Best World

(09-06-2016, 10:27 AM)mslee888 Wrote: As Reported in the Straits Times today...

http://www.straitstimes.com/business/com...s-from-sgx

[Image: 2ngvog2.jpg]
NPAT (SGD, million)

Hi mislee888,
 
Thanks for the report.
 
Between 2013 and 2015, NPAT grew 610% while share price grew only 60%. There was misalignment in share price and fundamentals – share price lags fundamentals.  The report completely missed out on this.
 
Much of share price appreciation took place in1H of 2016, which the report has been focusing on.  To me, much of this could be explained by share price playing catch-up with fundamentals or re-alignment of share price with fundamentals.
 
Share price is much re-aligned with fundamentals now than before I reckon, but has it gone too far ahead? Has excessive earning growth expectations been priced in? I guess the debate on this would continue………………………
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Hi Boon

I agree with your take. 
Company has been more engaging with broker houses and this create more market awareness on its stock, ultimately this leads to more demand.
I feel its fundamentals are pretty sound so price could be catching up with valuation too.

I think we cannot forget greed and fear. Boon has a lot of research in this company. how about current buyers? buying on speculation? pump and dump? or they really understand the business and willing to hold it for at least 10 years. just a thought crossing my mind.

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(09-06-2016, 03:38 PM)Life is a game Wrote: I think we cannot forget greed and fear. Boon has a lot of research in this company. how about current buyers? buying on speculation? pump and dump? or they really understand the business and willing to hold it for at least 10 years. just a thought crossing my mind.

Sent from my SM-N9005 using Tapatalk

What is the dominant emotion with Best World share market? I am not sure. I guess a lacking of stickiness, probably one of the fears.

I read in AR2013, the management highlighted validation of its strategy, with progress in "Taiwan", "China", "Philippines" and "Myanmar". 

Fast-forward to AR2014, "Myanmar" was dropped from a similar statement, and "Taiwan", "China", and "Philippines" remained. In FY2014, Philippines biz was booming, with a 6x growth in sales. 

How about in AR2015? I saw only "Taiwan" and "China" remained, while "Philippines" was dropped, with its sales collapsed almost back to FY2013 level. 

What will happen in FY2016? I don't know, may be nothing will change.

A broad regional coverage, and product ranges, might smooth up the volatility. I did take note on Taiwan DS sales, which had more than half of total DS sales. China biz was close to 20% of total sales. I wonder what will happen to the company sales, when negative events are triggered in the two markets.

What do you think?

(not vested)

Today share price came down 22% and it has been while since BWL had meaningful corrections since the beginning of the year. It is good to let off some 'steam' and in my view the share price climb was too fast.

Amway entered Taiwanese market in 1982 and today they are still around as No. 1, therefore it is possible that BWL can have staying power in Taiwan provided they execute the right strategies and moves. BWL is relatively 'young' in this sense, having broken into Top 15 since entering in 2009.

Wow, it only took 5,437,300 shares (5% of free float) traded to wipe off 31.5 cents (or -22.9%) of the share price to close at 1.06 a share.
 
Looking at the share price charts, 1.06 was achieved about 12 or 13 trading days ago.  Pump or dump, panic selling, reality check or …………………..? It looks to me that it was driven more by momentum investors.
 
But this is nothing new!
 
Dropping 31.5 cents a day for 3 more trading days, it would be down to 11.5 cents, lower than the GFC price of 16.5 cents.
 
Overbought then, oversold now or ……………………? Who knows?
 
The focus should still be on the fundamentals of the company, I reckon.
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(09-06-2016, 06:16 PM)Boon Wrote: Wow, it only took 5,437,300 shares (5% of free float) traded to wipe off 31.5 cents (or -22.9%) of the share price to close at 1.06 a share.
 
Looking at the share price charts, 1.06 was achieved about 12 or 13 trading days ago.  Pump or dump, panic selling, reality check or …………………..? It looks to me that it was driven more by momentum investors.
 
But this is nothing new!
 
Dropping 31.5 cents a day for 3 more trading days, it would be down to 11.5 cents, lower than the GFC price of 16.5 cents.
 
Overbought then, oversold now or ……………………? Who knows?
 
The focus should still be on the fundamentals of the company, I reckon.
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I concur. The focus should still be on fundamentals, rather than price movement.

