Best World

[butcher]

2013 (Best World)
Dr Dora Hoan Beng Mui $600,000 to $800,000 (Salary = 89% / bonus = 8%/ benefit in kind = 3%)
Dr Doreen Tan Nee Moi $6000,000 to $800,000 (Salary = 89% / bonus = 8% benefit in kind = 3%)
Mr Huang Ban Chin $400,000 to $600,000 (Salary = 88% / bonus = 8%/ benefit in kind = 4%)

2014 (Best World)
Dr Dora Hoan Beng Mui $1,000,000 to $1,200,000 (Salary = 70% / bonus = 27%/ benefit in kind = 3%)
Dr Doreen Tan Nee Moi $1,000,000 to $1,200,000 (Salary = 70% / bonus = 27%/ benefit in kind = 3%)
Mr Huang Ban Chin $600,000 to $800,000 (Salary = 75% / bonus = 22%/ benefit in kind = 3%)

So disclosure in band = lack of transparency (it is in compliance with disclosure requirement, nevertheless)

Disclosure in very specific = Good transparency (What if there is no breakdown given on the specific ?)

Did Nordic show the breakdown on how the specific pay was arrived at ?

It would be interesting indeed to find out if the top management of BWL is over or under paid compare to its peers…………………………

But is it fair or appropriate to compare Best World to Nordic? Are they both in the same industry?

What do you think had contributed to the higher pay in 2014 compare to 2013 for the top 3 management of Best World?

Did they feel complacent about their 2013 pays?

Did they work harder to achieve better results (and hence pays) in 2014?

What made you think they would feel complacent about their 2014 pay going forward ?

Do you expect them to get the same pay in 2015 as in 2014, even if the FY2015 results fall below that of FY2014 ?

On China play
1) BWL has been exporting to its China agents prior to the acquisition of BWZ (the Export business model)
2) With the acquisition of BWZ last year – it had immediate access to the Wholesale distribution network covering 31 provinces in China
3) The E-Commerce platform would be rolled out in China in 2H2015 (Online model)
4) The acquisition of BWZ has qualified BWL to put in an application for a DS license in China  

The potential that could be exploited via the first 3 distribution networks is not small and should not be underestimated, iMO. – and these are not long shots…………….Direct Selling license may be a longer shot …but who knows.......................

Could all these progresses be made had the management stayed complacent in developing the business?

(vested)

Noted similarity between Best World and Nordic is they have same auditors, RSM Chio Lim 

With due respect, not audited by big 4

[greengiraffe]

