Best World

(13-05-2016, 03:48 PM)CityFarmer Wrote:

(13-05-2016, 07:35 AM)Boon Wrote: For FY 2015, total AE incurred = SGD 27.161m
 
The PBT (or recurring EBITDA) margin arrived at for each segment (export or DS) is dependent on how the SGD 27.161 m is being allocated or apportioned between various segments.
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What is the AE? Advertising Expense or something else?

3 major cost components:
a)  COGS (~21% to 26% of revenue)
b)  Distribution Cost (DC) : main bulk of DC are commission paid to distributors ; annual convention cost. ( ~ 35% to 40% of revenue)
c)  Administrative Expenses (AE) : operating costs of HQ, overseas centre/office, rental, employee salaries – more fixed in nature.

No sales => no COGS incurred.
No sales => no DC (commission) incurred.
No sales => AE is incurred.


Basically,
PBT = Revenue - COGS - DC - AE

For export sales, DC ~ 0

But I am not sure how AE is being allocated between export and DS.............
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Another successful new product launch (Collagen Plus) in Taiwan in conjunction with Mother’ day celebration, which would hopefully boost 2Q2016 revenue
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20160506母親節暨膠原蛋白新品上市

By BWL Taiwan · Updated 20 hours ago

又到了全美世界ㄧ年ㄧ度的感恩母親活動，感謝創辦人Doreen親臨現場為膠原蛋白功效大解密，並讓新品上市活動締造出2200組的紅盤業績。活動內容不僅富有滿溢的愛，也讓現場許多嘉賓流下感動的淚水。
 
藉由全美世界的平台.課程與文化
讓我們學會更勇敢的去表達愛與感恩
 
祈願在全美世界，除了天倫親情外，無論組織上下線、旁線，體系跟體系以及體系與公司間的相處，都能以"愛"為中心，相互包容信賴，攜手共進，相信未來我們ㄧ定是全球最優質的直銷公司。
 
讓我們一起回顧這場溫馨感人的精彩花絮吧~
 
https://www.facebook.com/media/set/?set=...781&type=3
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(13-05-2016, 04:23 PM)Boon Wrote:

(13-05-2016, 03:48 PM)CityFarmer Wrote:

(13-05-2016, 07:35 AM)Boon Wrote: For FY 2015, total AE incurred = SGD 27.161m
 
The PBT (or recurring EBITDA) margin arrived at for each segment (export or DS) is dependent on how the SGD 27.161 m is being allocated or apportioned between various segments.
_________________________________________________________________________________________________________________

What is the AE? Advertising Expense or something else?

3 major cost components:
a)  COGS (~21% to 26% of revenue)
b)  Distribution Cost (DC) : main bulk of DC are commission paid to distributors ; annual convention cost. ( ~ 35% to 40% of revenue)
c)  Administrative Expenses (AE) : operating costs of HQ, overseas centre/office, rental, employee salaries – more fixed in nature.

No sales => no COGS incurred.
No sales => no DC (commission) incurred.
No sales => AE is incurred.


Basically,
PBT = Revenue - COGS - DC - AE

For export sales, DC ~ 0

But I am not sure how AE is being allocated between export and DS.............
____________________________________________________________________________________________________________________

OK. noted.

IMO, the AE is allocated accordingly to both DS and Export. The different is the distribution cost.

DS estimated cost = COS (-24%) + AE (-26%) + Dist (-36%), thus profit ~13% with rounding error.
Export estimated cost = COS (-24%) + AE (-26%), thus profit ~50% with rounding error.

What do you think?

(13-05-2016, 05:08 PM)CityFarmer Wrote:

(13-05-2016, 04:23 PM)Boon Wrote:

(13-05-2016, 03:48 PM)CityFarmer Wrote:

(13-05-2016, 07:35 AM)Boon Wrote: For FY 2015, total AE incurred = SGD 27.161m
 
The PBT (or recurring EBITDA) margin arrived at for each segment (export or DS) is dependent on how the SGD 27.161 m is being allocated or apportioned between various segments.
_________________________________________________________________________________________________________________

What is the AE? Advertising Expense or something else?

3 major cost components:
a)  COGS (~21% to 26% of revenue)
b)  Distribution Cost (DC) : main bulk of DC are commission paid to distributors ; annual convention cost. ( ~ 35% to 40% of revenue)
c)  Administrative Expenses (AE) : operating costs of HQ, overseas centre/office, rental, employee salaries – more fixed in nature.

No sales => no COGS incurred.
No sales => no DC (commission) incurred.
No sales => AE is incurred.


Basically,
PBT = Revenue - COGS - DC - AE

For export sales, DC ~ 0

But I am not sure how AE is being allocated between export and DS.............
_________________________________________________________________________________________________________________

OK. noted.

IMO, the AE is allocated accordingly to both DS and Export. The different is the distribution cost.

DS estimated cost = COS (-24%) + AE (-26%) + Dist (-36%), thus profit ~13% with rounding error.
Export estimated cost = COS (-24%) + AE (-26%), thus profit ~50% with rounding error.

What do you think?

