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07-08-2018, 08:41 PM
(This post was last modified: 08-08-2018, 05:45 AM by Boon.)
2Q2018 Results is out which doesn't look good, as expected.
The surprise was in membership
Previous reported DS membership include members under China export segment ?????????????????????????????????????????????
Are you kidding me?
How did BWI "keeps track of its consumer members under the Export Segment in China" ?
Consumer members under China Export segment has been grouped under DS membership.
This seems to be a validation that, "the Export model" was indeed a "DS model in disguise".................Ha-ha!
1Q2018 Results:
As at 31 March 2018, total membership for the Group’s Direct Selling business increased 2.1% to 500,259 members as compared to 31 December 2017. Active distributors, which refers to members who have received commission over the last 12 months stands at 9.8% of total membership.
2Q2018 Results:
Prior to the Group’s transition into the Franchise Segment in China, the total number of members disclosed in the quarterly results announcement comprised (1) members under the Direct Selling Segment, and (2) consumer members under the Export Segment in China. Going forward, the disclosure on the Franchise Segment will focus on the number of franchisees only as management is of the view that the number of franchisees is a more accurate indicator of the Franchise Segment’s distribution capabilities in China.
As at 30 June 2018, there are 27 franchisees that our China subsidiary had entered into agreement with. These franchisees’ operations cover 10 provinces and one municipality including that of Zhejiang, Sichuan, Guangdong, Henan, Heilongjiang etc.
In line with the above changes, the Group will disclose only the total members of our Direct Selling Segment (i.e. excluding China consumer members).
As at 30 June 2018, the Group had 97,892members for its Direct Selling business
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.
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(07-08-2018, 08:41 PM)Boon Wrote: 2Q2018 Results is out which doesn't look good, as expected.
The surprise was in membership
Previous reported DS membership include members under China export segment ?????????????????????????????????????????????
Are you kidding me?
How did BWI "keeps track of its consumer members under the Export Segment in China" ?
Consumer members under China Export segment has been grouped under DS membership.
This seems to be a validation that, "the Export model" was indeed a "DS model in disguise".................Ha-ha!
1Q2018 Results:
As at 31 March 2018, total membership for the Group’s Direct Selling business increased 2.1% to 500,259 members as compared to 31 December 2017. Active distributors, which refers to members who have received commission over the last 12 months stands at 9.8% of total membership.
2Q2018 Results:
Prior to the Group’s transition into the Franchise Segment in China, the total number of members disclosed in the quarterly results announcement comprised (1) members under the Direct Selling Segment, and (2) consumer members under the Export Segment in China. Going forward, the disclosure on the Franchise Segment will focus on the number of franchisees only as management is of the view that the number of franchisees is a more accurate indicator of the Franchise Segment’s distribution capabilities in China.
As at 30 June 2018, there are 27 franchisees that our China subsidiary had entered into agreement with. These franchisees’ operations cover 10 provinces and one municipality including that of Zhejiang, Sichuan, Guangdong, Henan, Heilongjiang etc.
In line with the above changes, the Group will disclose only the total members of our Direct Selling Segment (i.e. excluding China consumer members).
As at 30 June 2018, the Group had 97,892members for its Direct Selling business
Does that mean that they have 400,000+ members under the export segment in China? That's a huge number. What intrigues me more is that their franchisees cover more than 10 provinces, which their Direct Selling License does not cover. There was always the belief that there is room for growth in China due to it being a new market for Best World. From the 2 figures mentioned, this does not seem the case with 400k members and 10 provinces covered. Remember they also mentioned that they would only go for the 2nd tier cities as well? That makes me wonder how far from the peak they are at for China. It can get really ugly past the peak like what happened in Taiwan, Singapore, Indonesia and any other country they had a sizable presence before.
And that's putting aside whatever doubts we have on their business practices in China.
Please do your own due diligence. Any reliance on my posts is at your own risk.
