No respite for OSIM until at least 2017 as headwinds mount, analysts say

A perfect storm is brewing for the firm.

OSIM’s bottomline getting halved by 2015 may be just the first salvo of a terrifying hurricane it has to endure in the next two years, as analysts note a laundry list of headwinds coming the firms’ way.

According to analysts from UOB Kay Hian, economic uncertainties are bound to weigh on consumer sentiment and retail sales, especially on OSIM’s lifestyle equipment.

“The yoy growth in the retail sales index for the furniture and household equipment segment in Singapore fell for three consecutive months until Nov 15, a trend similar as in Hong Kong,” UOB Kay Hian said.

Additionally, UOB Kay Hian said the ringgit weakness and GST implementation might dent OSIM’s Malaysia sales drastically.

Meanwhile, OSIM plans to expand its TWG business in 2016 with 15-20 new stores.

“Using a rough estimate by management that half of the S$10.1m legal fees were borne by the 70%-owned TWG subsidiary, operating losses for the business would have been manageable at S$0.65m. OSIM ended the year with 52 TWG outlets and expects to add another 15-20 stores in 2016,” UOB Kay Hian said.

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