Best World

Best World's 1Q results:

1. China's "export segment": Instead of being minimal contribution as guided in annual report, there was a surprise S$6.8 million.

Wow! Shows how strong demand is.

2. Taiwan was bad. Declined 35%.

3. Indonesia looks like an emerging star. Up 105% from low base of S$1.1 million.

Best World briefing : Chief Operating Officer Huang Ban Chin explained in detail the conversion of "export" model to "China wholesale" model.

Actual sales in China was very good in 1Q2018. Thumbs up!

I read in Valuebuddies some comments and think that the missing piece in the poster's understanding is as follows:

1. Best World has a number of SKUs sold in China. Each has an import licence and an import agent.

2. When BW converts from "export" model to "China wholesale" model, the import agent changes to BW subsidiary (ie BW China Pharmaceutical).

3. About S$6m of "export" revenue was recognised fr China (to replenish fast-depleting inventory of certain SKU). This means the SKU(s) went through the previous agent, not BW China Pharmaceutical.

The previous agent has yet to be permanently replaced by BW China Pharmaceutical for those SKU(s). Once the licence has been switched to BWCP, the "export" revenue model for those SKUs will not apply anymore.

Another post in VB suggests that the true China revenue is much lower. The post is erroneous.

The post takes 'export revenue' in 4Q17 and 1Q18 and totals them up. Then divide it to get an average figure for each of the two quarters.

This is erroneous as it has not recognised that BW is stocking up in 1Q and 2Q18 under its "China Wholesale" business model.Under this model, the revenue is not recognised upon export from Singapore but only upon sale to consumers by BW subsidiary.

You can see this is clearly the case if you understand the change in revenue recognition from export model to "wholesale" model.

The 1Q18 export revenue was not the usual stocking up for the 2Q sales.

It was actually just to replenish the faster-than-expected depletion of export agent's inventory for certain SKUs of the Dr's Secret range.

Top buy of insti...
Top sell of retail...


Chart fr business times

Fund managers are chasing Best World hard!
Sorry to see retail take profit so early and pass the stock to fund managers.