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2Q2018 Results:
China Revenue (SGD million) = Export Revenue + MW Revenue:
1Q2014 = 2.195
2Q2014 = 3.296
3Q2014 = 3.117
4Q2014 = 4.372
(FY2014 =12.980) (Export=5.912 ; MW= 7.068)
1Q2015 = 3.088
2Q2015 = 5.366
3Q2015 = 4.805
4Q2015 = 6.512
(FY2015 =19.771) (Export = 13.077 ; MW = 6.694)
1Q2016 =10.566 (Export = 9.609 ; MW= 0.957)
2Q2016 =11.813 (Export =10.777 ;MW =1.036)
3Q2016 =19.641 (Export =18.563 ; MW=1.078)
4Q2016 =15.841 (Export =14.249 ; MW =1.592)
(FY2016 = 57.861) (Export= 53.198 ; MW = 4.663)
1Q2017= 21.417 (Export = 20.555 ; MW = 0.862)
2Q2017= 26.552 (Export = 25.307 ; MW = 1.245)
3Q2017= 26.187 (Export = 24.051 ; MW = 1.068)
4Q2017= 36.305 (Export = 34.945 ; MW = 1.360)
(FY2017=110.462) (Export = 105.927; MW = 4.535)
1Q2018 = 6.809 (Export = 6.005 ; MW = 0.804)
2Q2018 = 6.205 (Export = 4.321; MW= 1.043 ; Franchise = 0.841)
Page 14 of 2Q2018 Results:
“In line with last quarter’s announcement, the Group completed its transition phase in China from the Export Segment to the FranchiseSegment in 2Q2018. However, as a result of strong demand in China in 2Q2018, the Group had to export certain SKUs which were in critically low supply to its agent in China. As a result, $4.5 millionof Export Revenue was recorded.”
Comment#1:
In 1Q2018 results, it talked about transition from Export Segment to China Wholesale segment, nothing was mentioned on “Franchise segment”, these are two different models altogether, aren’t they?
Comment # 2:
China revenue for 2Q2018:
Total = 6.205 m
MW = 1.043 m
Franchise = 0.841 m
ðImplied China Export revenue = 6.205 – 1.043 – 0.841 = 4.321 m , NOT 4.5 m
Again, they couldn't count……
Page 16 of 2Q2018 Results:
“As mentioned previously, due to the transition towards the new Franchise business segment resulting in delayed revenue recognition, revenue from China decreased from $26.6 million in 2Q2017 to $6.2 million in 2Q2018.
Notwithstanding the foregoing, demand for our products continues to grow in China. The aggregate SKUs sold to our franchisees in 1H2018 is significantly higher than the SKUs sold by our agent to the DR’s Secret Experience Centers in 1H2017, consistent across all of our core products. “
Comment # 3:
“The aggregate SKU sold to our franchisees in 1H2018 is significantly higher than………….”, which only translate into “Franchise revenue of 0.841 m”…………Ha- Ha ! How could that be ?
Page 18 of 2Q2018 Results:
“While the Franchise Segment will replace the Export Segment from 2H2018 onwards, the agent in China has remaining inventory which is expected to be completely depleted by mid-3Q2018. As such, Revenue from Franchise Segment in 3Q2018 does not fully represent the financial performance of our China business for the entire quarter;“
Comment # 4:
FY2017 China Export revenue = 105.927 m
1H2018 China Export revenue = 10.326 m
1H2018 China Franchise revenue = 0.841 m
2H2018 China Export revenue = 0
FY2018 China Export revenue = 10.326 m (~ 10% of FY2017)
2H2018 China Franchise revenue = F
What “F” has to be such that FY2018 profit contribution from China would exceed that of FY2017?
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.
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(10-11-2014, 10:40 PM)Oidyllic_yawster Wrote: People @ NextInsight are bullish on Best World....
http://www.nextinsight.net/index.php/for...=366#21212
Vested.