FTA to power Swisse’s China growth

• THE AUSTRALIAN
  
• OCTOBER 23, 2015 12:00AM
  

Damon Kitney
[Image: damon_kitney.png]
Victorian Business Editor
Melbourne

[Image: 132603-1e413e4a-7863-11e5-98bf-217dbc548dd3.jpg]
Grant Thornton Australia’s Greg Keith with Swisse’s Adem Karafili Source: Supplied
[b]Vitamins maker Swisse expects more than half its revenue to come from the booming Chinese market within the next 12 months, as the China free-trade agreement opens the door for it to sell more products directly to consumers in pharmacies throughout the Asian nation.[/b]
Following the agreement reached in federal parliament on Wednesday to legislate the FTA by the end of the year, Swisse chief operating officer Adem Karafili said he looked forward to the removal of regulatory restrictions that had slowed the rollout of the company's bricks-and-mortar growth strategy in China.
“It's great to see such a sensible resolution. Not only will Swisse and our industry benefit, but it will positively affect so many other industries and we will get the maximum possible benefits with it being passed this year,” he told The Australian of the trade deal.
“Importantly for our sector, we look forward to deeper discussions around regulatory harmonisation that can now be furthered substantially.” At present, the group must go through a registration process that can take five years to sell its products through pharmacies in China.
Grant Thornton Australia chief executive Greg Keith, a key adviser to Swisse, said the group was one of many mid-sized businesses that could now kickstart their growth strategy in China and the rest of Asia following the conclusion of the trade deal.
“This is the perfect time for Australian mid-size businesses to develop their Asian growth strategies,” he said.
Swisse made headlines last month when it was purchased for a stunning $1.67 billion by Hong Kong-listed Biostime International, which outbid two Chinese companies for an 83 per cent share of the vitamin maker.
Following the deal, Swisse will remain based in Melbourne and its management team will stay in place, but Mr Karafili said it would be able to use Biostime's distribution network with more than 3000 pharmacies across mainland China.
“They certainly weren't the ones that were offering the most (in the sale process), but they were the ones we thought would be the best partner medium to long term,” he said.
Swisse, which will turn over more than $500 million this year, has seen sales in China skyrocket over the past 12 months.
“We were doing $2m in sales a month last November. We are now doing $15m to $18m a month,” Mr Karafili said.
He said there were now 117,000 resellers of Swisse products on Chinese e-commerce site Taobao.com in mainland China.
The value of vitamin sales on the mainland has more than ­doubled during the past decade to more than $17bn. A recent survey showed more than 4600 Australian-based agents were advertising local vitamins, organic groceries and infant formula through Chinese social media and e-commerce websites.
“The Chinese market is now getting to 30 per cent of our total business and growing. It should get to half our business over the next 12 months. It is just enormous growth,” Mr Karafili said.
“We now want to do a bricks-and-mortar strategy on the ground in China, getting into predominantly pharmacies. We are going there next week.”
The share price of rival Australian vitamin maker Blackmores has more than quadrupled in the past year to more than $100, prompting some to speculate whether the vitamin boom could turn to bust as China slows.
But Mr Karafili said there was still plenty of value in Blackmores and other players in the food, cosmetics and vitamin industries in growing market share in China and other Asian markets.
“The fact we have emerging markets being able to shift out of traditional medicine into a hybrid with Western medicine is a natural progression for them,” he said.

[Boon]

2013 (Best World)
Dr Dora Hoan Beng Mui $600,000 to $800,000 (Salary = 89% / bonus = 8%/ benefit in kind = 3%)
Dr Doreen Tan Nee Moi $6000,000 to $800,000 (Salary = 89% / bonus = 8% benefit in kind = 3%)
Mr Huang Ban Chin $400,000 to $600,000 (Salary = 88% / bonus = 8%/ benefit in kind = 4%)

2014 (Best World)
Dr Dora Hoan Beng Mui $1,000,000 to $1,200,000 (Salary = 70% / bonus = 27%/ benefit in kind = 3%)
Dr Doreen Tan Nee Moi $1,000,000 to $1,200,000 (Salary = 70% / bonus = 27%/ benefit in kind = 3%)
Mr Huang Ban Chin $600,000 to $800,000 (Salary = 75% / bonus = 22%/ benefit in kind = 3%)

So disclosure in band = lack of transparency (it is in compliance with disclosure requirement, nevertheless)

Disclosure in very specific = Good transparency (What if there is no breakdown given on the specific ?)

Did Nordic show the breakdown on how the specific pay was arrived at ?

It would be interesting indeed to find out if the top management of BWL is over or under paid compare to its peers…………………………

But is it fair or appropriate to compare Best World to Nordic? Are they both in the same industry?

What do you think had contributed to the higher pay in 2014 compare to 2013 for the top 3 management of Best World?

Did they feel complacent about their 2013 pays?

Did they work harder to achieve better results (and hence pays) in 2014?

What made you think they would feel complacent about their 2014 pay going forward ?

Do you expect them to get the same pay in 2015 as in 2014, even if the FY2015 results fall below that of FY2014 ?

On China play
1) BWL has been exporting to its China agents prior to the acquisition of BWZ (the Export business model)
2) With the acquisition of BWZ last year – it had immediate access to the Wholesale distribution network covering 31 provinces in China
3) The E-Commerce platform would be rolled out in China in 2H2015 (Online model)
4) The acquisition of BWZ has qualified BWL to put in an application for a DS license in China  

The potential that could be exploited via the first 3 distribution networks is not small and should not be underestimated, iMO. – and these are not long shots…………….Direct Selling license may be a longer shot …but who knows.......................

Could all these progresses be made had the management stayed complacent in developing the business?

