Review: Osim

As requested by one of the readers, here is my take on Osim.

Look at this report.

2005 Annual Report


It looks really good. Turnover, profits and EPS has increased at an impressive rate. The company has been coming up with new products, and Singaporeans will know they are one of the most actively marketed companies here in our island.

However, look between the line.

3rd Quarter Report

Doesn't look that good anymore. 3rd Quarter profits has become negative. 9 month profit has also become negative. Needless to say, the EPS has dropped from 2005.

There are 2 reasons i can think of that gave Osim good results in 2005. First, there might be a one off gain by offloading some of it assets. Secondly, there has been an unsustainable growth in sales, which i can't really confirmed cause i don't think this stock is worth looking at.

Give I might have vested into this stock if i had saw the 2005 report, provided the profit growth was not from an one off gain. However, you should be glad if you did not invest in Osim then.

"One off gains should be taken out of a company's profits, and EPS when analysing."

Based on my investing model, I advise against investing in Osim. There isn't sustainable earning growths, yet. Until next time, there are other stocks to look at.