Best World

09 Aug 2008 14:47 #155 by Mel
More analysis, and the business looks like it accelerated strongly from Q1 (which had looked like a slow down was happening). 1) The revenue for Q2 was $29.2 m, up from $25.5 m in Q1. 2) The net profit for Q2 was $5.6 m, up from $2.3 m in Q1.

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11 Aug 2008 00:01 - 11 Aug 2008 00:02 #176 by Mel
posted in aoaoaoao: I think the writing is on the wall. Just read the management\'s comment on the 2nd half challenges. Besides, operating in China is an uphill battle trying to secure Govt\'s approval. If successful, Best World has to guard against infringement issue in China. As I see, Best World\'s product could easily invite fake to be sold parallel in the market place especially multi-level, tracking becomes even more difficult. For China\'s strategy to work effectively, at least 3 years. Maybe best for Best World to just pull out to minimise high investment & administrative expenses. dydx: No one should say building a business is easy, especially in PRC. But can Best World make it big in PRC eventually? More than a fair chance, I think, if given enough time. Why the optimism in me, you may ask? My simple answer - Best World had tried cracking PRC before its IPO but failed, so the present management has learned from a bitter lesson before and should understand the risks and difficulties involved well enough. If Amway and Nu Skin can do it in PRC, I think Best World under the present management has more than a fair chance to succeed in PRC as well. Is PRC worth the risks and effort? The answer has to be \"Yes\". JTKY: agree with dydx that with the current management, Bestworld\'s chances of success in China will be fairly high. Besides the management, the products marketed must be good, and appeal to the targeted consumers. I\'m vested in Bestworld. In fact i\'m using their products too, and i have to admit their products are good.
Last edit: 11 Aug 2008 00:02 by Mel.

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11 Aug 2008 16:27 #179 by Mel
CIMB-GK report not as optimistic: Best World\'s 2Q08 results were in line with our expectations and consensus, accounting for 35% of our full-year forecast. 2Q08 net profit grew 21.1% yoy to S$5.5m on revenue growth of 6.8% to S$29.2m. 1H08 revenue from Malaysia and Singapore fell 18% and 8% yoy to S$13.3m and S$8.8m, respectively, due to easing consumer sentiment as a result of high inflation. While Best World is likely to remain reasonably profitable over FY08-11, we are ceasing coverage of the stock due to a lack of institutional interest. Our previous rating was Neutral with a target price of S$0.84, based on 9.3x CY09 earnings. Our forecasts have not been adjusted for 2Q08 results.

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11 Aug 2008 18:52 #182 by Mel
from, a posting by dydx: Best World operates as a mini-MNC now. Firstly, Best World as a regional business with Operating HQ in Singapore should be able to defray some qualified expenses (e.g. expenses incurred in relation to developing overseas markets, etc.) from Singapore taxes under some financial incentive schemes sponsored by EDB or IE Singapore. Secondly, by using appropriate transfer pricing arrangements between HQ and overseas subsidiaries/associates, it is possible to reduce/minimize income tax expenses at locations with high tax rates and therefore also on a group basis. The fact is - - In FY06, Best World paid income taxes amounting to 19.9% of pretax profit on group basis for the FY. - In FY07, during which rev. from the Indonesian market took off smartly, Best World\'s income tax expenses jumped to 27.1% of pretax profit on group basis for the FY. - In 1H-FY08, Best World\'s income tax expenses fell back to 19.4% of pretax profit on group basis. More importantly, in 2Q-FY08, income tax expenses came to only 13.3% of pretax profit on group basis. From the evolution of the group\'s tax expenses over the last 2.5 yaers, it is quite clear that Best World management has picked up some useful tax management knowledge and has actively implemented the appropriate tax minimization measures on a group basis. To me, this has to be good for Best World shareholders.

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12 Aug 2008 01:56 #197 by MacGyver
This is a company that I quite like. Been putting it on my radar screen for a year. Bought some when it collapsed all of a sudden a few months ago. The nature of the business is that it should enjoy strong cashflow as it collects from its distributors prior to giving out the commission. Operates something like a insurance company. Definately a Buffett type of investment. Problem is that most Singapore companies don\'t know how to grow regionally. Most simply tanked up after a couple of years. Not too sure whether it has something to do with our kiasu, kiasi culture. The Company hit a tipping point when they went listing in 2004. Sales and profitability soared in 04/05. Subsequently, they seem to run into some problems with their expansion... Growth slowed and forex issues started to appear. Does seem that the mgt is learning from the mistakes made and progress can be seen. At this valuation, it does seem too cheap. Trading at ex-cash around 3.5x PE. (Remember this company has a short cash conversion cycle) I also like the fact that the Company gives regularly dividends (interim and full year). As for the CIMB report, if you track the analyst, you will know this analyst\'s calls are so-so. I prefer to trust myself. :laugh: :laugh:

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31 Aug 2008 02:49 - 26 Sep 2008 02:54 #314 by Mel
1H08 results: very insightful briefing by executive director of best world, huang ban chin, can be found at this link:
Last edit: 26 Sep 2008 02:54 by .

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