Singapore Stock Picks: Osim International BUY TP(SGD2.60)

OSIM International: SGD2.39 BUY (TP: SGD2.60) Growth Momentum To Continue OSIM's 4Q13 PATAMI surged 22.1% y-o-y to SGD27.6m, on the back of strong revenue growth of 15.5% y-o-y. The PATAMI growth was boosted by a SGD42m FV gain at its subsidiary, TWG Tea. Business volume is expected to remain positive, supported by the region's demand for lifestyle products. We are keeping our BUY recommendation and DCF based TP of SGD2.60. Revenue growth likely to continue. OSIM's 4Q13 results met our expectations. The revenue growth was attributed to healthy take-up rates of its products, particularly uInfinity and uAngel, as well as contributions from TWG Tea (TWG), which became a subsidiary in 4Q13 after OSIM increased its stake in TWG to 53.7%. OSIM subsequently raised its stake further to 70%. We expect continued revenue growth for FY14-15, as OSIM is set to benefit from rising demand for its products given its ongoing marketing initiatives, as well as from increased y-o-y contributions from TWG. Outlook to remain healthy. OSIM has been sticking to its strategy of riding on celebrity appeal to reach out to customers in the region, which so far has paid off for the company. We believe this strategy would continue to work well, as OSIM has established itself as Asia's No.1 brand in well-being and healthy lifestyle products, supported by rising purchasing power of households in the region, especially China. Maintain BUY, SGD2.60 TP. OSIM declared a final dividend of SGD0.02/share, bringing the total dividend for FY13 to SGD0.06/share. We remain positive on OSIM as it is a proxy to the region's growing demand for lifestyle products. Its balance sheet