Best World

[dreamybear]

Hi valuebuddies,

Thanks very much for the self-less sharing of BW analysis and even briefings ….  

I am one of those who watched my BW warrants expire helplessly years ago as the exercise price is less than the market price due to lumpy earnings during those few years. Hence, I am naturally happy now that BW is doing well again(of course, I am concerned that history may repeat itself.)

From my understanding after spending several hours watching various videos of BW / Nu Skin especially top distributors, BW’s fantastic revenue / profit recently seems to be due to managing to recruit a few excellent distributors who managed to build the business up e.g. Taiwan.

I surmise this may be obvious because it is a DS company. However, as a layman retail investor, I am more confident with established traditional retail like e.g. Johnson & Johson / McDonalds which I know there will be a certain amount of revenue/profit  every year(excluding exceptional). I am hoping for some yearly base earnings for BW that provides a base valuation for its share price.  

It seems BW has ticked all the right boxes in their preparation for penetrating the China market given the various information disclosed, but my concerns are :
1. What if BW is unable or takes very long to discover million dollar achiever China distributor(s) ?
2. I am not sure why DS is so popular in Taiwan/China, and not say in SG ? Looking at how those million dollar achievers talk so convincingly, I can only stare in amazement - I think very few people can actually make it big.
3. What would be a differentiating recruitment strategy for BW given there are already quite a number of DS organizations in China and some of them have already been there a number of years ?
4. Will the top Taiwan distributor(s) jump to other DS organization or will there be high Taiwan distributors turnover resulting in falling sales in the future ?
5. Actually, how are BW products compared to other DS(e.g. Nu skin) or off-the-shelf (e.g. GNC, Garnier, Shiseido)? I obviously have not used them before.
6. Country specific regulations seems to be a risk for DS companies which may not be able to be forseen when they will happen. But I guess there is nothing much a DS company can do about it.

Would appreciate if anyone can help to give me insights as I am not in a DS organization so my knowledge is very limited.

Thanks in advance !

Vested.

[Boon]

Another "out of stock" notice in Taiwan..........

[Boon]

Hi valuebuddies,

Thanks very much for the self-less sharing of BW analysis and even briefings ….  

I am one of those who watched my BW warrants expire helplessly years ago as the exercise price is less than the market price due to lumpy earnings during those few years. Hence, I am naturally happy now that BW is doing well again(of course, I am concerned that history may repeat itself.)

From my understanding after spending several hours watching various videos of BW / Nu Skin especially top distributors, BW’s fantastic revenue / profit recently seems to be due to managing to recruit a few excellent distributors who managed to build the business up e.g. Taiwan.

I surmise this may be obvious because it is a DS company. However, as a layman retail investor, I am more confident with established traditional retail like e.g. Johnson & Johson / McDonalds which I know there will be a certain amount of revenue/profit  every year(excluding exceptional). I am hoping for some yearly base earnings for BW that provides a base valuation for its share price.  

It seems BW has ticked all the right boxes in their preparation for penetrating the China market given the various information disclosed, but my concerns are :
1. What if BW is unable or takes very long to discover million dollar achiever China distributor(s) ?
2. I am not sure why DS is so popular in Taiwan/China, and not say in SG ? Looking at how those million dollar achievers talk so convincingly, I can only stare in amazement - I think very few people can actually make it big.
3. What would be a differentiating recruitment strategy for BW given there are already quite a number of DS organizations in China and some of them have already been there a number of years ?
4. Will the top Taiwan distributor(s) jump to other DS organization or will there be high Taiwan distributors turnover resulting in falling sales in the future ?
5. Actually, how are BW products compared to other DS(e.g. Nu skin) or off-the-shelf (e.g. GNC, Garnier, Shiseido)? I obviously have not used them before.
6. Country specific regulations seems to be a risk for DS companies which may not be able to be forseen when they will happen. But I guess there is nothing much a DS company can do about it.

Would appreciate if anyone can help to give me insights as I am not in a DS organization so my knowledge is very limited.

Thanks in advance !

Vested.

Hi valuebuddies,
 
Thanks very much for the self-less sharing of BW analysis and even briefings ….   
 
Hi dreamybear, thanks for your maiden post and welcome to VB.
 
I am one of those who watched my BW warrants expire helplessly years ago as the exercise price is less than the market price due to lumpy earnings during those few years. Hence, I am naturally happy now that BW is doing well again(of course, I am concerned that history may repeat itself.)
 
Your concern is basically a revenue (and earning) sustainability issue, which had been discussed before.
 
From my understanding after spending several hours watching various videos of BW / Nu Skin especially top distributors, BW’s fantastic revenue / profit recently seems to be due to managing to recruit a few excellent distributors who managed to build the business up e.g. Taiwan.
 
