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Best World
01-01-2020, 10:42 PM. (This post was last modified: 01-01-2020, 10:46 PM by ¯|_(ツ)_/¯. Edit Reason: 2020 Huat to all valuebuddies )
Post: #1021
Rainbow  Outstanding info and doc requested since 13 May 2019
Allow me to add one point.

In it's letter dated 13 May 2019, SGX clearly request for BWL and it's partners to provide all the financial, delivery and government filing for investigation.
(click and see letter from SGX item 11 (d) )

As at late Oct 2019, after lengthy negotiation, then BWL's key partner is willing to cooperate and agrees to provide the necessary info and doc for investigation.

Since then, Independent Auditor had been traveling up and down Changsha as per BWL filing dated 1st Nov 2019.
(click for 1st Nov 2019 announcement)

Fast forward to 12 Dec 2019, BWL reported that some partners had not share the necessary info and doc due to confidentiality concerns.

What I'm very curious is: despite the withholding of info and doc, BWL is cautiously optimistic that company is able to meet the indicative timeline as copied in Bear's post above.
(click for 12 Dec 2019 announcement)


Actually, I'm not concern about the related parties transactions.
These numbers are small.
Whether it's between it's export agent, with Dora's brother-in-law or Ban Chin's wife, these are really small numbers.
Of course, I'm quite sure BWL is able to explain and reconcile after a few rounds of clarifications.
These are not my concern.

My concern is the actual reason Direct selling (DS) model is ditched and replaced with Franchise's model.
Yes, of course, I could understand the rationale that Franchise model is a stepping stone towards Direct selling model.
My question is what's the actual reason that BWL can not go with DS model and instead Franchise model will allow it to continue selling without touching the nerve of Chinese Government.
I mean, I understand that going with DS model now will clearly violate China law and that's why Franchise model is introduced immediately to de-risk.
I understand.
What I don't understand is what is the "thing" that DS model break?
And, of course, why Franchise model will rescue BWL from breaking the law?

Today is still New year and the topic sounds too heavy to digest.
Relax a little bit.
Best wishes to all valuebuddies had a blessed 2020 for another decade.
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02-01-2020, 11:19 PM. (This post was last modified: 02-01-2020, 11:38 PM by dreamybear.)
Post: #1022
RE: Outstanding info and doc requested since 13 May 2019
(01-01-2020, 10:42 PM)¯|_(ツ)_/¯ Wrote: ........
Actually, I'm not concern about the related parties transactions.
These numbers are small.
Whether it's between it's export agent, with Dora's brother-in-law or Ban Chin's wife, these are really small numbers.
Of course, I'm quite sure BWL is able to explain and reconcile after a few rounds of clarifications.
These are not my concern.

I am not sure what numbers are you referring to that are small. In FY2017 results, the revenue from Export segment amounted to 106 million, and Changsha Best being the primary import agent, the amounts flowing through it are certainly substantial. Referring to the objective on the review, "(b) To verify the sales to the Primary Import Agent and other import agents used by the Group in the China market, if any, for the period from FY2015 to FY2018 under the export model, and ascertain if these transactions were on normal commercial terms and conducted at an arm’s length basis....."

(01-01-2020, 10:42 PM)¯|_(ツ)_/¯ Wrote: ........
My concern is the actual reason Direct selling (DS) model is ditched and replaced with Franchise's model.
Yes, of course, I could understand the rationale that Franchise model is a stepping stone towards Direct selling model.
My question is what's the actual reason that BWL can not go with DS model and instead Franchise model will allow it to continue selling without touching the nerve of Chinese Government.
I mean, I understand that going with DS model now will clearly violate China law and that's why Franchise model is introduced immediately to de-risk.
I understand.
What I don't understand is what is the "thing" that DS model break?
And, of course, why Franchise model will rescue BWL from breaking the law?

Hmmm, where/why do you have the understanding that Franchise model is a stepping stone towards DS model, and that it is due to possible DS violations that BW switched to Franchise model in China ? 

As far as I know, the reason(s) for the transition can be found in 23/03/2019 Clarification Announcement.

"Rationale for Transition to Franchise Model

Since the Group’s entry into the China market through the Export Model, the Group had been exploring various options to evolve its business model to improve efficiency, enhance earnings and generate returns for shareholders. The Group considered transitioning the Export Model to the Direct Selling Model in China, which would require the expansion of the coverage of the Group’s direct selling licences, as well as establishing service outlets in every district of every city in which the Products are distributed due to legal requirements relating to direct selling in China.This was considered inefficient, costly and may inevitably lead to market competition between the Company and the existing primary distributors..

After careful evaluation of the different options and in consideration of market factors and the competitive landscape in China,the Group decided to transition to the Franchise Model in China. The Franchise Model would allow a more seamless integration with the Group’s existing network of primary distributors under the Export Model, which would allowthe Group to leverage on the growth momentum already achieved in China. In addition, given the population size and geographic expanse of the China market, the Group believed that the Franchise Model would enable the Groupto effectively establish a physical presence in several locations across China through close collaborations with the Franchisees......."

