Eu Yan Sang profit balloons 318% to S$1.4m

Recovery firmly on track.

According to OSK-DMG, strong sales growth in Hong Kong and Australia are propelling Eu Yan Sang (EYSAN) forward, helping it post a S$1.4m net profit during 1QFY14.

Near-term prospects look bright, with the research firm predicting FY14F-15F earnings to grow by 27-50% to S$18.7m-28.0m, respectively.

For 1QFY14, EYSAN recorded revenue of SGD80m fuelled mostly by a 26% rise in Hong Kong sales to SGD37m, buoyed by its strong retail and wholesale segments, said OSK-DMG.

"A higher number of Chinese tourists lifted demand for its Bo Ying Compound, a traditional Chinese remedy for paediatric discomfort, as well as other Eu Yan Sang branded products. Nonetheless, this was partially offset by a 2% dip in Singapore’s contribution (to S$17.5m) on cautious consumer spending. Sales in Australia rose 16% to S$9.9m, equivalent to a 30% increase in local currency terms," added OSK-DMG.

The research firm predicts further earnings improvements in the following 2Q and 3Q, with a predicted expansion of 16-14% yoy to SGD5.4m-9.6m for the respective periods.