Best World

[JanQuin]

Came back from the seminar and I would say that I am pretty impressed by the COO Huang Ban Chin. Came across as a genuine and confident fellow who knows what he is talking.

My key takeaways:
1. The group is confident of the award of the license. COO emphasises that it's a "when" question not a "if". The acquisition of China manufacturing plant in 2014 allowed them to fulfil the final criteria for application of licence. They have cleared the city's and province's application and applied to Beijing in December 2014. Based on past cases, it will take 2 to 2.5 years and hence they are looking at Dec 2016 or Mar 2017.

2. Most products of the group are OEM. Setting up Tuas plant in anticipation of China Direct License. Choice of choosing Singapore as Dr Secret is sold as a premium skin care product and hence important to control the quality and at the same time gives the impression that it is a quality product.

3. There is possibility of further growth in Taiwan's market. Last year they hit 1.3 billion NT sale. and the group thinks that they are about no. 13/14 in Taiwan. This year, they are looking at no. 8/9 which mean about 2 billion NT+. Amway which was the leader last year has 11.7 billion sale.

4. The group has been test marketing China over the past few years. They have also registered all products.

5. Recognise that regulatory is one of the group's key risk. That was the key cause of their drop in revenue in 2009 and 2010 when the Indonesia government prevented public officers from using skin products and void 2 licences of their products. This affected their sale as the skin products are sold in set and not in silo. Having said that, COO felt that the chances of regulatory changes should be lower in other countries.

6. Still in Indonesia but focus on weight management product but not skin care product.

7. COO said the group is more prepared this time round as they have a larger range of licenses.

8. HK market is dead because they have to keep increasing product prices to protect China market. This is so as people from Guangzhou will go to HK to buy and sell on Internet in China.

9. Historically, group earning is seasonal with poor Q1 and very strong Q4. With this year's strong Q1 results, management still believe Q4 will still be stronger but the gap would not be as large.

10. Dividend policy of 30% and with the exception of 2014, have paid out dividend twice a year. For 2014, cash was held on as they are in the final phase of purchasing the China manufacturing plant.

[Boon]

Trading halted pending release of an announcement.

[Boon]

https://fooads.com/post/5773814d2894ecf265fcc1df

[Boon]

https://fooads.com/post/5773814d2894ecf265fcc1df

http://www.zhixiaowang.com/htm/2016/06/69766.html

[MOV]

http://infopub.sgx.com/Apps?A=COW_CorpAn...4b312c0f79

The Board of Directors (the “Board”) of Best World International Limited (the “Company”, together with its subsidiaries, collectively the “Group”) wishes to announce that Best World (Zhejiang) Pharmaceutical Co., Ltd. (全美世界（浙江）药业有限公司), (“BWZ”), wholly-owned by the Company’s wholly-owned subsidiary, Best World Lifestyle Pte. Ltd., has on 30 June 2016 been granted its direct selling licence (直销经营许可证) (the “PRC Direct Selling Licence”) by the 中华人民共和国商务部 (Ministry of Commerce, the People’s Republic of China (“MOFCOM”)). Under the PRC Direct Selling Licence, BWZ is permitted to conduct direct selling in such areas in the People’s Republic of China (“PRC”) as shall be announced in due course on MOFCOM’s website on the administration of direct selling industry (商务部直销行业管理信息网站) (http://zxgl.mofcom.gov.cn/) (“MOFCOM’s Website”), for such categories of products as shall be announced in due course on MOFCOM’s Website. Pursuant to the grant of the PRC Direct Selling Licence, BWZ is not permitted to commence direct selling until BWZ has set up the requisite service centres in Hangzhou city within six (6) months of 7 June 2016, such service centres to be subject to the inspection and report of the Department of Commerce of Zhejiang Province, PRC. The grant of the PRC Direct Selling Licence is not expected to have any material effect on the consolidated net tangible assets and earnings per share of the Company for the financial year ending 31 December 2016. The Company shall make further announcements on the PRC Direct Selling Licence as and when there are any material developments. 

Cheers buddies!

[Boon]

http://infopub.sgx.com/Apps?A=COW_CorpAn...4b312c0f79

The Board of Directors (the “Board”) of Best World International Limited (the “Company”, together with its subsidiaries, collectively the “Group”) wishes to announce that Best World (Zhejiang) Pharmaceutical Co., Ltd. (全美世界（浙江）药业有限公司), (“BWZ”), wholly-owned by the Company’s wholly-owned subsidiary, Best World Lifestyle Pte. Ltd., has on 30 June 2016 been granted its direct selling licence (直销经营许可证) (the “PRC Direct Selling Licence”) by the 中华人民共和国商务部 (Ministry of Commerce, the People’s Republic of China (“MOFCOM”)). Under the PRC Direct Selling Licence, BWZ is permitted to conduct direct selling in such areas in the People’s Republic of China (“PRC”) as shall be announced in due course on MOFCOM’s website on the administration of direct selling industry (商务部直销行业管理信息网站) (http://zxgl.mofcom.gov.cn/) (“MOFCOM’s Website”), for such categories of products as shall be announced in due course on MOFCOM’s Website. Pursuant to the grant of the PRC Direct Selling Licence, BWZ is not permitted to commence direct selling until BWZ has set up the requisite service centres in Hangzhou city within six (6) months of 7 June 2016, such service centres to be subject to the inspection and report of the Department of Commerce of Zhejiang Province, PRC. The grant of the PRC Direct Selling Licence is not expected to have any material effect on the consolidated net tangible assets and earnings per share of the Company for the financial year ending 31 December 2016. The Company shall make further announcements on the PRC Direct Selling Licence as and when there are any material developments. 