I recall, Blumont's share price had proven me "very wrong", during a verbal discussion in 2013. I was tagged as "value investor", who knew value stock, but knew nothing on growth stock  

(not vested)

(09-06-2016, 04:27 PM)CityFarmer Wrote:

(09-06-2016, 03:38 PM)Life is a game Wrote: I think we cannot forget greed and fear. Boon has a lot of research in this company. how about current buyers? buying on speculation? pump and dump? or they really understand the business and willing to hold it for at least 10 years. just a thought crossing my mind.

Sent from my SM-N9005 using Tapatalk

What is the dominant emotion with Best World share market? I am not sure. I guess a lacking of stickiness, probably one of the fears.

I read in AR2013, the management highlighted validation of its strategy, with progress in "Taiwan", "China", "Philippines" and "Myanmar". 

Fast-forward to AR2014, "Myanmar" was dropped from a similar statement, and "Taiwan", "China", and "Philippines" remained. In FY2014, Philippines biz was booming, with a 6x growth in sales. 

How about in AR2015? I saw only "Taiwan" and "China" remained, while "Philippines" was dropped, with its sales collapsed almost back to FY2013 level. 

What will happen in FY2016? I don't know, may be nothing will change.

A broad regional coverage, and product ranges, might smooth up the volatility. I did take note on Taiwan DS sales, which had more than half of total DS sales. China biz was close to 20% of total sales. I wonder what will happen to the company sales, when negative events are triggered in the two markets.

What do you think?

(not vested)

 
Corporate Milestones
- Founded in 1990
- Opening of first business centre in Malaysia in 1998
- Listed on SGX in 2004
- Entered into Thailand Market in 2004
- Expanded into Vietnam with new lifestyle center in 2005
- Expanded outside South East Asia with Hong Kong Regional Center in 2006
- Expanded into Taiwan Market in 2006
- Grand launch of Indonesia Market in 2007
- Entered into Korea Market in 2009
- Ventured into Philippines in 2010
- Completed acquisition of Zhejiang SolidGold Pharmaceutical Co., Ltd. in 2014
- Established a Joint Venture in Dubai, the United Arab Emirates in 2016
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Well, BWI is considered a relatively a young company – established 26 years ago but only manage to raise more capital from the market via listing in 2004 for its business expansion including regional expansions.
 
Since listed, it has put in efforts to increase its geographical spreads from 2 countries (in 2004) to 12 countries (in 2016), the latest being a JV establishment in Dubai.
 
From diversification point of views, this has improved a great deal as it used to rely on 3 countries only (Singapore, Malaysia and Indonesia) for its top and bottom lines.
 
No doubt, it has different success in each country it has set foot on. Each country has its market specific challenges that require time (gestation period) to develop including learning from earlier mistakes.
 
China has the greatest long-term market potential – in terms of size and also purchasing power – and BWI has been trying for more than 10 years to crack this market.
 
Taiwan is considered the most successful market so far – high purchasing power but a very competitive market.
 
From potential returns vs resources allocation perspective, it makes sense for BWI to prioritize China and further strengthen its grip on the Taiwan market with more time and efforts being put in to further develop these two markets.
 
Like it or not, if a DS license could be granted, China could potentially be contributing more than half of BWI’s top and bottom line in the long run - high market concentration risk indeed - but who could “say no” to the potential return of this massive market.
 
BWI may have to put in a lot more efforts and resources to develop all of its other markets (excluding China and Taiwan) to achieve the same returns as in China and Taiwan. It is probably easier to generate SGD 100 m revenue in China or Taiwan alone than to generate SGD 10 m each from the other 10 markets now, but I believe these markets are not being neglected as can be seen from the rebound in Indonesia market.

Between higher total absolute returns ( with higher market concentration risks) vs lower total absolute return (with low market concentration risks), it makes sense to grab the "former" first and worry about the "diversification of market concentration risks " later, I reckon.
 
For further insights, this is a good read:
http://tw.bwlgroup.com/tchinese/whatson_feature.jsp#&gid=1&pid=6
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Best World's shares dive following SGX query
http://www.straitstimes.com/business/bes...-sgx-query
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China’s cosmetics market
June 2015
Fung Business Intelligence Centre
http://www.iberchina.org/files/cosmetico...a_fung.pdf

-The low penetration and cosmetics consumption per capita suggest that China’s cosmetics market has plenty of room for growth.
- Social connection is important in Chinese culture as Chinese consumers are highly relationship- oriented. They incline to pay more attention to the recommendation from friends. Word of mouth therefore heavily affect the brand preference and buying decision of Chinese consumers*.
- Product safety is a major concern in China’s cosmetics market.
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