Singapore’s Big Loser of the Week: OSIM International Ltd

This week’s big loser happens to be health and wellness firm, OSIM International Ltd  (SGX: O23). Shares of the company had slumped by 17.1% during the week to end Friday at S$1.36. This is certainly a far cry from the 2.3% decline seen in the Straits Times Index  (SGX: ^STI).

OSIM, which was founded by local entrepreneur Ron Sim, develops and markets well-being and healthy lifestyle products, fitness equipment, diagnostic products, vitamin & supplements, and luxury tea by way of its retail outlets located in many different parts of the world.

On 27 October, the company announced its financial results for its fiscal third-quarter ended 30 September 2015. The numbers didn’t look too nice.

Revenue for the latest period tumbled by 11% to S$142 million from S$158 million a year ago. The reason cited was soft markets across the region. However, OSIM added that the launch of a new product, uMagic, had “some positive impact”.

As noted by my Foolish colleague, Chin, “this is the third time in as many quarters that OSIM has experienced double digit revenue declines”.

Moving down the income statement, net profit softened 62% year-on-year to S$6 million on the back of startup and operational costs at TWG Tea, OSIM’s luxury tea retail arm. Legal fees related to a case surrounding the tea purveyor had taken a toll on the bottom-line as well.

Looking at a quarter-on-quarter basis, OSIM’s net profit also suffered as it fell from S$22 million in the quarter ended 30 June 2015 to the aforementioned S$6 million. This translates to a fall of some 70%.

Despite the current numbers, OSIM said it remains “cautiously optimistic on the prospects for the remainder of the year following the launch of uMagic in key markets and upcoming planned product launches.”

On a separate note, Ron Sim will be investing S$8 million of his own cash in the initial public offering (IPO) of well-known local seafood restaurant chain, Jumbo Group Limited. The restaurant, famous for its chili crabs, is looking to raise around S$40 million from its IPO.

OSIM International is currently valued at 15 times its historical earnings and has a trailing dividend yield of 4.4%.

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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.