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Stocks In Focus (Singapore Technologies Engineering, OSIM International, Eu Yan Sang International) – 08/05/13
ST Engineering Reports Flat Results
Integrated engineering group Singapore Technologies Engineering recorded a relatively flat performance for the first quarter ended 31 March 2013. Revenue edged 0.3 percent higher to $1,544.7 million while net profit was down 0.3 percent at $134 million. Lower revenue contributions from its Electronics sector as well as ST Synthesis and Miltope cancelled out rises in Land Systems, Aerospace and Marine sectors. Fewer and lower value project milestone completions were the main drag. The absence of contribution from an associate with profit from Singapore Airshow 2012 also affected profitability. Commenting on the results, president and chief executive officer of ST Engineering, Tan Pheng Hock, said “We continue to build on the group’s robust financial position with improved cash and cash equivalents including funds under management of $2.5 billion.”
Significance: Successful securing of contracts lifted ST Engineering’s order book to a record $13 billion, which will drive results going forward. For the next nine months of fiscal year 2013, the company expects to deliver $3.6 billion of the order book.
OSIM Achieves 17 Successive Quarters Of Record Profits
For the first three months of the fiscal year 2013, OSIM International posted a 13.2 percent rise in net profit to $25.1 million, up from $22.2 million in the year-ago period. This marks the seventeenth consecutive quarter that the lifestyle products group has registered record profits. The drivers behind the stronger performance mainly came from strong sales coming from its new uAngel chairs, better product mix and higher productivity. Revenue for the first quarter was flat, inching up 0.4 percent to $150.6 million from $150.1 million. A dividend per share of 1 cent has be declared. Looking ahead, the company plans to launch a premium chair in the second half of the year. As at 31 March, the firm operates 596 OSIM outlets, 252 GNC/RichLife outlets, 267 Brookstone outlets and 17 TWG outlets. OSIM operates in 34 countries around the world.
Significance: Reactions from the market were muted as shares of OSIM opened today’s session unchanged at $2.03 from yesterday’s close. With the biggest growth driver still its core business of chairs and strong market position in China, OSIM is targeting revenue to grow by 10 percent, compared to last year’s 9 percent.
Eu Yan Sang 3Q13 Net Profit Up Y-o-Y
Eu Yan Sang International announced net profit for 3Q13 was up by 53.9 percent to $8.4 million. The revenue of the company for the quarter reached its all-time high at $101.2 million, breaking the $100 million level for the first time. One main contribution to the increase in profits was the stronger retail sales from Hong Kong and Malaysia due to the later Chinese New Year holiday which enabled more selling days and lower administrative expenses. The Hong Kong and Malaysia markets have seen 8.4 percent and 13.4 percent growth in sales respectively in local currency terms, due to the sale of festive hamper. Healthy Life Group (HLG), the company’s wholly owned subsidiary in Australia, recorded its fourth consecutive growth in sales quarter-on-quarter with 3Q13 at A$7.2 million. The inclusion of HLG to the wholesale business brought about an increment of 10.7 percent to $12.4 million on the group’s wholesale business. The results gave a boost to the performance in 9M13. For the cumulative period, revenue was up 13.3 percent at $249.6 million while earnings grew 86.5 percent to $13.4 million.
Significance: Eu Yan Sang expects slower growth in sales for the next quarter in its core markets as it grapples with higher cost of operations. However, the group will be ramping production in Hong Kong by building a new factory as they remain confident in the growth of sales in China.
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