Best World

[pianist]

Best World reported a loss for Q1.

Group revenue for 1Q2011 declined 19.2%, resulting in a Loss Attributable to Owners of the Parent Company of $0.6 million, vis-a-vis a profit of $0.9 million for the same period last year.
This was mainly attributable to the following factors:
• Price increase in the 4 markets of Singapore, Malaysia, Thailand and Vietnam with effect from 1 January 2011, led to a temporary weakened demand for the Group’s products;
• Slower business activity in the first quarter, due to the seasonal nature of our business and a short working month of February due to the Chinese New Year holidays;
• Increase in administrative expenses due to full contribution of expenses from new regions such as Korea, Philippines, Qingdao and Vietnam;
• Higher realised and unrealised exchange losses suffered by the Group as a result of appreciation in Singapore Dollar.

Just wondering if this is still a sustainable and feasible business to pursue?

[kazukirai]

Have moved the thread to the 'A-B' sub-forum under the 'Listed Companies' section.

[chimpy]

Latest quarter results seem to indicate earnings might have bottomed. A turnaround in sight? But this slight positive was negated by the absence of any dividend payout this HY. Balance sheet still solid with strong net cash/share. Company could well afford the latest dividend payout. Anyone following this company or spoken to mgmt lately? Wondering what's their latest dividend policy?

[dydx]

I just chanced upon this interesting news report (dated 22May12) on Best World from NextInsight.....
http://www.nextinsight.net/index.php?opt...0&Itemid=1

[Boon]

BWI has just released its FY2012 results.

It has resumed final dividend payout this year after failing to do so last year for FY2011.

Will this mark the turnaround of BWI? Can it sustain its current pace of recovery? Only time will tell.

- Share price = SGD 18.6 cents ( at market close on 26-Feb-2012 )
- Number of shares issued = 204,680,997
-
FY2012 results:
- Revenue increased 16.1% to $48.2 million on higher contribution from Taiwan and new markets of Korea and Philippines
- Net profit = SGD 1.8 million, up 556.9% ( as compared to SGD 0.274 million)
- Generated positive cash flow of $0.8 million from its operating activities.
- Debt free
- Net cash position of $28.2 million as at 31 December 2012
- Cash per share = SGD 13.8 cents per share
- NAV = SGD 23.27 cents per share
- Proposed final dividend of SGD 0.6 cents per share
- FY2012 total dividend of SGD 1.2 cents per share represents 6.5% dividend yield.(Based on closing price of SGD 18.6 cents)
- Group to ride on positive momentum to sustain current pace of recovery

http://info.sgx.com/webcorannc.nsf/Annou...endocument

(Vested)

[Boon]

With the acquisition by BWI of 100% of the equity interests in Zhejiang Solid Gold Pharmaceutical Co., Ltd. in China now completed, things could turnaround rather quickly for BWI if it manage to obtain Direct Selling License in China

Revenue (SGD million):
FY2007 = 102.180
FY2008 = 96.063
FY2009 = 72.956
FY2010 = 49.549
FY2011 = 41.532
FY2012 = 48.218
FY2013 = 41.081

GPM (Gross Profit Margin)
FY2007 = ?????
FY2008 = 76.7%
FY2009 = 73.9%
FY2010 = 77.2%
FY2011 = 79.1%
FY2012 = 77.2%
FY2013 = 77.4%

NPM (Net Profit Margin)
FY2007 =13.2%
FY2008 =11.1%
FY2009 =13.3%
FY2010 = 4.9%
FY2011 = 0.7%
FY2012 = 3.7%
FY2013 = 3.5%

EPS　(SGD cents million)
FY2007 = 6.51
FY2008 = 5.15
FY2009 = 4.79
FY2010 = 1.19
FY2011 = 0.13
FY2012 = 0.88
FY2013 = 0.70

DPS (Dividend Per Share, SGD cents)
FY2007 = 3.212
FY2008 = 2.2
FY2009 = 2.2
FY2010 = 2.2
FY2011 = 0.6
FY2012 = 1.2
FY2013 = 0.3

Cash and Cash Equivalents (SGD million)
FY2007 = 33.7 (Debt = 1.7 )
FY2008 = 30.6 (No Debt)
FY2009 = 36.1 (No Debt)
FY2010 = 36.7 (No Debt)
FY2011 = 32.0 (No Debt)
FY2012 = 28.2 (No Debt)
FY2013 = 33.3 (Debt = 3.5) (Net Cash per Share = SGD 13.9 cents)

NAV per share (SGD Cents)
FY2007 = 22.06
FY2008 = 24.01
FY2009 = 26.18
FY2010 = 24.65
FY2011 = 23.63
FY2012 = 23.27
FY2013 = 24.11

Number of shares issued :
As at 31-Dec-2013 = 214,683,147
AS at 28-Feb-2014= 220,183,864 following placement of 15,500,717 shares at SGD 0.199 per share.