Like Best World for the intrgrity, professional competence and shareholder friendliness of Management and Founders.Believe the business they are in has potential in China.
They own the brands.Cash Flow from operations is up , which is a good sign.
Expect this year to be down on Revenue but up at the Net Profit Level as the switch from Export
To Wholesale level finally works its way through.but not fully until q1 2019.
Also the selling price and margins should be higher with the new model, and there is less risk of overstocking as sales mirror more closely sales to the consumer.srick with it! PGL
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How many shareholders really understand their explanations on Export Model, Wholesale Model or Franchise Model?
It is getting too complicated... haha 
(Not a recommendation to buy or sell, just stating facts)
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09-08-2018, 12:08 AM
I benefited tremendously from your contributions.
Really appreciate all your help to identify an excellent company.
I recognised that BWL is going through a very difficult time.
Dora, Doreen and HBC is trying their best to navigate the complex China Direct sell (DS) market.
Franchise model, most likely formulated as they understood the challenges to push forward with DS.
Definitely not their choice to give up on DS, if only they can see some meaningfully way to benefits from DS in China context.
It's tough operating in China.
宝贝加油!
Let's see some quotable quotes from yesterday result announcement:
Quote:Notwithstanding the foregoing, demand for our products continues to grow in China.
The aggregate SKUs sold to our franchisees in 1H2018 is significantly higher than the SKUs
sold by our agent to the DR’s Secret Experience Centers in 1H2017, consistent across all of
our core products.
With market demand for the Group’s products in China being stronger than before and with
contribution from the Group’s operations in Taiwan, Indonesia, Hong Kong and Singapore,
barring any unforeseen circumstances, the management is still cautiously optimistic that the
Group will be able to register bottom line growth for FY2018, despite having recorded lower
revenue during the transition phase in 1H2018.
... agent in China has remaining inventory which is expected to be completely
depleted by mid-3Q2018. As such, Revenue from Franchise Segment in 3Q2018 does
not fully represent the financial performance of our China business for the entire
quarter...
Summary:
1. Revenue will be lower in FY18 compare to FY17 due to revenue recognition
2. Bottomline (profit) growth will be comparable (same) to FY17.
Extracts:
1. Revenue drop significantly
2. Gross profit and net profit drop significantly
3. EPS drop significantly
4. However, Gross profit margin and Net profit margin is growing
5. Cash at 90m is growing
6. Dividend of 1.2 cents is lower (compare to 1.5cents last year)
7. Inventory is building up as there should be zero export model in China
8. Trade receivable drop significantly due to payment received
Overall, BWL numbers is in tact and we need to wait for a longer time to reap benefits of DS.
And, of course, unlikely Franchise will replace DS, right?
Anyway, since, it's Singapore National Day, let me wish all valuebuddies a peaceful holiday.
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(08-08-2018, 03:08 PM)Boon Wrote: 2Q2018 Results:
China Revenue (SGD million) = Export Revenue + MW Revenue:
1Q2014 = 2.195
2Q2014 = 3.296
3Q2014 = 3.117
4Q2014 = 4.372
(FY2014 =12.980) (Export=5.912 ; MW= 7.068)
1Q2015 = 3.088
2Q2015 = 5.366
3Q2015 = 4.805
4Q2015 = 6.512
(FY2015 =19.771) (Export = 13.077 ; MW = 6.694)
1Q2016 =10.566 (Export = 9.609 ; MW= 0.957)
2Q2016 =11.813 (Export =10.777 ;MW =1.036)
3Q2016 =19.641 (Export =18.563 ; MW=1.078)
4Q2016 =15.841 (Export =14.249 ; MW =1.592)
(FY2016 = 57.861) (Export= 53.198 ; MW = 4.663)
1Q2017= 21.417 (Export = 20.555 ; MW = 0.862)
2Q2017= 26.552 (Export = 25.307 ; MW = 1.245)
3Q2017= 26.187 (Export = 24.051 ; MW = 1.068)
4Q2017= 36.305 (Export = 34.945 ; MW = 1.360)
(FY2017=110.462) (Export = 105.927; MW = 4.535)
1Q2018 = 6.809 (Export = 6.005 ; MW = 0.804)
2Q2018 = 6.205 (Export = 4.321; MW= 1.043 ; Franchise = 0.841)
Page 14 of 2Q2018 Results:
“In line with last quarter’s announcement, the Group completed its transition phase in China from the Export Segment to the FranchiseSegment in 2Q2018. However, as a result of strong demand in China in 2Q2018, the Group had to export certain SKUs which were in critically low supply to its agent in China. As a result, $4.5 millionof Export Revenue was recorded.”
