DMG raises target on Osim, keeps 'buy'

Stock Name: OSIM
Company Name: OSIM INTERNATIONAL LTD

Research House: DMG

Price Call: BUY

Target Price: 2.04

DMG & Partners Securities raised its target price for Osim International to $2.04 from $1.75 and maintained its ‘buy’ rating, saying investors have turned more confident about the company’s earnings.

Osim shares were down 0.3% at $1.80 on Thursday.

Two new massage chairs will drive Osim’s earnings for 2013-2014 fiscal years, DMG said. It added that China, where the massage chairs penetration rates are still at 1% despite having a growing pool of newly rich, is a key market for Osim.

DMG sees more sales in Osim’s nutritional supplements business, which is represented under GNC and the company’s own proprietary brand RichLife. It also sees growth in Osim’s luxury tea retailing business TWG.