Osim to roll out cheaper massage chairs to buck sluggish sales trend

Hiccups with existing models will be fixed.

Osim will roll out cheaper massage chairs to boost profits next year. According to Maybank Kim Eng, a cheaper, lighter version of its uDiva economy chair will be introduced next year, as the products current price point of $2,600 is still too high.

Osim will also introduce smaller products such as a $400 uSqueeze Air leg massager and a $200 massage product for the gluteal area.

“Management believes next year will be stronger for profits, albeit off a low base. It will continue to focus on its core massage chairs and accessories. It believes the chair business is still in an early stage of growth. Hiccups with existing models are known and will be fixed in the coming months,” noted Maybank Kim Eng. 

Here's more from Maybank Kim Eng:

Start-up costs for new central kitchens and retail stores in Taiwan and China could eat into margins in the next two quarters. However, management sees TWG Tea as a great brand with the potential to propel OSIM’s franchise beyond massage chairs as it builds a high-end retail lifestyle and well-being business.

Clients were aggressive in questioning management. We think they will take time to warm up to OSIM again after its 3Q disappointment. More time would be needed to iron out the kinks. However, OSIM has started to buy back its own shares, which was viewed as a positive sign that the company believes its stock is now attractively priced.