YoY to S$69.1m, on the back of a 9% growth in sales to S$553.7m. This however fell short of our expectations by 8% and 6% respectively largely due to more aggressive store rationalisation which saw the number of OSIM outlets decline by 16 to 592 in FY11.

We lower our FY12 sales and earnings by 10% and 8% respectively to take into account further store rationalisation, especially in regards to RichLife which currently has 104 outlets in 17 cities and would be scaled back to focus on seven key cities.

Focus going forward would be on store profitability rather than the number of stores hence we expect further margin expansion in FY12.

A final dividend of 1S¢ was declared bringing total FY11 payout to 3S¢.

We maintain our BUY call on the stock with a higher TP of S$1.59 (previous S$1.55), as we roll over our valuations to 15x FY12F.


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Comments  

#2 7197 2012-02-08 13:29
Osim is a share buyback believer. Today, bought back 1.551 m shares - but that didn't prevent the stock from closing lower. Oh well...
#1 C.C.Low 2012-02-08 08:45
IPC

Oei Hong Leong just bought 23m shares in IPC resulting in the counter shooting up from opening of 0.122 to 0.159 as at 2.05pm ! The highesh volume traded for this counter for a very long time.

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