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03-01-2020, 10:34 PM.
Post: #1023
Rainbow  What's wrong with China Direct Selling?
What's wrong with China Direct Selling?

Thank you Bear for giving me a chance to share my thinking.

There are too many attentions on the 106m.
These to me is either a distraction or non-event.
Distraction - swing the investigation into tedious tasks of forensic and missed out more important issues.
Non-Event - BWL is a professional operating in MLM world. My thinking is with carefully crafted messages, BWL likely will get light or no punishment from the regulator.

Back to something more important
(which I'm not sure why it was ignored. There is a possibility that short-sellers is digging their foxhole on this more dramatic issues while distracting everyone to do the witch hunting on export sales transactions). 

My thinking is very simple.
Direct Selling is the way to go.
Franchises model is a interim solution before getting DS license.

Obviously, I was still under the euphoria of BWL proud announcement when they secured their DS license in China.
(click for 2016 China DS article)

BWL spend so much energy in getting their DS license in 2016.
With your help, I noted that Franchises model is here to stay and not a stepping stone to DS license.
Thank you.

Ok, can we go back to my real concern?

Before Franchise model was introduced, BWL tracks their members and reported these membership in their Annual Report.
With Franchises model, the memberships number disappear as there is no need to deal with members transactions any more.
BWL only need to deal with the Franchisees and hence BWL contractual obligation is towards it's Franchisees 
and therefor, it's obligation for it's members reduced significantly.

Reminder: these issues still exists today.
(click to read BWL response to China crackdown)

The difference is BWL no longer bounded by China Law as they are only required to deal with the Franchisees.
What Franchisees do (especially illegal stuffs), the Franchisees will need to be answerable to the China government.
BWL is off the hook, isn't it?



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11-01-2020, 10:40 AM.
Post: #1024
Rainbow  bwl - SGX strengthening continuous disclosures requirement for IPT
9 Jan 2020 SGX announced that it will strengthen continuous disclosures requirements in areas that are of high investor interest such as interested person transactions (IPTs).  

SGX RegCo will have powers with respect to IPTs to deem a person or entity an “interested person”, and aggregate separate IPTs entered into during the same financial year and treat them as if they were one transaction, in appropriate circumstances.

These amendments will safeguard investors’ interests in matters where they have indicated the greatest concern. 

(click to read SGX annoucement)



We hope that this is not reacting to BWL's ongoing investigation on Dora's brother-in-law or HBC's wife.
If this announcement is to strengthen the disclosures requirement because of BWL's incident, then we could deduced that BWL did not breaks any current SGX disclosures rules aka ChangSha Best is a non-issues as far as disclosure is concerned.

Based on BWL milestone,  the investigation report should be completed and submitted to SGX by early Jan 2020.

While waiting patiently for the key findings to be disclosed in early Feb,
meanwhile, relax and enjoy:


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Thanks all valuebuddies for helping me in my investment journey.
I learn a lot from you.

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03-02-2020, 08:46 AM. (This post was last modified: 03-02-2020, 09:00 AM by weijian.)
Post: #1025
Tongue  RE: Best World
CORONAVIRUS WILL AFFECT BEST WORLD's CHINA SALES ???

Many investors seem to have forgotten that China makes up a big block of Best World's sales. 

With the Coronavirus being so rampant in China, people will care less than looking good and more about staying healthy. They will cut down their consumption on these skin care products. 

Sales will definitely be badly hit.. Yet, the company does not provide any updates. 

I expect Best World sales to plunge more than 50% for 2020. Net Profit will drop a lot lot more. 

Be prepared for a 50% drop in share price when trading resumed.

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08-02-2020, 04:27 PM.
Post: #1026
Rainbow  What's holding back Best World investigation?
What's holding back Best World investigation?

We know that after a few months of delay, finally, BWL's export partner agrees to provide the document.

Of course, not all the China partners agree to provide the data citing confidentially reason.

Could this caused the delay?

If not, by now, SGX should had already reviewed the draft report on whether there transactions between 2015 - 2018 is conducted according to commercial terms.
This should be completed in Jan 2020.

In early Feb 2020, we should expect the announcement of key findings as well as receiving the outstanding annual report.

Right?



06 Feb 2020 SGX issued Notice of Compliance to Bestworld (plus quite a few listed company).
(click for link to SGX NOC)

07 Feb 2020 Bestworld confirmed  that it will perform the next set of quarterly financial statements for Q1 period from January to March 2020 by 15 May 2020 (or such further period as may be granted by the SGX RegCo).
(click to read BWL reply)

BWL was trading at 136 before suspension.
There are a lot of people discussing on what's a good price to enter when BWL re-open again.

