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Three Things To Like About Osim International

osimlogoSit back, put your feet up and relax. I am about to tell you three things to like about Osim International (SGX: O23).

To say that Osim International makes massage chairs is only partially correct. The company, which was founded by Ron Sim, does more than that. It also owns the health-supplement chain GNC and a stake in the luxury tea shops TWG Tea. That is the first thing to like about Osim – sensible diversification.

Of the 1,000-strong chain of retail outlets that the company operates, around half carry the Osim fascia. About one fifth bear the Brookstone marque and another one fifth are branded as GNC and RichLife stores. Osim International has put a lot of thought into its diversification strategy. It is all about health and well-being.

The second thing to like about Osim International is its outstanding Return on Equity. This has been achieved through a consistently high Net Income Margin that has also been improving over the last four years. In 2013, the company made $15 for every $100 of sales, which is on par with the market average. The margin for the 30 companies that make up the Straits Times Index (SGX: ^STI) is also around 15%.

The third thing to like about Osim International is its geographic spread. About half the company’s revenues come from North Asia, around a third from South Asia and the balance from the rest of the world. What’s more, revenues in North Asia have been increasing at a steady rate. Between 2009 and 2013, sales in its largest geographic segment, North Asia, have grown at about 8% a year.

There is a fourth thing to like about Osim International. Since 2009, when the company resumed its dividend after a two-year break, it has been increasing its payout to shareholders. The one-cent dividend in 2009 has ballooned to 6 cents last year.

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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 Director David Kuo doesn’t own shares in any companies mentioned.