Comment#1:
In 1Q2018 results, it talked about transition from Export Segment to China Wholesale segment, nothing was mentioned on “Franchise segment”, these are two different models altogether, aren’t they?
Comment # 2:
China revenue for 2Q2018:
Total = 6.205 m
MW = 1.043 m
Franchise = 0.841 m
ðImplied China Export revenue = 6.205 – 1.043 – 0.841 = 4.321 m , NOT 4.5 m
Again, they couldn't count……
Page 16 of 2Q2018 Results:
“As mentioned previously, due to the transition towards the new Franchise business segment resulting in delayed revenue recognition, revenue from China decreased from $26.6 million in 2Q2017 to $6.2 million in 2Q2018.
Notwithstanding the foregoing, demand for our products continues to grow in China. The aggregate SKUs sold to our franchisees in 1H2018 is significantly higher than the SKUs sold by our agent to the DR’s Secret Experience Centers in 1H2017, consistent across all of our core products. “
Comment # 3:
“The aggregate SKU sold to our franchisees in 1H2018 is significantly higher than………….”, which only translate into “Franchise revenue of 0.841 m”…………Ha- Ha ! How could that be ?
Page 18 of 2Q2018 Results:
“While the Franchise Segment will replace the Export Segment from 2H2018 onwards, the agent in China has remaining inventory which is expected to be completely depleted by mid-3Q2018. As such, Revenue from Franchise Segment in 3Q2018 does not fully represent the financial performance of our China business for the entire quarter;“
Comment # 4:
FY2017 China Export revenue = 105.927 m
1H2018 China Export revenue = 10.326 m
1H2018 China Franchise revenue = 0.841 m
2H2018 China Export revenue = 0
FY2018 China Export revenue = 10.326 m (~ 10% of FY2017)
2H2018 China Franchise revenue = F
What “F” has to be such that FY2018 profit contribution from China would exceed that of FY2017?
"Comment # 2:
China revenue for 2Q2018:
Total = 6.205 m
MW = 1.043 m
Franchise = 0.841 m
ðImplied China Export revenue = 6.205 – 1.043 – 0.841 = 4.321 m , NOT 4.5 m"
I think BW did not mention that 4.5m Export Revenue solely came from China Export Revenue.
"However, as a result of strong demand in China in 2Q2018, the Group had to export certain SKUs which were in critically low supply to its agent in China. As a result, $4.5 million of Export Revenue was recorded.
From 3Q2018 onwards, the Franchise Segment is expected to become a significant revenue contributor to the Group, while the Export Segment will represent solely the Group’s exports to Myanmar."
So i guess the China Export revenue of 2Q2018 is 4.321m while the balance 0.155m was from Myanmar Export revenue.
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“In line with last quarter’s announcement, the Group completed its transition phase in China from the Export Segment to the Franchise Segment in 2Q2018. However, as a result of strong demand in China in 2Q2018, the Group had to export certain SKUs which were in critically low supply to its agent in China. As a result, $4.5 million of Export Revenue was recorded.”
-----------------------------------------------------------------------------------------------------
What was the intent of the “WHOLE” statement ?
True,
Group Export Revenue = 4.476 m (~4.5 m) => This number was given in the report.