(vested)

Noted similarity between Best World and Nordic is they have same auditors, RSM Chio Lim 

With due respect, not audited by big 4

Indeed, Best World and Nordic use the same auditing firm- RSM Chio Lim – not a Big 4 – used to be Big 5 before the demise of Arthur Anderson.
 
But what could be inferred from this similarity?
___________________________________________________________________________________________________________________________________

[Boon]

3Q2015 (& 9M2015) results:
 
Revenue (SGD Million)
1Q2014 = 12.802
2Q2014 = 18.278   
3Q2014 = 19.229   (9M2014 =50.308)
4Q2014 = 24.957   (FY2014 = 75.265)
1Q2015 = 13.507
2Q2015 = 21.029
3Q2015 = 26.191   (9M2015 = 60.727)
 
NPAT (SGD million)
1Q2014 = 0.121
2Q2014 = 0.758 
3Q2014 = 1.123   (9M2014 =2.002)
4Q2014 = 2.052   (FY2014 = 4.054)
1Q2015 = 0.249  
2Q2015 = 2.106  
3Q2015 = 4.035   (9M2015 = 6.390)
 
EPS
1Q2014 = 0.06 cent
2Q2014 = 0.34 cent 
3Q2014 = 0.51 cent  (9M2014 = 0.92 cent)
4Q2014 = 0.93 cent  (FY2014  = 1.86 cents)
1Q2015 = 0.11 cent
2Q2015 = 0.96 cent  
3Q2015 = 1.83 cent  (9M2015 = 2.90 cents)
 
GPM:
1Q2014 = 74.0%
2Q2014 = 69.8% (1H2014 = 71.5%)
3Q2014 = 75.5% (9M2014 = 73.0%)
4Q2014 = 77.1% (FY2014 = 74.4%)
1Q2015 = 74.9%
2Q2015 = 75.8% (1H2015 = 75.4%)
3Q2015 = 77.1% (9M2015 = 76.2%)
 
NPM:
1Q2014 = 0.9%
2Q2014 = 4.1%   (1H2014 = 2.8%)
3Q2014 = 5.8%   (9M2014 = 4.0%)
4Q2014 = 8.2%   (FY2014 = 5.4%)
1Q2015 = 1.8%
2Q2015 = 10.0% (1H2015 = 6.8%)
3Q2015 = 15.4% (9M2015 =10.5%)
 
Cash & Cash Equivalent (SGD, million)
1H2015 = 34.543 (Debt = 1.5)
9M2015 = 41.424 (Debt = 1.5)
 
Interim Dividend:
1H2014 = SGD 0.3 cent per share
1H2015 = SGD 0.5 cent per share (67% increase)
 
Taiwan Revenue (SGD million)
1Q2014 =  2.418
2Q2014 =  4.157   
3Q2014 =  4.940   (9M2014= 11.515)
4Q2014 = 11.196  (FY2014 = 22.711)
1Q2015 =  4.465
2Q2015 = 10.244 
3Q2015 = 14.125  (9M2015 =28.834)
 
China Revenue (SGD million)
1Q2014 = 2.195
2Q2014 = 3.296   
3Q2014 = 3.117   (9M2014 = 8.608)
4Q2014 = 4.372   (FY2014 =12.980)
1Q2015 = 3.088
2Q2015 = 5.366  
3Q2015 = 4.805   (9M2015 =13.259)
 
Comments:
1) Wow ! Impressive set of results -beyond my expectation !
2) According to the Management : the stronger growth for 3Q2015 was attributable to the strong revenue contribution from Taiwan, China and Indonesia.  (it is good to see efforts have been put in to "revive" the Indonesia market)
3) NPM for 3Q2015 was at an impressive 15.4%, which lifted the overall 9M2015 NPM to 10.5%. And I believe this has contributed to the much improved NPAT/EPS.
4) NPAT/EPS for 9M2015 already surpassed that of FY2014 by more than 50%.
5) It looks like the growth momentum is still going strong especially in the Taiwanese market, and I would expect 4Q2015 to be a reasonably strong quarter as well for the Group.
6) EPS for FY2015 is likely to hit above 4.0 cents.
7) If DPS for FY2015 could be raised to 2.0 cents, at current share price of 29 cents, the yield is 6.9%.
8) Based on EPS= 4.0 cents => forward PE = 29/4 =7.25 which is inexpensive, considering the potential of the China market once a DS license is obtained.
9) Looking forward to the FY2015 results (with higher dividend payout, ha-ha! ) and the earlier approval of the DS license in China - to propel growth momentum to a new level.
________________________________________________________________________________________

