Best World

[piaopiao]

This is a site for financial ratios of multi-level marketing/network marketing/direct sales companies listed in the US stock exchanges.

http://www.mlmlegal.com/quotes.html

Best World current 52 weeks high low is $1.45 to $0.18, a 8 times spread. Some of the companies in the list the high low price spread is more than 8 times. Of course some of the prices of these stocks may be due to share consolidations. For example LifeVantage Corp spread is 53 times.

EPS of the more common names to Singapore consumers are Herbalife, Usana, Tupperware, Nuskin and all of them have very good EPS numbers of between US$2.89 to S$7.36 per share. Their PEs are between 11 to 18 times.

Best World EPS is $0.05 per share based on 2015 results and at price of $1.45 PE ratio is 29.

[Boon]

This is a site for financial ratios of multi-level marketing/network marketing/direct sales companies listed in the US stock exchanges.

http://www.mlmlegal.com/quotes.html

Best World current 52 weeks high low is $1.45 to $0.18, a 8 times spread. Some of the companies in the list the high low price spread is more than 8 times. Of course some of the prices of these stocks may be due to share consolidations. For example LifeVantage Corp spread is 53 times.

EPS of the more common names to Singapore consumers are Herbalife, Usana, Tupperware, Nuskin and all of them have very good EPS numbers of between US$2.89 to S$7.36 per share. Their PEs are between 11 to 18 times.

Best World EPS is $0.05 per share based on 2015 results and at price of $1.45 PE ratio is 29.

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Hi piaopiao,
 
Thanks for the table. Unfortunately, I don’t quite make sense what you are trying to do.
 
Firstly, why use 1.45, price at 52 Week High to compute BWL’s PE and compared it to other peer PE computed with price (lower) at different time line?
 
Secondly, I don’t understand which price have they used to work out the PE based on given EPS.
 
For example: AI INTERNATIONAL (YOUNGEVITY)
 
Price at end of Jan 2016 = 0.28
EPS = 0.01
ðPE should be = 28 and not 45.83
ð 
Even using 52 Week price of 0.41 => PE =41 and not 45.83
 
Using today’s prices, I have computed the above table.
 
True, trailing PE for BWI is 25 (expensive ), but its forward PE (FY2016) is projected to be only 11 (cheap) because of its high expected future earning growth relative to other peers. 
 
Can Nu Skin/Usana/herbalife/Tupperware match BWI’s forward PE of 11? If they couldn't, they are more expensive based on forward PE. That's the point.
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[Boon]

BWL International Convention 2016
Macau – Events Highlights Final
https://www.youtube.com/watch?v=S8ZCwP0wNF8
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[Boon]

EPS (based on fiscal year) changes only once a year.
 
Quarterly EPS is available every quarter.
 
But PE changes everyday because share price changes every day.

For trailing PE, a more up to date comparison would be to compute PE using EPS (TTM) instead of Trailing EPS (based on fiscal year).

EPS (BWI): SGD cents
1Q2015= 0.11
2Q2015= 0.96
3Q2015= 1.83
4Q2015= 1.69  (FY2015 = 4.59)
1Q2016= 2.71  {Trailing Twelve Months  (TTM) EPS = 0.96 + 1.83 + 1.69 +2.71 = 7.19}
 
Price = 113.5 cents
 
PE (TTM) = 113.5 / 7.19 = 16
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I have computed the above table using EPS (TTM). As can be seen, as at 07-June-2016, using share price of 1.45 (52 week high), PE(TTM) for BWI was at 20, still lower than the  highest of 24 (Nu Skin) but higher than the rest (15 ~ 17).
 
After the price correction of BWI, as at 10-Jun-2016, PE (TTM) of BWI has dropped from 20 to 16, while that of Usana dropped slightly from 17 to 16.
 
Nu Skin still has the highest PE (TTM) of 24, but BWI’s 16 is almost on par with the remaining 3 companies (15 ~ 16)

So, using PE (TTM) as the sole valuation metric, and taking into consideration of future earning growth rate, which is the cheapest among the 5 stocks NOW ? 
 
EPS (TTM) would be updated upon 2Q2016 results announcement in August. 

By then, if prices of the 5 stocks remain unchanged, relatively, which would likely to become "even cheaper"  ? 
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[shadow_walker]

Although I have not looked into Best World much, I thought it will be good to think about some questions on the MLM model.

1) Who does the company sells the products to? Does it sells to the distributor agents or is it recognized only when the goods are sold to the customer? This is an important question since the agents could have bought up a lot of the products to sell, shifting the inventory from the company to the agents.

2) MLM can also drive quick sales growth by growing its distribution team rapidly, given the additional incentive for recruiting people. Each new recruit that you get will buy the product for himself as well as sell it to its family, friends and relatives. In Herbalife case, it was alleged to be a pyramid scheme since more money is made from recruiting people than selling the products.

3) How sustainable is the distribution team? What keeps them with Best World other than the commission that they get paid? If another company offers higher commission, what will happen to Best World?

4) Is the company's products superior in the market? Say vs Korean offerings which are highly popular in China.

It is easy to drive sales growth for MLM, but the key is whether the company is able to achieve sustainable sales growth. Amway Berhad has been able to do so although their profit has not grown.

[chialc88]

Sharing and giving back to the society 回馈社会
BWL is a very old company.
Older value buddies and also those who plough thru every Singapore financial literature 
on stock and personal investment would had known BWL from AK promotions in his books and talks.

It had already enjoy a full run during those roaring good time.



This is not the first time BWL go into China.
In fact, D2 failed miserably during their first try.
D2 simply did not understand china market.
Both had not spend enough time and energy in china.
They deserved the failure and so do BWL deserved a lower than norm share price.
It's a fallen angle.
It failed.

