Best World

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another EAO@1.36, reason as follows:
Previous Equal Access Offer was met with an encouragingly positive response, with the total tendered shares representing more than double the then maximum buyback amount of 54,410,011 shares.
After careful consideration and taking into account the remaining amount of surplus cash available, the prevailing market conditions and the circumstances surrounding the Company, the Directors are of the view that undertaking this subsequent Equal Access Offer would be an appropriate interim measure for the benefit of Shareholders, especially Shareholders who are in need of short term liquidity and/or who did not succeed in tendering or tendering all their shares for acceptance by the Company during the Previous Equal Access Offer, to have another chance at tendering their shares

I think this is a nice gesture for those shareholders who wanted out.  The price is definitely grossly lower than most people expected, but it does serve it's purpose for those shareholders who wanted out.

I'm not vested any more but if you give me a chance, I would definitely take a bite at a price higher than $1.36.  Big Grin

Unfortunately, not going to wait for the trading resumption as there are clearly no indication of this possibility -  ZERO chance.  Tongue

[Image: bwl-franchisee-hunan-shaoyang.jpg]

The motivation behind those actions are clear. Disappointing development all around.

Please do your own due diligence. Any reliance on my posts is at your own risk.
The BT article provides a concise summary of the various issues but as a shareholder, I do feel that the words "questionable dealings" are quite discouraging*.

I am not sure whether even making progress in the licence will definitely put an end to the saga as there is still the disclaimer of opinion(DOO), e.g. unsure how many SGX listed companies are currently trading with DOO and the difficulties they are facing as a result. The best DOO implication articles I can find so far are below, though they are not Singapore-based articles. Given the implications of DOO, I think BW's options are rather limited - be it finding investors, relist in other exchanges, etc.

Though the price is disappointing, if it is going to end(delisting), I'd hope it ends sooner than later as I don't think dragging on is beneficial to any stakeholders - owners, shareholders, company, etc. It doesn't make sense to maintain a listing status when the company cannot(or extremely difficult) raise funds, nor resolve existing issues(i.e. get licence as it depends on Chinese govt) for resumption.

Realistically, I guess the best course of action is probably to accept the situation, move on and find the next "BW kind of growth stock" but of course, finding a gem is easier said than done.

The results of the ongoing audit remains to be seen(though I am not very optimistic regarding DOO) and hopefully, shareholders can attend this year's AGM in-person where it wld be easier to talk to the mgmt directly.

In any case, revenue & profit for 4Q2021 vs 4Q2020(4Q is traditionally BW's super Q) have trended downwards(cld have gone down even more if not for reclassification) - is it a temporary blip or the beginning of the end of the spectacular growth story ? I wld be keen to see the coming 1Q2022 results. 


Best World to buy back 10% of its shares for S$1.36 each
"....SGX RegCo, raised concerns over the legality of its business model in China.....

Best World said on Tuesday that there is no assurance it will be able to raise the necessary external financing for the company to undertake any delisting exercise following this offer....

Short-seller Bonitas Research also cast doubt on the company's skincare product distribution model in China and its financials, which culminated in an independent review that uncovered questionable dealings."


Auditor's Opinion
".....A disclaimer of opinion or an adverse opinion indicates that the financial statements may not be, or are not, free from material and pervasive misstatements. Investors should pay careful attention to listed companies with these types of auditor’s opinion when making decisions about investing in the listed companies. Under the Listing Rules, if a listed company publishes its preliminary annual results announcement and its auditor has issued, or has indicated that it will issue, a disclaimer of opinion or an adverse opinion on its financial statements, its securities will be suspended from trading....."


Why Do Auditors Disclaim?
"...Disclaimer opinions are rare, so two in one week is notable. These opinions are rare because they are useless to companies and investors, so companies generally will not accept them. Regulators and exchanges are unlikely to accept a disclaimer opinion, which explains why these stocks are suspended and are likely to remain so..."


FY2021 Results
"Review of the performance of the Group
...The Group recorded a 9.9% decrease in revenue for 4Q2021 vis-à-vis the same period last year mainly due to a decline in revenue from China and Taiwan. A reclassification of consultancy fees paid relating to the Franchise Segment ..... the Group’s revenue in 4Q2020 would be higher at $219.6 million and the Group’s revenue in 4Q2021 would have declined by 16.2% instead of 9.9%...."


China's Hangzhou starts mass Covid-19 testing, Shanghai cases drop

*Note : This post has been edited at a later date to include BW's clarifications to the article :
bwl clarifications -

The Board wishes to confirm that the outstanding issue faced by the Company is its transition to the direct selling model in China, and there are no on-going investigations into the Group in connection with the aforestated allegations or arising from the findings of the independent review.

... the Board wishes to reiterate that it is still considering a delisting and will be exploring all feasible options to achieve the same, including a delisting under Rule 1309 of the Listing Manual of the SGX-ST.

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To me the weird thing is how the company doesn't wish to employ external financing to do a buy over.

With their free cash flow generation and cash reserve of SGD 474 million, they could have used 50% of 2 years of free cash generated to buy over the remaining stake at $2 per piece. Any sane bank would have given them a secured financing of $100-$200 million, 4% rate at 2 years period for a buyout. The majority shareholders would then be able to enjoy a business which gives 14-15% cashflow yield for themselves at $2 per share valuation

However, what happened is a repeat of a $1.36 offer to buy out 20% stake.