[greengiraffe]

3Q2015 (& 9M2015) results:
 
Revenue (SGD Million)
1Q2014 = 12.802
2Q2014 = 18.278   
3Q2014 = 19.229   (9M2014 =50.308)
4Q2014 = 24.957   (FY2014 = 75.265)
1Q2015 = 13.507
2Q2015 = 21.029
3Q2015 = 26.191   (9M2015 = 60.727)
 
NPAT (SGD million)
1Q2014 = 0.121
2Q2014 = 0.758 
3Q2014 = 1.123   (9M2014 =2.002)
4Q2014 = 2.052   (FY2014 = 4.054)
1Q2015 = 0.249  
2Q2015 = 2.106  
3Q2015 = 4.035   (9M2015 = 6.390)
 
EPS
1Q2014 = 0.06 cent
2Q2014 = 0.34 cent 
3Q2014 = 0.51 cent  (9M2014 = 0.92 cent)
4Q2014 = 0.93 cent  (FY2014  = 1.86 cents)
1Q2015 = 0.11 cent
2Q2015 = 0.96 cent  
3Q2015 = 1.83 cent  (9M2015 = 2.90 cents)
 
GPM:
1Q2014 = 74.0%
2Q2014 = 69.8% (1H2014 = 71.5%)
3Q2014 = 75.5% (9M2014 = 73.0%)
4Q2014 = 77.1% (FY2014 = 74.4%)
1Q2015 = 74.9%
2Q2015 = 75.8% (1H2015 = 75.4%)
3Q2015 = 77.1% (9M2015 = 76.2%)
 
NPM:
1Q2014 = 0.9%
2Q2014 = 4.1%   (1H2014 = 2.8%)
3Q2014 = 5.8%   (9M2014 = 4.0%)
4Q2014 = 8.2%   (FY2014 = 5.4%)
1Q2015 = 1.8%
2Q2015 = 10.0% (1H2015 = 6.8%)
3Q2015 = 15.4% (9M2015 =10.5%)
 
Cash & Cash Equivalent (SGD, million)
1H2015 = 34.543 (Debt = 1.5)
9M2015 = 41.424 (Debt = 1.5)
 
Interim Dividend:
1H2014 = SGD 0.3 cent per share
1H2015 = SGD 0.5 cent per share (67% increase)
 
Taiwan Revenue (SGD million)
1Q2014 =  2.418
2Q2014 =  4.157   
3Q2014 =  4.940   (9M2014= 11.515)
4Q2014 = 11.196  (FY2014 = 22.711)
1Q2015 =  4.465
2Q2015 = 10.244 
3Q2015 = 14.125  (9M2015 =28.834)
 
China Revenue (SGD million)
1Q2014 = 2.195
2Q2014 = 3.296   
3Q2014 = 3.117   (9M2014 = 8.608)
4Q2014 = 4.372   (FY2014 =12.980)
1Q2015 = 3.088
2Q2015 = 5.366  
3Q2015 = 4.805   (9M2015 =13.259)
 
Comments:
1) Wow ! Impressive set of results -beyond my expectation !
2) According to the Management : the stronger growth for 3Q2015 was attributable to the strong revenue contribution from Taiwan, China and Indonesia.  (it is good to see efforts have been put in to "revive" the Indonesia market)
3) NPM for 3Q2015 was at an impressive 15.4%, which lifted the overall 9M2015 NPM to 10.5%. And I believe this has contributed to the much improved NPAT/EPS.
4) NPAT/EPS for 9M2015 already surpassed that of FY2014 by more than 50%.
5) It looks like the growth momentum is still going strong especially in the Taiwanese market, and I would expect 4Q2015 to be a reasonably strong quarter as well for the Group.
6) EPS for FY2015 is likely to hit above 4.0 cents.
7) If DPS for FY2015 could be raised to 2.0 cents, at current share price of 29 cents, the yield is 6.9%.
8) Based on EPS= 4.0 cents => forward PE = 29/4 =7.25 which is inexpensive, considering the potential of the China market once a DS license is obtained.
9) Looking forward to the FY2015 results (with higher dividend payout, ha-ha! ) and the earlier approval of the DS license in China - to propel growth momentum to a new level.
________________________________________________________________________________________