**********************************

SW raised some questions on MLM model and I think most of you gotten the answers already.
If not, I would like to quote the bottomline aka outcome of BWL success:
As reported in ST on Wednesday (after yet another SGX query):
Doreen: "Whatever the share price, to us, it's just a paper value.
What is important to us is that we must make more profits, 
because that tell us our distributors are making money"

*****************************


I think this time, D2 might had learned their lesson going into China.
There is a high chance that BWL might not get the DS license within next Q.
There is also a small chance that D2 might failed in getting DS license in China too.

I'm not too concern.
Dora is an entrepreneur.
So long as she kept trying, she will get what she one.
It's just a matter of time.

**************************

Incidentally, I see the SGX queries especially the latest queries as +ve.
Our SGX guys definitely not into MLM business when they asked these questions.
(why +ve outcome? because as our SGX guys trying to learn more about MLM model,
this gives a chance for BWL to generate awareness for general public)

D2 are for corporate and biz transparency.
These basic 101 questions raised by our SGX guys will serves as a excellent channel for 
D2 to share their vision, dream and strategy.
Evidence by the facts that all major newspapers published BWL clarifications and
multiple interviews with founders, executives and also analyst in last 2 weeks.

Let's hope that with more people aware of the good things that Best World is doing, 
D2 can cheong and help more people along the way.






<vested - with my heart warming up to BWL vision>

 Love Compassion

[Boon]

Although I have not looked into Best World much, I thought it will be good to think about some questions on the MLM model.

1) Who does the company sells the products to? Does it sells to the distributor agents or is it recognized only when the goods are sold to the customer? This is an important question since the agents could have bought up a lot of the products to sell, shifting the inventory from the company to the agents.

2) MLM can also drive quick sales growth by growing its distribution team rapidly, given the additional incentive for recruiting people. Each new recruit that you get will buy the product for himself as well as sell it to its family, friends and relatives. In Herbalife case, it was alleged to be a pyramid scheme since more money is made from recruiting people than selling the products.

3) How sustainable is the distribution team? What keeps them with Best World other than the commission that they get paid? If another company offers higher commission, what will happen to Best World?

4) Is the company's products superior in the market? Say vs Korean offerings which are highly popular in China.

It is easy to drive sales growth for MLM, but the key is whether the company is able to achieve sustainable sales growth. Amway Berhad has been able to do so although their profit has not grown.

 
http://ir.herbalife.com/MLM-faqs.cfm
 
1)  See the above faq
2)  See the above faq
3)  Too hypothetical a question, I reckon – compensation is very important to distributors but it is NOT the ONLY factor that would drive/motivate/retain them.
4)  It has been reported that export sales of Korean cosmetics to China has increased. So are export sales of BWL’s line of products to China. 

http://business.asiaone.com/news/koreas-...cord-117bn
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[Boon]

Hi chialc88,
 
Interesting comments there.
 
To ask 101 type of questions to a homegrown company that had been listed on its exchange since 2004, really reflects poorly on the part of the regulator, I reckon.
 
If “unusual price movement” is the concern, then it should cuts both ways – i.e. on the way up and on the way down.  As a matter of fact, the speed of price “depreciation” was much faster than the speed of price “appreciation”.
 
The downward price movement was even more unusual, which in my opinion, should warrant for another round of “queries”
 
But nothing happened – WHY ?  Any take ?
 
On a different note, sales growth sustainability raised by shawdow_walker is not new and had been discussed before – and it would always remain a concern, a legitimate one indeed.
 
In the long run, China would still be the market that could provide long-term growth opportunities to the group. Hence, IMO, the granting of a DS license is necessary - but its timing is not that critical, at least not in the short run, but of course, the earlier the better.
 
BTW, D2 didn’t spend much time in China but Huang Ban Chin, the COO, did. I think without his China experience, BWI may not possibly have achieved what they have achieved so far in China.
 
http://blog.wenxuecity.com/blog/frontend...stId=23336
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[CityFarmer]

Risk management i.e. diversification, shouldn't be an after-thought. It should be always a permanent topic in board meeting agenda from day one, IMO.

It is a risky position at the moment, IMO, but I am pretty sure the management is aware of it. Based on the AR's Chairwomen message, I have noticed other markets, are also focused in the company growth plan e.g. Indonesia, and Dubai.

One point of observation, is on the following statement from the company's reply to SGX queries

"E-commerce has become an important tool to small and large business worldwide. In line
with management objectives to expand its business through the digital space, lifestyle
centres model of distributing products slowly becomes obsolete, leading to the closure of
some lifestyle centres."

Optimization of product logistics, is desirable, but not on the optimization of personal face-to-face interaction activities among management-to-members, as well as among members.

(not vested)

[Boon]

Agreed, diversification (risk management) shouldn’t be an after-thought and it is not the case in BWI, as evidenced by efforts put in to develop new markets and also to revive old markets.
 
But planning is one thing and outcome (especially short term ones) is another. As business environment changes, tactically, priority should be adjusted accordingly to suit.
 
If BWI could grow its top and bottom line quicker in the Taiwan and China markets, it should do so regardless of high market concentration risks. After all, it takes more times and a great deal more efforts to grow the other markets.
 
True, BWI is in a risky position now, as it is currently deriving most of its top and bottom lines from the Taiwanese and Chinese markets, and I reckon this would likely to get worse (riskier) before it gets better (if it could get better). 
 
But compared to following companies, its market risk exposure is relatively less concentrated as it has 10 other markets to “work on”
 
Yoma Strategic – Myanmar only
Croesus Trust – Japan only
Yanlord – China only
CRCT – China only
St****** – Australia/NZ
 
Just to name a few………………………………..
 
Bear in mind that, because of its sheer market size, once exposed to the high market concentration risk in China, it is hard to diversify away this risk.
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