The actions don't match reality and it is a red flag that either the board is shareholder unfriendly to OPMI or that there is a fraud like nature that no Singapore financial institution wants to approach them for a business opportunity (FYI Starhub has a worse cashflow generation ability is able to tap on unsecured bank loans of 1.30-2.78% per annum, based on annual report)

Its pretty difficult in investing, if a company is growing its profits well, individual investors have to ensure that the structure is not against them as in Best World case, where you find a Gem but you are unable to extract value as you are held hostage by shareholding structure.
Err CY09...

See post #1135, 1113, Karlmarx

"OPMIs are at a severe negotiating disadvantage since the shares have been delisted for a long time. Their eagerness to get out of an illiquid stock gives them no leverage in getting a good offer.
If I were an OPMI, I will be quite glad to get out at the last transacted price. Of course, if your average price is much higher than last transacted price, you may not feel the same way.
But if I were the offerors, I will probably offer 30% less than last transacted price, because I know I could probably take advantage of the opmi's eagerness to exit.
It was mentioned in the announcement that the offerors will require financing in the event of an offer. So some institutional investor/bank will have to do their DD and be assured that they could pay back any loan. If they can't secure financing, opmi could remain stuck, while they pay themselves nice bonuses.
Which ever way this story develops, the controlling shareholders look like winners to me. "

from BW's point of view, there is no need to pay more than $1.36 per share since long-stuck minority holders are already selling at this price... just do a few times of 20% stake buy-back, repeat, slowly wear them down, buy back sufficient,

many are thanking to BW and SGX regulators for this get-out arrangement! Big Grin

minority holders forget that the main reason why they want to get-out is bcos, there is simply no dividends distributed from FY2021/22... while the founders are paid millions and increasing....HUAT HAR!! Big Grin

such is the sorry state of play for this company and it's unfortunate investors..

BW has to maximize this to their benefits of course! double HUAT HAR! Big Grin
1) Try NOT to LOSE money!
2) Do NOT SELL in BEAR, BUY-BUY-BUY! invest in managements/companies that does the same!
3) CASH in hand is KING in BEAR! 
The Q&A provided by the Remuneration Committee is one of the most unthought of reply I have seen, under page 9 and 10

In 2019, yes they may have compared it. But using it in 2022, Best World Co-chairwomen are now the second and third highest paying executives among SGX listed companies. They are paid more than UOB, Wilmar, OCBC CEOs/Chairman and yet manage a business which is less than 10% of the profit scale. On a global scale, comparable CEOs in their industry are paid half of what Best World pays their management.

It shows the IDs were not actively benchmarking. The second question, I would ask of is which are the 22 companies were they comparing? and how did it stand now in 2022 of Best World's remuneration vis-a-vis these 22 companies. I am pretty sure the execs are now paid twice or thrice of these 22 SGX companies executives.

If IDs role is not to help minority shareholders as evident in TTJ and it seems that Best World IDs are also not helping minority shareholders either, I do think that Singapore needs to review its investment landscape and either allow investor activism to kick in or grant SIAS more teeth rather than it just being an advocacy group.

The difficulty in investing in founder led Singapore companies has grown with the tricks played by these founders and it is not good news for Singapore investors. This is probably why many well run but stingy Singapore companies trade similar to the market's valuation of China peers. It shows the market do not trust many Singapore companies outside the Temasek Sphere

I am finding it difficult to invest in Singapore-run companies with the exception of Temasek owned ones. Unfortunately, the SCM incident also shows this investment angle is becoming difficult. And to choose between a Singapore run and China run credible companies, I would prefer the chinese ones because they are more appreciative to OPMI such as yangzijiang and have larger scale.
I am glad that the episode has caught the attention of SIAS, and especially appreciate the set of comprehensive questions, relative to the 1/2-liners generic questions(some of whose answers can even be found in FS/AR) submitted by some shareholders. It provides a good learning base for retail shareholders on asking hard-hitting, thorough questions.

Such detailed questioning from retail shareholders seem rare and for a long time, I have been wondering why large shareholders e.g. Top 20, are not doing this, given their stake in the companies, with some going into millions of dollars' worth.

Granted there are examples of impressive analytical pieces as "expected of Top 20", by virtue of the huge vested interest, e.g. "How the Mindboggling Merger Exchange Ratio was Computed" (, these are rather rare.

Understandably such an endeavour take up a lot of time, while it may not be "worthwhile" for retail shareholders with small shareholdings, it appears even the bigger shareholders are not keen. Perhaps involvement with more institutional investors might help ?

I do share the same view that it is indeed getting challenging to invest in SG-run companies, particularly when the "rah-rah" 200x-201x years are behind us.

For the record(so as not to get called out as being inconsistent), I had submitted a few pages of detailed AGM questions to a few companies only to find out rather disappointingly that most questions come from myself. At the same time, I quickly learnt that such undertakings are unsustainable as a lone effort.


"...One of the reasons is that our environment is different from the UK, where institutional investors play an important role in challenging corporate governance disclosures and practices of companies. Shares of UK listed companies are mostly held by institutional investors and therefore such investors have considerable influence there.

This is not the case in Singapore....."

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