Congrats... just a question... could Taiwan be on-selling to mainland? Personally, I think Taiwan economy based on my reading has been facing quite a bit of headwinds as well and given the maturity of Taiwanese mkt, it is almost impossible for Taiwanese consumer not to have known BW products and their history...

Enjoy the ride while u can...

NB: I m always skeptical about MLM pdts as a whole and of course not to forget BW's history that was once backed by 2G Capital - our famous SAF BTC Captains Tommie Goh and Gay Chee Cheong (JIT, Hyflux etc...)

Odd Lots Vested
GG

[Boon]

Good question ! Could Taiwan be on-selling to mainland China? Honestly, I do not know but I doubt it.
 
BWL Taiwan is having its 9th Anniversary celebration this year. Since 2009, Taiwan has consistently displayed strong year-on-year revenue and profit growth. And FY2015 is on course to be yet another record-breaking year for this market.- with yearly revenue likely to surpass SGD 40 million for the first time.
 
Assuming yearly revenue of SGD 46 million for a population of 23 million. This is equivalent to
 
a)  SGD 2.0 per population per year ; or
b)  SGD 20.0 per every 10th population per year ; or
c)  SGD 200.0 per every 100th population per year ; or
d)  SGD 2,000.0 per every 1000th population per year.
 
It is of anybody’s guess as to how far BWL could further penetrate this highly competitive market with relatively high per capita and disposal income. My take is there appears to be still room for further growth for a while before it starts to go into decline.
 
Hopefully, the decline will not happen before the granting of a DS license in China. Longer terms - China is a much bigger growth platform going forward.
 
Meanwhile, it is good to see that efforts have been put in place to “revive” some of its mature markets - the showing of positive result from Indonesia market seems encouraging.
 
It seems that BWL has evolved itself from its older days, when it was once backed by 2G Capital, into its present days where it is armed with a very strong balance sheet and is embarking on another growth journey again.
 ______________________________________________________________________________________________________

[kyle]

[kyle]

they started 9 year anniversary from Oct 6th, and already got 200m (~8.6m SGD) sales. Next Qrt, TW market has a high chance to make another new record.

[sgpunter]

An impressive set of 3Q results for sure but what gets me somewhat bothered is that there could be leakage of the strong results as the price started spiking up on 30 Oct to 9 Nov from $0.225 to $0.290 with higher than usual volume.

[Boon]

If revenue and NPM could be maintained at above SGD75 million and 10% respectively for the foreseeable future – at current valuation of 30 cents, I would still consider this a relatively cheap stock, considering its strong balance sheet and further growth potential if a DS license could be granted for the China market in a not too distant future.
 
Here is my FY2015 projection– as always an analysis is only as good as its underlying assumptions
 
FY2015 (Projection):
 
Revenue (SGD million):
FY2005 =  55.098
FY2006 =  77.114
FY2007 =102.180
FY2008 = 96.063
FY2009 = 72.956
FY2010 = 49.549
FY2011 = 41.532
FY2012 = 48.218
FY2013 = 41.081
FY2014 = 75.265
9M2015 = 60.727
FY2015 = 85.000  (Assumed)
 
GPM (Gross Profit Margin):
FY2005 = 77.9%
FY2006 = 77.7%
FY2007 = 76.2%
FY2008 = 76.7%
FY2009 = 73.9%
FY2010 = 77.2%
FY2011 = 79.1%
FY2012 = 77.2%
FY2013 = 77.4%
FY2014 = 74.4%
9M2014= 76.2%
FY2015 = ????? (Should be around 70+ range)
 