Cheers buddies!

The granting of the first DS license from the central government (the first step) has always been the hardest.
 
Therefore, this should be considered a MASSIVE milestone for BWI - for being granted a DS license for its China subsidiary, Best World (Zhejiang) Pharmaceutical Co., Ltd. (全美世界（浙江）药业有限公司), (“BWZ”) – regardless of limitation in its INITIAL “scope”.
 
So what are “such areas” and “such categories of products” being granted under the FIRST DS license for BWZ?
 
Area:
Hangzhou City
 
Categories of products:
6 health supplements manufactured by BWZ (Aurigen line of products – and not BWL line of products)
 
http://www.chndsnews.com/guancha/2016/0629/66003.html
 
To conduct DS in other areas beyond Hangzhou city, BWZ would need to apply and obtain the DS permit for each provincial branch office in which it wishes to operate – this should be an easier process after the granting of the first DS license. (note: Nu Skin China first started in Shanghai City).
 
To my understanding through further research (and I could be wrong on this), to increase the range of products that BWZ could market under its DS model in China, it would have to apply and obtain the necessary prior approval from the local authority – a much simpler process after the granting of the first DS license. However, these should be products manufactured by BWZ itself, or products manufactured by its parent company (i.e. BWI or BWL). OEM products do not qualify.
 
As most of BWL products are OEM - hence the need for the Tuas factory – to qualify products manufactured by the Parent Company.
 
http://www.mofcom.gov.cn/article/swfg/sw...6174.shtml

http://www.js315ccn.com/html/direct/deta...3448.shtml
 
In another words, the granting of the first DS license has not quite put BWZ into a position where it could sell BWL line of products in China under the DS model – nevertheless, it was a giant step closer - there are still works to be done to get there.
 
When could this happen?
 
“The grant of the PRC Direct Selling Licence is not expected to have any material effect on the consolidated net tangible assets and earnings per share of the Company for the financial year ending 31 December 2016.”
 
"Not within this year" - according to the management.
 
Likely to be next year – 2017 – I reckon – by then the Tuas factory should be up and running.
 
Is it a near term concern ? Not at all (continue operating under the export model – could be more profitable in the near term)
 
Direct selling in China is potentially a multi-billion dollar industry and the granting of a DS license would position  BWI a step closer to participate in this strong growth in China ,driven by strong domestic consumption, for many years to come. 
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[Boon]

Best World International's shares surge 14.8% on licence to sell products in China

By Claire Huang

http://www.businesstimes.com.sg/stocks/h...s-in-china
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[CityFarmer]

I reckon, many were speculating a wind-fall, from China DS license award previously. They might be disappointed by the following statement 

“The grant of the PRC Direct Selling Licence is not expected to have any material effect on the consolidated net tangible assets and earnings per share of the Company for the financial year ending 31 December 2016.”

Based on the disclosure, the actual DS activities, is after establishment and audit of the 8 service centers. I didn't know it before, based on various disclosures of the company. Is this requirement, a surprise to the company? Or I have missed them? May be the previous time-line, was including the setup of the service centers.

Is the OEM, another issue? IIRC, the company key products are under contract manufacturing with few manufacturers, not OEM from other companies?

The new production line in Tuas, is to ensure better quality control, price, and supply chain management.

(not vested, but monitoring)

[Boon]

http://infopub.sgx.com/FileOpen/2016%200...eID=411276


Best World awarded China direct selling licence, poised to tap world’s 2nd largest direct selling market

• 􏰀  Will start selling in Hangzhou and expand to other regions
  
• 􏰀  Direct selling market in China registered a 19% growth in 2015, with total sales
  of more than RMB220 billion*
  
• 􏰀  Approval of licence lays the foundation for growth of the Group’s direct selling business for the next 5 to 8 years 
  

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[CityFarmer]

http://infopub.sgx.com/FileOpen/2016%200...eID=411276


Best World awarded China direct selling licence, poised to tap world’s 2nd largest direct selling market

• 􏰀  Will start selling in Hangzhou and expand to other regions
  
• 􏰀  Direct selling market in China registered a 19% growth in 2015, with total sales
  of more than RMB220 billion*
  
• 􏰀  Approval of licence lays the foundation for growth of the Group’s direct selling business for the next 5 to 8 years 
  

_______________________________________________________________________________________________________________________

I concur on the mid to long-term benefit of the China DS license. I am not so sure on the short-term one. 

China, is after-all, the world's 2nd largest direct selling market. Of course, the outcome, is till depend on the execution amid the competitive DS market in China.