If a same product (which costs the same dollar amount to produce) is selling at different price, COGS/price could not be the same at 24%.
______________________________________________
FY2015:Revenue
Total = 101.672 m (100%)
DS = 80.545 m (79%)
Export = 14.443 m (14%)
W/M = 6.694 m (7%)
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Export Model:
Assuming export price = 50
COGS = 24
Administrative Expenses (AE) = 0
ðRevenue booked by BWI = 50
ðPBT= 50 (sales) – 24 (COGS) - 0 (AE) = 26
ðMargin ~ 52%
 
This is very interesting:  even export price is being increased to 50% of DS price and AE is assumed to be zero, I could only get 52% PBT margin which is pretty close to the FY2015 figure of 50%.
 
Possible explanations/implications:
-      Product mix of exports to China cost much less to produce than Groups’s average COGS.
-      Proportionately lower % of AE is being allocated to the to export segment.
-      Export price could be at higher than 50% of Group’s average DS price now, but China’s DS price could be set higher than Group’s average
 
As mentioned earlier, the implicit assumptions “of same selling price and same cost structure across all geographical markets” in my model could be flawed.
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A bottleneck could be inventory issues. BWL TW recently ran a Mother's Day promo. It was for 2 weeks and after Week 1, many products were already out of stock. They had to tweak the promo for Week 2 to accommodate that.
 
Last year Q4 15 had the same issue of products insufficient to meet demand. Hopefully the new Tuas factory could be up and running in time for Q4 16.

(14-05-2016, 03:35 PM)namralk Wrote: A bottleneck could be inventory issues. BWL TW recently ran a Mother's Day promo. It was for 2 weeks and after Week 1, many products were already out of stock. They had to tweak the promo for Week 2 to accommodate that.
 
Last year Q4 15 had the same issue of products insufficient to meet demand. Hopefully the new Tuas factory could be up and running in time for Q4 16.

Similar "problem" happened when Pure Mask was launched back in March this year.

I don't think it is a bottleneck issue at production level (outsourced or could be produced in house).

It could genuinely be an "under-stock issue" due to "actual demand exceed expected demand".

BTW, 2,200 set of products were sold on the day Collagen Plus was launched in conjunction with Mother's day celebration. If they are referring to the 33,000 DP (or distributor price)  set, it translates into sales of TWD 72.6 m (~ SGD 3.0 m) in a single day which is impressive.
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the collagen plus is TWD4950 per set. 2200 sets would be TWD10. 89m = SGD.0.46m

collagen intake is recurring revenue if customer likes the product. (Same with most other products of BWL like nutrional products Avance, skincare Drs Secret). Hence it is important that management remain focus on good quality products and only then can more of the initial 'try-out' become recurring revenue.

http://websta.me/tag/全美世界

 
全美世界今年1～4月的目標設定為3.6億，
然而實際銷售量卻高達8.4億！
比預計的高出2.3倍🙊
雖然公司先前已經下足了約6～7億的貨量
結果還是不夠...
 
If the figures are reliable
 
Taiwan Revenue (SGD million)
1Q2014 =  2.418   (= 11% of FY2014 Revenue)
2Q2014 =   4.157      (= 18% of FY2014 Revenue)
3Q2014 =   4.940      (= 22% of FY2014 Revenue)
4Q2014 = 11.196      (= 49% of FY2014 Revenue)
1Q2015 = 4.465     (=  8% of FY2015 Revenue)
2Q2015 =  10.244      (=  18% of FY2015 Revenue)
3Q2015 =  14.125     (=  25% of FY2015 Revenue)
4Q2015 =  27.559     (=  49% of FY2015 Revenue)
1Q2016 =  20.221     (=  Y % of FY2016 Revenue) (~ TWD 485 m)
 
First 4 months of 2016 = TWD 840 m (~SGD 35 m)
ðApril 2016 revenue = TWD 355 m (~SGD 14.8 m) or 73% of 1Q2016 revenue
VERY impressive………………………… 

It appears that sales in May could just be as strong (with new product launched + mother’s sales activities). This would likely propel 2Q2016 revenue into the new record territory ( > 4Q2015 revenue of SGD 27.559 m) 
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(12-05-2016, 04:47 PM)CityFarmer Wrote: I got to know this stock from Boon's post. Thank you Boon.

Let's do a simple reality check on Boon projection, with an assumptions. The price to final consumers, should remain the same, in the shift from export, to Direct Selling channel. In other words, Best World and the Saloon Owners/Distributors, will re-balance their shares, during the channel shift. I am skeptical, Best World can keep all the gains from the shift, on the expense of the down-line Saloon Owners/Distributors, without any damage on the relationship.

I do agree the company, is more scale-able, than the existing export channel, once the license approved.

What do you think?

(not vested, but monitoring)

To my understanding, BWI could push its export sales to China more aggressively but is not doing so because under the current export model, BWI has no control over the final price its China agents charge to the final consumer.

Once a DS license is granted, product pricing and distributors commission would be set and unified by BWI under the DS model. 

All its China agents/Saloon owners who have agreed to be converted into DS distributors would have to play by the new rules set by BWI under the DS scheme - otherwise their business relationship would have to be terminated. 
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Some updates on Taiwan sales. For Apr & May (ytd) sales is approaching TWD600m (estimate SGD24M). Q2 16 looks sets to beat Q4 15 Taiwan revenue of SGD27.6m.