What do you think?


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Thanks all valuebuddies for helping me in my investment journey.
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14-02-2020, 11:27 PM. (This post was last modified: 18-02-2020, 10:29 PM by dreamybear.)
Post: #1027
RE: Best World
Yes, the 7 Feb 2020 announcement on the requirement for BW to perform quarterly reporting is "good" news to me as an investor.

However, rec'd disappointing news from BW on Valentine's day. It's already not bear's "valentine" stock though.   Dodgy

The indicative date for the announcement of executive summary of Independent Review report is pushed back to 20 Mar 2020.

While understandable with the ongoing situation(travel restrictions, lockdown, etc) in China, it's nevertheless an unfortunate time not to be able to get timely updates with the Chinese mkt being the main revenue/profit generator. Then again, BW is still suspended. For reference, Nuskin's* share price has also undergone a heavy correction in recent days, nearing a 5 year low.

There's no announcement of 1Q2020 results timeline yet but at this point I am not too optimistic that the usual timeline can be met(hopefully I am wrong).

While it's reassuring that nothing amiss has been reported thus far, the latest developments may result in the shares being suspended for more than a year(taking into a/c cumulative periods since 2019). I hv always(and still) believed in the three founders but thought that the whole issue cld have been handled better(perhaps it's beyond their control I wldn't know). I guess what cld help to comfort the shareholders wld be a clean bill of health from the independent reviewer, as well as successful resoluton of the legal case with Bonitas if there is any eventually.

Best World takes Bonitas to Court for defamation

Separate Bonitas Case
Rural Funds kicks off legal action against short-seller Bonitas
Rural Funds wins unprecedented case against activist short seller bonitas

*"...Following the recent coronavirus outbreak, we placed a temporary hold on all in-person meetings with our sales force and customers in Mainland China...For the year, we are projecting a decline in sales in Mainland China of 20 to 25 percent..." Nu Skin 2019 Results & 2020 Guidance

----------------------------------------------------
Application for Further Extension of Time

In light ofthe disruptions caused by Covid-19, the Company has submitted an application to SGX RegCo for:
(a) 4Q2019 unaudited financial statements: an extension of two (2) months to announce its unaudited financial statements for the fourth quarter and full year ended 31 December 2019 by 30 April 2020 under Rule 705(1)(“4Q2019 Financial Results”);
(b) FY2018AGM: a further extension of four (4) months to hold the FY2018 AGM by 30 June 2020 in accordance with Rule 707(1); and
© FY2019 AGM: an extension of five (5) months to hold the FY2019 AGM by 30 September 2020 in accordance with Rule 707(1)

http://bestworld.listedcompany.com/newsr...PNV8.1.pdf

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04-03-2020, 09:14 PM. (This post was last modified: 01-04-2020, 05:21 PM by dreamybear.)
Post: #1028
RE: Best World
I think this can be considered gd or perhaps consolation news for BW investors - FY2019 results to be released by end Mar 2020 instead of end Apr 2020.

I am going to stick my neck out and predict a special dividend, in line with my self-perceived understanding of mgmt(ha ha),  the unexpected long suspension and BW's 30 anniversary.

http://bestworld.listedcompany.com/newsr...5W63.1.pdf
"FY2019 Results: an extension of time to 31 March 2020 to release its unaudited full year financial results for FY2019"

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24-03-2020, 06:53 PM.
Post: #1029
RE: Best World
PwC sheds some light on Best World's financial affairs in interim update
MON, MAR 23, 2020 - 3:57 PM
Marissa Lee
https://www.businesstimes.com.sg/compani...rim-update
http://bestworld.listedcompany.com/newsr...S4D7.1.pdf
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01-04-2020, 01:04 AM. (This post was last modified: 01-04-2020, 04:58 PM by dreamybear.)
Post: #1030
RE: Best World
(04-03-2020, 09:14 PM)dreamybear Wrote: I am going to stick my neck out and predict a special dividend, in line with my self-perceived understanding of mgmt(ha ha),  the unexpected long suspension and BW's 30 anniversary.

Oops, bear is badly defeated by counting chickens before they hatch - no dividend declared, despite achieving $88.7m profit(22.3% better than previous year) / EPS : $0.1627

Outlook for FY2020 challenging.

https://links.sgx.com/FileOpen/2020%2003...eID=603200 [ FY 2019 Financial Results ]
12. If no dividend has been declared/ recommended, a statement to that effect.
In view of the indefinite and prolonged disruption caused by the Covid-19 outbreak in all the markets that the Group operate in, the Board has decided to suspend the dividend policy for FY2019 and not declarea final dividend for FY2019 as a prudent move to conserve cash in the face of heightened economic volatility and business uncertainty. The build-up of cash buffer will also allow the Group to capitalise on any opportunities that may arise in such turbulent times.

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