IMO, that was one of the few key factors, but not the only factor. Products acceptance by the market (especially DR’s Secret) is critical, I reckon. Some of the current top distributors had have no prior experience in DS when they first join BWL Taiwan.
 
I surmise this may be obvious because it is a DS company. However, as a layman retail investor, I am more confident with established traditional retail like e.g. Johnson & Johson / McDonalds which I know there will be a certain amount of revenue/profit every year(excluding exceptional). I am hoping for some yearly base earnings for BW that provides a base valuation for its share price.  
 
The biz models of J&J and McDonald are “retail model”. Depending on the products they are selling, some retailers are doing fine and some are struggling because of the high fixed rental costs. Try looking at the performance of “Camsing Healthcare”
 
http://infopub.sgx.com/FileOpen/Camsing%...leID=29147

I used to set a yearly base earnings expectation of above SGD 100m (in revenue) and above 10% (in Net Profit Margin), to be sustained over a period of at least 5 years.

FY2015 has met that.
FY2016 looks set to beat that by a wide margin

Looks like the "base" is trending upwards - it is hard to set a "reliable" base really.

DCF model seems to be a more suitable tool for valuing BWI, I reckon. 
 
It seems BW has ticked all the right boxes in their preparation for penetrating the China market given the various information disclosed, but my concerns are :
1. What if BW is unable or takes very long to discover million dollar achiever China distributor(s) ?
 
There are quite a few MDA in China already.
 
https://youtu.be/fm8z9saiHSU
 
2. I am not sure why DS is so popular in Taiwan/China, and not say in SG ? Looking at how those million dollar achievers talk so convincingly, I can only stare in amazement - I think very few people can actually make it big.
 
Cultural, social, entrepreneur spirit, perception factors etc that could make the difference, I would guess. 
 
Sales, big or small, are collectively driven by the whole group regardless of ranks (BA, BM, SBM, BBM, SD, GD, & PD) – MDA is only another special achievement award.
 
3. What would be a differentiating recruitment strategy for BW given there are already quite a number of DS organizations in China and some of them have already been there a number of years ?
 
I suggest you watch the 2016 motivation video by Dora Hoan. 

Using size of China DS pie per licensed operators as a measure, China DS industry seems to be one of the least competitive DS market in the world. Taiwan is a much more mature and competitive market compared to China, and yet,  being a late comer to Taiwan, BWI manage to gain substantial market shares there, hence, I believe, BWI is likely to succeed in China as well.
  
Being who it is now (its product brands, company culture of being harmonious, open and transparent, compensation structure, distributors support and training infrastructure etc), I believe BWI has what it takes to recruit and retain distributors in China. 
 
https://youtu.be/B_mbBLyc_fc
 
4. Will the top Taiwan distributor(s) jump to other DS organization or will there be high Taiwan distributors turnover resulting in falling sales in the future?
 
It is of anybody’s guess – the point is to maintain net gain – membership seems to be on the rise every month. 

BWI provides all its distributors a global platform in which they could operate. Some Taiwan distributors have already spread their activities to China, Thailand and Malaysia.
 
5. Actually, how are BW products compared to other DS(e.g. Nu skin) or off-the-shelf (e.g. GNC, Garnier, Shiseido)? I obviously have not used them before.
 
Products acceptance especially in Taiwan and China must be pretty good and rising in order for BWI to enjoy its current sales volume and growth rate.
 
Try googling or baidu “全美皙之密” to get the feel of it.
 
6. Country specific regulations seems to be a risk for DS companies which may not be able to be forseen when they will happen. But I guess there is nothing much a DS company can do about it.
 
Who knows, like Amway China, BWI could have a positive role to play in shaping and contributing towards future DS policies in China.
 
Would appreciate if anyone can help to give me insights as I am not in a DS organization so my knowledge is very limited.
 
Thanks in advance ! 

Vested.

Hope that helps..........
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[Boon]

Another excellent growth opportunity for BWI.........................
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http://infopub.sgx.com/FileOpen/BWIL%20P...eID=412616
 
PROPOSED JOINT VENTURE WITH PROLIFE BIOBANK PTE. LTD. AND PROPOSED SUBSCRIPTION OF SHARES IN CELCOTT BIOBANK PRIVATE LIMITED

NTRODUCTION
The board of directors ("Board") of Best World International Limited (the "Company" and together with its subsidiaries, the "Group") wishes to announce that on 13 July 2016, the Company’s wholly- owned subsidiary, Celcott Investments Pte. Ltd. ("CIPL"), has entered into a joint venture agreement ("JVA") with Prolife Biobank Pte. Ltd. ("JV Partner") and Celcott Biobank Private Limited ("JV Company") relating to the proposed joint venture between CIPL and the JV Partner to invest in the JV Company, which will be engaged in the business of providing stem cell banking services (including dental stem cell banking services, which involves inter alia undertaking the collection and processing of the shedded milk teeth for stem cells and the storage of such stem cells) ("Business") (the "Proposed Joint Venture"). .................................