Comments:
1) BWI was listed on 08-July-2004 on SGX-Sesdaq (IPO of 28 million shares at SGD 0.30 per share) and managed to achieve 4 years of consecutive growth since listing (2004 to 2007)
2) From 2008 to 2010, its revenues had been on downhill slide.
3) From 2011 to 2013, revenue stayed flat; profitability wise – managed to stay just above “breakeven” points. Managed to pay small dividend from its cash hoard.
4) Over the years, BWI’s GPM has been above 70%. With its high fixed cost, its bottom line has been constrained ( staying flat ) by its inability to grow its revenue over the last 3 years. With the successful completion of acquiring Zhejiang Solid Gold Pharmaceutical Company on 28th Feb 2014, it is in a step closer to obtaining Direct Selling License in China. Its ability to obtain Direct Selling in China would propel it quickly to growth path again.
5) Overall, it has a healthy balance sheet, with the “scalability” of its business model, once it obtains it Direct Selling License in China, things could turnaround rather quickly, IMO.

(Vested)

[Retired@52]

Sam Goi takes stake in Best World International.

http://www.nextinsight.net/index.php/sto...ernational

Vested.

[Boon]

The recent successful acquisition of Zhejiang Solid Gold (now renamed BWZ) completed on 26 February 2014 would have BOTH immediate and medium (to long) term effects on the Revenue (Top line) and Profit (Bottom line) of BWI.

Immediate Effects:
1) BWZ is principally engaged in the business of the development, manufacture and wholesale of its proprietary brand of dietary supplements in the domestic market of the PRC.
2) BWZ holds 36 dietary supplement licenses.
3) BWZ’s existing retail distribution network comprises of 153 agents and distributors throughout 31 provinces in the PRC.
4) Through these channels, BWZ achieved RMB 33.4 million in revenue and RMB 2.3 million in net profit after tax for the FY2013, net of expenses.
5) Incidentally, consideration paid by BWI to acquire BWZ was RMB33.4 million, based on FY2013 financial of BWZ, this translate into a net return of 6.9% and a PE ratio of 15.4
6) In connection with the acquisition, Mr. Shi Jinyu, the majority vendor to the acquistion who had subscribed for 15,500,717 new shares in the Group, at a subscription price of $0.199 per share, paid in cash, had also entered into a legally-binding service agreement on 13 August 2013 (“Service Agreement”) with BWI, under which he is entitled, inter alia, to an annual performance bonus, which is tied to the net profits after tax of BWZ for the calendar years 2014 and 2015, and is capped at a total of RMB 20 million.
7) How incentivized and motivated would Mr. Shi be in growing the top and bottom revenue of BWZ for 2014 and 2015 remains to be seen.
8) Revenue, profit and cost structure from this newly acquired Manufacturing/Wholesale business would be more pronounced in 2Q 2014 onwards when they would be recorded for all months within the quarter.

Medium (to long) Term Effects:
1) With the completion of the Solid Gold acquisition, BWI would be a step closer to becoming a licensed Direct Selling company in China.
2) Management would continue to work according to schedule for the Group’s China direct selling license application in FY2014
3) Direct selling in China is potentially a multi-billion dollar industry and the upcoming direct selling license, if obtained, would allow BWI to participate in the strong domestic consumption growth in China – the management believes that the Group is well-positioned to take advantage of the potential market opportunities in China to increase business turnover within the next few years.

Final Thought:
1) Only time will tell if this would turn out to be a good acquisition by BWI - potentially it sounds promising.

(vested)

[franko.yank]

My auntie use to work as a part time downline in their MLM many years ago. I think they were really overpaying their sales staff as she admit she is just "average" performance was getting 5k+ in commission every month, much better than her 8-5 job as accountant.

During 2008, they restructure and change the sales scheme so now the payout not worth the effort according to her.

[greengiraffe]

I have odd lots vested with Best World. Honestly, I am not impressed with the business model.

I think there is a rationale in paying high comm - probably coincided with Best World's glory days of high turnover growth and net profits. Back then, it was one of the darling stock backed by the then combination of 2G - Tommie Goh and Gay Chee Chong. Note here that I have never performed any correlation testing on your observations.

As for Sam Goi, he is the man with the midas touch in this bull market cycle so never under-estimate his ability.

The China acquisitions should be interesting but all that really matters is if anyone truly believe in MLM and again China...

GG

My auntie use to work as a part time downline in their MLM many years ago. I think they were really overpaying their sales staff as she admit she is just "average" performance was getting 5k+ in commission every month, much better than her 8-5 job as accountant.

During 2008, they restructure and change the sales scheme so now the payout not worth the effort according to her.