OSIM launches massive share buyback scheme to rescue flagging share price
It bought 1.3m shares yesterday.
OSIM International has embarked on a massive share buyback scheme in a bid to support its flagging share price, which has fallen by 10.3% from $2.08 since the third week of March.
According to OCBC, the group bought back around 1.3 million shares at $1.865 per unit yesterday evening, seeking to support this price level.
OCBC analyst Jodie Foo noted that although there are no concrete explanations for the weakness, key reasons for the decline could include weak macroeconomic data from China and The Capital Group Companies’ move to pare its stake in OSIM slightly from 5.021% to 4.994%.
“We keep in mind that the group is still in the midst of two legal disputes, thus they may eventually incur legal costs, and potentially evoke kneejerk reactions to its share price. In the meantime, start-up costs, wages and rental costs may continue to hold back any significant bottom-line growth for this segment. Downside risks could come from unexpected non-performing store closures for TWG Tea and slowdown in pace of new store openings,” Foo wrote.