lotustpsll wrote: Read in other forums that discussions on BW have degenerated into whether the group is engaging in illegal practice in China. Although it is good to identify potential operating risks but I sense it that it is the intention of certain quarters to push the price down for their own interests. I have mentioned before regulatory compliance of DS business model is absolutely a must and BW must ensure that this function is fully robust.
Am sure Dora and Doreen are fully aware of the importance of regulatory compliance and to imagine they are willing to risk it all in their current station of life – this is just not credible or logical analysis.
I hope BW will continue to deliver results that matter in a measured way – not just to focus and hit market share targets. Many corporate failures were due to such obsession with market share targets.
"Be greedy when others are fearful"....the best is yet to come!
In summary, key points of the SAIC statement include, but are not limited to the following:
1. The clear objective to crackdown on pyramid selling schemes disguised as investment opportunities, job offers, job referrals and recruitment activities, especially those targeted at new graduates;
2. Investigate major recruitment websites and establish clearer legal responsibilities of
businesses, organizations and individuals that operate such websites;
3. Businesses, organizations and individuals involved in the dissemination of such false
information shall be severely dealt with; and
4. Increase the awareness of pyramid selling schemes amongst students.
For the purpose of clarification, hallmarks of a pyramid scheme are as follows:
1. Companies which profit from act of recruitment and not sale of products or services;
2. Low quality products sold at a high price;
3. Products purchased are not for consumption but as a requirement to participate in the scheme;
4. Products are sold without a reasonable product return guarantee; and
5. High startup/entry fee to participate in the scheme.
In response, the Company would like to highlight that although we hold a direct selling licence, we have not converted our business in China to direct selling yet. Presently all DRs’ Secret, Avance and Optrimax products are available for purchase by customers through DRs’ Secret outlets and workshops. As such, the above SAIC statement has little or no impact to our China business.
The Company also wishes to highlight that all current preparations for conversion to direct selling are in line with the above SAIC statement. All service outlets set up are subject to verification by local authorities beforehand and are not within or near to any school compound.
Our membership criteria, upon conversion to direct selling, shall also not accept students, civil servants, police and military personnel etc.
The Company would like to reiterate that it adheres to strong principles of legal business, transparency and corporate governance and is fully compliant with the rules and regulations of business operations under China’s laws.
CIMB report: China’s crackdown on pyramid schemes has minimal effect on Best World as its direct-selling model is unlike a pyramid scheme, according to management. Maintain Add and TP of S$1.80. Current share price an attractive entry point.