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Singapore “Flyer” of the Week: Osim International Limited

This week sees massage-chair maker, OSIM (SGX: O23), steal the limelight as the Singapore “Flyer” of the Week. It closed at S$2.59 on Thursday, up 7% from where it was last Friday.

Near the end of January, the firm released its full-year results for 2013. Revenue for the year increased 8% to S$648 million while net earnings surged 17% to S$102 million. Higher consumer demand for the various OSIM products contributed to the positive results.

Around two weeks after the earnings release, there was a twist of fate and OSIM was hit by negative news.

It was announced that OSIM, together with Taha Bou Qdib, Paris Investment Private Limited and TWG Tea Company Private Limited, have been sued by The Wellness Group Private Limited and Manoj Mohan Murjani. The lawsuit pertains to the recent subscription for TWG Tea shares by OSIM and Paris Investment.

The Wellness Group and Manoj claimed that the issuance of shares diluted their respective shareholdings and is in breach of the terms of the shareholders agreement entered some time back. They (The Wellness Group and Manoj) have asked for the issuance of shares in TWG Tea to OSIM and Paris Investment to be set aside; for The Wellness Group to regain its shareholding percentage in TWG Tea; and for damages to be assessed. Currently, OSIM owns 70% of TWG Tea.

OSIM believes that that the allegations are baseless and has appointed Senior Counsel Davinder Singh of Drew & Napier LLC to fight for their innocence. OSIM secured the services of the well-known lawyer at the end of last month.

Currently, OSIM is trading at 18 times its historical earnings and has a dividend yield of 2%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.