Base on the chart, Osim is still trading on an long term uptrend with a resistance at $1.08. However, Osim may be pulled back in to the uptrend support at about $0.86 which is also a 78.6% FR level in the near term. Fundamentally OSIM financial performance is average.

Base on FY2009 Financial Result:

• Current PE = 28 at $0.975 (Overvalue)
• Sales Renevue YOY is degrading since 2006 (Big Concern to me as OSIM may be facing fierce competition and losing its competitive advantage!)
• Net Profit Margin = 4.9%  (This is bad for a company that sell BRAND!)
• ROA = 10.1 %  (OK)
• ROE = 24.2%  (Good)
• Current Ratio = 1.3 (OK)

OSIM does not meet my stock selection criteria and I view the OSIM stock price may plunge if the competive advantages cannot be sustained. We can see quite a number of competing brands in Singapore and definitely in China and price competition definitely is a headache to Osim. Osim has to reinvent itself to continue to push out more innovative products to otherwise they cannot survive in this market place. Things to watch out for: Osim has to constantly push out innovative and “WOW” products every quarter, otherwise their profit margin and sales revenue may be further eroded.