RATIONALE FOR THE PROPOSED JOINT VENTURE AND THE PROPOSED SUBSCRIPTION
As part of its growth strategy, the Company constantly develops new health and wellness-related products and/or services for its independent distributors and member customers in the region. In the recent years, the awareness level of storing one’s stem cells for preservation of health and improvement of quality of life is on the rise. The Company recognises this as a good growth opportunity if it is able to leverage on this trend and mobilise its growing number of independent distributors and member customers, who are trained to promote health and wellness products, to subscribe to the JV Company’s stem cell banking services and to also actively promote such stem cell banking services to their network as one of the Group’s product offerings. .......................................................
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This is roughly how the stem cell banking services work.................................

https://www.facialart.com/wp-content/upl...rticle.pdf

This is the website of Prolife Biobank, the existing business to be injected into the proposed JV. 

http://www.prolifebiobank.com/home.php

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2.3 For the purposes of the Proposed Joint Venture, the JV Partner will be transferring its Existing Business and the assets relating to its Existing Business to the JV Company ("Business Transfer"). The unaudited net tangible liability value of the Existing Business and the assets relating to its Existing Business to be transferred to the JV Company pursuant to the Business Transfer, as at 31 March 2016 is approximately S$90,000.
2.4 Based on an independent valuation report dated 12 July 2016 issued by Foo Kon Tan Corporate Finance Pte Ltd as commissioned by the Company ("Valuation Report"), the fair value of 100% equity interest of the JV Partner as at 31 March 2016 was estimated to be in the range of S$14,399,000 (based on the capitalisation of future maintainable earnings method) to S$15,709,000 (based on the discounted cash flow method).
2.5  In arriving at the terms of the Proposed Joint Venture and the value to be attributed to the Existing Business and the assets relating to the Existing Business to be transferred to the JV Company, the Company and the JV Partner took into account the above valuation parameters and the strategic value that the Group will bring to the Proposed Joint Venture, including non-cash contributions such as the Group's distribution networks in 12 countries and its administrative, information technology, finance and governance support functions. Based on arm's length discussions and negotiations and on a "willing buyer-willing seller" basis, the Company and the JV Partner have agreed that:-

(a) the consideration payable by the JV Company to the JV Partner for the Business Transfer will be S$2,300,000, which is to be satisfied by the issuance of 2,300,000 new Shares in the capital of the JV Company ("Consideration Shares") to the JV Partner; and

(b) CIPL will subscribe for 2,500,000 new Shares in the capital of the JV Company ("Subscription Shares") at S$2,500,000 ("Subscription Consideration").

The value of the Proposed JV company ~ SGD 15 m.
 
BWI, through its newly formed subsidiary, CIPL, pays SGD 2.5 m (plus strategic value that the BWI group will bring to the Proposed JV) for 52.08% of the JV Company. Sounds like a good deal………………..
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[Boon]

Another round of query from SGX on "unusual price movement" in BWI's shares.............

http://bestworld.listedcompany.com/newsr...6CSV.1.pdf
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[Boon]

This stem cell banking business is a bit of a surprise to me, nevertheless, it is an interesting one - revenue base would be broadened.
 
Assuming BWI could manage to convert 10% of its current members to commit to a long term program with an average annual storage fee of SGD 150 per year, this would bring in an incremental annual revenue of about SGD 6 million (40,000 x SGD 150) to the existing business.
 
Who knows how big could this business be snowballed into going forward, if it goes well, potentially it could be spin-off and listed separately down the road, I reckon.
 
From BWZ acquisition, Dubai JV, Tuas factory to stem cell banking JV, deals flow seem to have increased in recent years for BWI, hopefully we could see more similar value accretive deals flowing going forward.
 
Next year (2017) should be an interesting year to look forward to, as it is the year in which there would be performance reporting on these new deals (DS business in China, the Tuas factory business, the Dubai JV business and the stem cell banking JV business).
 
2Q2016/1H2016 results should be out on 05-Aug-2016 (as per AR2015) – looking forward to it…………………..
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[mslee888]

I am not familiar with stem cell business. There may be some execution risk since Prolife Biobank Pte. Ltd was established in 2012 and not profit making yet.
Hopefully BWI can bring some economies of scale and drive this business segment profitable. Its still very early days. Probably BWI management thinks this new business will be complementary to their current business.

Does this business has high running costs?

[namralk]

The new stem cell JV is for "shedded milk teeth for stem cells (SHED) and the storage of such stem cells".

Below info extracted from attached academic report on dental stem cell (published Jan 2016).

What is Dental Stem Cell

- In 2003 DR. SONGTAO SHI- a Pedodontist discovered baby tooth stem cells by using the deciduous teeth of his six year old daughter and he named them as stem cells from human exfoliated deciduous teeth (SHED).