NPM (Net Profit Margin):
FY2005 = 15.4%
FY2006 = 15.4%
FY2007 = 13.2%
FY2008 = 11.1%
FY2009 = 13.3%
FY2010 =   4.9%
FY2011 =   0.7%
FY2012 =   3.7%
FY2013 =   3.5%
FY2014 =   5.4%
9M2015 = 10.5%
FY2015 =  10.5%  (Assumed)
 
NPAT (SGD, million)
FY2005 =   8.464
FY2006 = 11.861
FY2007 = 13.504
FY2008 = 10.626
FY2009 =   9.671
FY2010 =   2.450
FY2011 =   0.274
FY2012 =   1.800
FY2013 =   1.429
FY2014 =   4.054
9M2015 =   6.390
FY2015 =   8.925  (Projection)
 
EPS (SGD, cent)
FY2005 = 5.50
FY2006 = 7.19
FY2007 = 6.55
FY2008 = 5.15
FY2009 = 4.79
FY2010 = 1.19
FY2011 = 0.13
FY2012 = 0.88
FY2013 = 0.70
FY2014 = 1.86
9M2015 = 2.90
FY2015 = 4.10  (Projection)
 
DPS (SGD, cent) - (Payout as % of NPAT)
FY2005 = 2.6      (47%)
FY2006 = 2.5      (35%)
FY2007 = 3.212  (45%)
FY2008 = 2.2      (43%)
FY2009 = 2.2      (47%)
FY2010 = 2.2      (185%)
FY2011 = 0.6      (448%)
FY2012 = 1.2      (135%)
FY2013 = 0.3      (43%)
FY2014 = 0.8      (43%)
FY2015 = 2.0      (50%)    (Projection)
 
Cash and Cash Equivalents (SGD million)
FY2005 = 19.003  (Debt = 1.4)
FY2006 = 21.712  (Debt = 1.0)
FY2007 = 35.323  (Debt = 1.7)
FY2008 = 30.610  (No Debt)
FY2009 = 36.079  (No Debt)
FY2010 = 36.733  (No Debt)
FY2011 = 31.975  (No Debt)
FY2012 = 28.241  (No Debt)
FY2013 = 33.283  (Debt = 3.5)
FY2014 = 40.975  (Debt = 6.0)
9M2014 = 41.424  (Debt = 1.5)
FY2015) = ?????
 
NAV per share (SGD Cents)
FY2005 = 17.44
FY2006 = 21.77
FY2007 = 22.06
FY2008 = 24.01
FY2009 = 26.18
FY2010 = 24.65
FY2011 = 23.63
FY2012 = 23.27
FY2013 = 24.11
FY2014 = 25.57
9M2014= 27.56
FY2015 = ????
 
Number of shares issued :
FY2005 = 165,000,000
FY2006 = 165,000,000
FY2007 = 206,249,997 (165,000,000 + 41,249,997 bonus shares)
FY2008 = 206,249,997
FY2009 = 206,249,997
FY2010 = 205,431,997 (Share buy back = 818,000)
FY2011 = 204,751,997 (Share buy back = 680,000)
FY2012 = 204,681,997 (Share buy back =   75,000 ; conversion of warrant into shares = 4,000)
FY2013 = 204,684,147 (Conversion of warrant into share = 2,150)
FY2014 = 220,183,864 (Placement of 15,500,717 shares at SGD 0.199 per share )
9M2015 = 220,183,864
 
Major Shareholders/Insiders
D2 Investment                   =       77,115,000   (35.02%)
Dora Hoan                        =        12,352,000   (  5.61%)
Doreen Tan                        =      12,352,000    (  5.61%)
Shi Jinyu                            =      15,500,717    (  7.04%)
Huang Ban Chin (COO)    =         9,200,000    (  4.18%)
D2 Siblings                        =            200,000   (   0.09%)
Sub-total                            =     126,719,717   ( 57.55%)     
Free float                           =       93,464,147    ( 42.45%)
Total No: of issued shares = 220,183,864      (100.00%)
 _______________________________________________________________________________________________________