China Export Revenue = 4.321 m (implied) => This number was not NOT given.
Myanmar Export Revenue = 0.155 m (implied) => This number was NOT given.
$4.5 million of Export Revenue was recorded as a result of “what” ?
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.
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10-08-2018, 08:59 AM
(This post was last modified: 10-08-2018, 09:25 AM by Boon.)
(09-08-2018, 12:08 AM)chialc88 Wrote:
I benefited tremendously from your contributions.
Really appreciate all your help to identify an excellent company.
I recognised that BWL is going through a very difficult time.
Dora, Doreen and HBC is trying their best to navigate the complex China Direct sell (DS) market.
Franchise model, most likely formulated as they understood the challenges to push forward with DS.
Definitely not their choice to give up on DS, if only they can see some meaningfully way to benefits from DS in China context.
It's tough operating in China.
宝贝加油!
Let's see some quotable quotes from yesterday result announcement:
Quote:Notwithstanding the foregoing, demand for our products continues to grow in China.
The aggregate SKUs sold to our franchisees in 1H2018 is significantly higher than the SKUs
sold by our agent to the DR’s Secret Experience Centers in 1H2017, consistent across all of
our core products.
With market demand for the Group’s products in China being stronger than before and with
contribution from the Group’s operations in Taiwan, Indonesia, Hong Kong and Singapore,
barring any unforeseen circumstances, the management is still cautiously optimistic that the
Group will be able to register bottom line growth for FY2018, despite having recorded lower
revenue during the transition phase in 1H2018.
... agent in China has remaining inventory which is expected to be completely
depleted by mid-3Q2018. As such, Revenue from Franchise Segment in 3Q2018 does
not fully represent the financial performance of our China business for the entire
quarter...
Summary:
1. Revenue will be lower in FY18 compare to FY17 due to revenue recognition
2. Bottomline (profit) growth will be comparable (same) to FY17.
Extracts:
1. Revenue drop significantly
2. Gross profit and net profit drop significantly
3. EPS drop significantly
4. However, Gross profit margin and Net profit margin is growing
5. Cash at 90m is growing
6. Dividend of 1.2 cents is lower (compare to 1.5cents last year)
7. Inventory is building up as there should be zero export model in China
8. Trade receivable drop significantly due to payment received
Overall, BWL numbers is in tact and we need to wait for a longer time to reap benefits of DS.
And, of course, unlikely Franchise will replace DS, right?
Anyway, since, it's Singapore National Day, let me wish all valuebuddies a peaceful holiday.
"And, of course, unlikely Franchise will replace DS, right?"
Can the Franchise model co-exist with the DS model for the same product in the same market, if it is a "REAL" Franchise ?
From "China Export (CE)" to "China Wholesale (CW) " to "China Franchise (CF) ", what has changed?
1) BWCP has replaced the Export Agent (EA)
2) "Revenue is recognised when goods are sold to Franchisees", instead of "revenue is recognised when goods are shipped (to EA)
Owners of "Experience Centres"/Salons" become "franchisees".................nothing could have changed further along the downstream end of the distribution channel.....................
To me, CE, CW,CF are all being run as DS with multi-level compensation structure with BWI being the mastermind.................Otherwise, how could BWI has 400k consumer members under its CE model ? China was still the top producer of PD, GD, SD for FY2017.........Ha-ha!
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.
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(08-08-2018, 09:50 PM)MOV Wrote: How many shareholders really understand their explanations on Export Model, Wholesale Model or Franchise Model?
It is getting too complicated... haha
“The adoption of a Franchise vs DS model for China also complicates the analysis as it limits investors’ ability to reconcile between sales figures and underlying consumptions in China.............
We are also suspending coverage on the stock given limited visibility on underlying consumption trends in China under the new Franchise model”------------------DBS Vickers
https://sginvestors.io/sgx/stock/cgn-best-world/analyst-report
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.
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