- dental pulp stem cells can be found both in children and adults
- Saves cells before natural damage occurs. 
- Simple and painless for both child and parent .
- Less than one third of the cost of cord blood storage .
- SHED are adult stem cells and are not the subject of the same ethical concerns as embryonic stem cells

Use of Dental Stem Cell

- SHED cells are complementary to stem cells from cord blood. While cord blood stem cells have proven valuable in the regeneration of blood cell types, SHED are able    to regenerate solid tissue types that cord blood cannot such as potentially repairing connective tissues, dental tissues, neuronal tissue and bone.

- SHED may also be useful for close relatives of the donor such as grandparents, parents, uncles, and siblings (Note : that's nice for those of us who have all lost our baby teeth)


Collection of Dental Stem Cell

- the first step as informed to them is to put tooth fulfilling above mentioned criterias in sterile saline solution and give a call to tooth bank or attending dentist of the bank. The tooth exfoliated should have pulp red in color, indicating that the pulp received blood flow up until the time of removal, which is indicative of cell viability.

- The viability of the stem cells is both time and temperature sensitive, and careful attention is required to ensure that the sample will remain viable. The time from harvesting to arrival at the processing storage facility should not exceed 40 hours. (Note : impt point as flight time for the tooth to the "storage factory" should be less than 10 hours?)

Isolation of Dental Stem Cell from the tooth

- refer to article as it is quite technical

Storage of Dental Stem Cell - 2 methods

a) Cryopreservation  
-  process of preserving cells or whole tissues by cooling them to sub-zero temperatures
-  The cells are preserved in liquid nitrogen vapour at a temperature of less than -150ºC. This preserves the cells and maintains their latency and potency

b) Magnetic freezing
-  uses magnetic freezing rather than cryogenic freezing

Commercial Aspect of Dental Stem Cell Storage

- Tooth banking is not very popular but the trend is catching up mainly in the developed countries.

-  In the USA, BioEden(Austin, Texas), has international laboratories in the UK (serving Europe) and Thailand (serving South East Asia).  (Note : UK is the hub serving Europe. Thailand is the hub serving SEA. Perhaps in BWL case SGP can be the hub serving Asia?)

- https://uk.bioeden.com/why-store-stem-cells/

- Taipei Medical University (TMU) in collaboration with Hiroshima University opened the nation’s first tooth bank in September, 2008 with the goal of storing teeth for natural implants and providing a potential alternative source for harvesting and freezing stem cells including SHED

Conclusion

- Stem cells can be used to treat various diseases like Parkinson’s disease, cancer, spinal injuries, heart diseases, liver diseases, blindness, muscle damage, diabetes and many other diseases in the future

- Recent studies show that SHED appear to have the ability to develop into more types of body tissue than other types of stem cells. This difference opens the door to more therapeutic applications .There is much research left to be conducted, but the existing research has clearly shown that primary teeth are a better source for stem cells.


-  While the promise of the immense scope and magnitude that stem cell therapies will have upon the population will only be fully realized in the future, Dental Professionals have realized that the critical time to act is now. The available opportunities to bank their patients’dental stem cells will have the greatest future impact.

[namralk]

http://www.byrdie.com/human-stem-cells-skincare

possible use of stem cell for skin care too.

[Boon]

I am not familiar with stem cell business. There may be some execution risk since Prolife Biobank Pte. Ltd was established in 2012 and not profit making yet.
Hopefully BWI can bring some economies of scale and drive this business segment profitable. Its still very early days. Probably BWI management thinks this new business will be complementary to their current business.

Does this business has high running costs?

Prolife Biobank (PB) is currently engaged in the business of marketing dental stem cell banking services to parents who intend to harvest the stem cells from their children’s milk teeth, offering various dental stem cell biobanking programmes, and arranging for the collection and processing of the shedded milk teeth for stem cells and the storage of such stem cells by third parties on an outsourced basis.
 
Biz model:
“marketing” and “arranging” => done by PB
“collection”, “processing” & “storage” => outsourced to third parties.
 
It is an asset-light business in selling “services” rather than selling “products”.
 
Running costs shouldn’t be high, I reckon
 
Marketing costs could be high, I would guess, especially in early stages – probably explains why it has yet to be profitable.
 
Could be very profitable if could reach a critical volume.
 
Synergies with BWI:
Have access to BWI’s customer base and distribution networks in 12 countries without incurring any marketing costs.

Could leverage on BWI’s support functions => cost saving.
 
BWI might have the ability and confidence in scaling up this business more quickly and at lower cost or minimal cost than PB doing it alone.
 
The business has been up and running for about 4 years now and it could potentially be a lucrative business once it is scaled up. The Management of BWI probably recognize this, otherwise they probably would not have invested in it. 
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