Best World Intl

[winston]

From CMIB:-

Best World Int’l (S$0.75) - 1QFY08 results - Watch out for higher expenses

Best World’s 1Q08 results were below expectations, accounting for 13% of our fullyear forecast due to lower-than-expected gross margins. Traditionally, 1Q accounts for 15-16% of full-year net profit. 1Q08 net profit grew 8.1% yoy to S$2.3m on
revenue growth of 32.3% to S$25.5m. Gross margins were 76.4% vs. our estimate of 78.3%. While we expect strong sales to continue, we are cutting our FY08 earnings estimate as we anticipate higher packaging costs and freight charges due
to higher oil prices.

Our target price drops to S$0.84 (from S$1.21) following an 11-19% downgrade in our FY08-09 EPS forecasts. Given the de-rating of direct sellers in recent months, we have lowered our target multiple to 9.3x CY09 earnings from
11x, still at a 20% discount to larger peers. Downgrade to Neutral from Outperform.

[winston]

Not vested.

Director Hoan Beng Mui Dora of Best World Int’l Ltd has increased her stake in the company from 5.504% to 5.882% through the open market.

[winston]

Not vested.

Best World's Q2 net profit up 21%, sees better FY08 results
By ANGELA TAN


Best World international Limited on Friday reported its net profit for the second quarter ended June 30, 2008 rose 21 per cent to $5.47 million.

Revenue for the quarter climbed 6.8 per cent to $29.21 million.

As a result, for the first six months of 2008, net profit increased by 17 per cent to $7.74 million, compared to $6.8 million a year ago. Net profit margin was 14.2 per cent and earningper share was 3.75 cents compared to 3.21 cents a year ago..

For 1H2008, the group recorded a 17.4 per cent increase in revenue to $54.7million.

The slower than expected growth for 2Q2008 was attributable to negative growth in its key markets of Malaysia and Singapore as a result of weak consumer sentiments due to pessimistic global outlook and high inflation. However, this was compensated by a strong recovery in Indonesia for June and overall increased revenue contribution from other markets in 2Q2008.

Although 2H2008 will be an even more challenging period for the group moving forward, Best World's management remains cautiously optimistic. The group expects to achieve better performance in FY2008 compared to FY2007.

[millionairemind]

Singapore
November 6, 2008, 6.15 pm (Singapore time)

Best World's Q3 net profit flat; to keep dividend policy
By ANGELA TAN


Direct selling group Best World International Limited on Thursday reported net profit for the third quarter ended September 30, 2008 was at S$1.89 million, unchanged from a year ago.

Group revenue increased 4.3 per cent to $23.05 million.

The slower than expected revenue growth for 3Q2008 was primarily due to uncertainty of the global economic conditions, resulting in weaker consumer demand for its products in Malaysia.

The weaker demand was also partly attributable to the group's price increase exercise in 3Q2008 in several key markets due to the appreciating Singapore Dollar against the local currencies of markets itoperates in.

The group maintains a strong balance sheet and working capital position with S$27.2 million in cash & cash equivalents.

With its strong operating cash flow, the group intends to maintain its dividend policy of distributing 30 per cent of its profit attributable to equity holders for FY2008 as dividends to shareholders.

[millionairemind]

November 9, 2009, 5.57 pm (Singapore time)

Best World Q3 net profit slips 40.9%

By LYNETTE KHOO

Best World International posted a 40.9 per cent decline in net profit for the third quarter ended Sept 30 to $1.12 million, dragged by weaker sales.

Revenue fell 37.2 per cent from a year ago to $14.48 million, due mainly to a decrease in revenue contribution by Indonesia due to a change in cosmetic regulations, greater challenges placed on product registration and importation of skincare products and a longer holiday season all falling in the same quarter.

Given the challenging market conditions, management will focus on strengthening internal control measures and procedures to achieve better cost and operational efficiency, launch new products in the pipeline for the remaining year, increase awareness of existing products, and enter new markets, Best World said.

[winston]

I used to have a small position in this company, to follow their story.

When I extrapolated on what they can do, I was looking at an Amway or Avon.

However, I soon realized that there were big holes in my assumptions and I decided to withdraw my small position.

[cif5000]

there were big holes in my assumptions

Winston, could you tell us more on your ass-holes, I mean the assumption holes? I also have a little bet on this one.

[winston]

Hi cif5000,

Dont quite remember. It has been a while since I sold this counter ..

I think it was because their products are not something that you would regularly buy. Hence, the sales numbers may not be there the next year, if you dont have another
"hot" product to sell next year.

Take care,
Winston

[bluechipstamp]

I used to have this too, but exited shortly after 2Q09 results. The main reason for my exit then (IIRC) is that BW doesn't seem to be able to sustain her revenue in any of the geographical regions, once it hits maturity stage. Revenue per member has been declining in all mature regions.

I compared it to NuSkin's Asian operations at that time (which I deemed to be mature in SG/Malaysia). From my old notes:

NuSkin (S'pore, Malaysia + Brunei) revenue:
2006: USD 33.2m (SGD 52.8m, fx = 1.59)
2007: USD 39.3m (SGD 59.2m, fx = 1.51)
2008: USD 43.8m (SGD 62m, fx = 1.42)

BestWorld (S'pore + Malaysia) revenue:
2006: SGD 56m
2007: SGD 45.6m
2008: SGD 36.7m

During this period, BW made up for the shortfall via her explosive growth in Indonesia (For a MLM, it's typical to have exponential growth initially in a new region). Now, it looks like Indonesia has matured & slowed down tremendously in 3Q09.

I reasoned that if BW really has good competitive products, it would behave more like NuSkin during steady state. That is unfortunately not evident in any of the countries it goes into.

[helios]

(For a MLM, it's typical to have exponential growth initially in a new region). Now, it looks like Indonesia has matured & slowed down tremendously in 3Q09.

Fully agreed. MLM is more successful in M'sia than in S'pore. Perhaps, the city dwellers are more brands conscious individuals who are awared of the shopping experience in-store, an expressive form of retail therapy.