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Peggy Sito

Osim International -  the Singapore-listed company that specialises in health and relaxation products such as massage chairs - plans to list on the Hong Kong exchange, probably next year.

Chairman and chief executive Ron Sim said the company hoped to broaden its base of international investors and accelerate expansion in China with the planned flotation.

With Hong Kong's close proximity to China, the proposed listing could help Osim capture added market share in the mainland, Mr Sim said.

ICEA has been named the financial adviser for the proposed flotation.

Mr Sim said the company had not formally submitted a listing application to the Hong Kong stock exchange but added: 'The listing is highly likely to be seen next year.'

Osim has its headquarters in Singapore and more than 375 outlets throughout the Asia-Pacific region, Britain, Australia, the United States and Canada.

But its major profit contributors are several Asian markets including China, Hong Kong, Singapore, Taiwan and Malaysia.

In the first nine months of this year, the company's net profit was up 53 per cent year on year to S$11.6 million (about HK$51 million). Turnover rose 41 per cent to S$173.6 million.

'Hong Kong is the biggest market for Osim in terms of turnover,' said Mr Sim, but he added overall operating costs in the SAR were relatively high compared with other countries.

A new source of growth would be China in the next five to seven years in view of the increasing wealth of urban residents, he said.

Osim first entered China in 1993 and today has 82 retail outlets in 18 key cities.

Osim's sales in China have grown 10-fold over this period to US$11.6 million last year.

'The company aims to double the number of outlets to 150 by the end of next year,' Mr Sim said. The costs of opening a store ranged between US$50,000 and US$150,000, he said.

As part of its expansion in China, Osim has signed actress Gong Li to promote its products.

Her popularity in the Greater China region would help the company to expand its business, Mr Sim said.

He said the company's strategy was similar to Nike as it did not manufacture any products but out-sourced instead to manufacturers from Japan, Italy and China. The company's resources would mainly focus on branding and distribution, he said.



Health retailer Osim plans HK listing