Best World International's share price surged to as high $1.36 today from its previous close of $1.15 after the company was granted a direct-selling licence in China.
 Part of Dr Secret's range of skincare products which have been Best World's best-seller for many years. Photo: CompanyThe multi-channel marketing distributor has been granted its highly anticipated direct selling license in China by China's Ministry of Commerce, 9-12 months ahead of its schedule.The new license permits Best World to conduct direct selling within China, with the area of operations set to be announced in due course. Management expects sales to grow exponentially with this award given the size of the Chinese market. According to the grant, Best World has to set up service centres in Hangzhou city within six months from 7 Jun, before being able to commence direct selling in the region. On that front, we expect Best World's exports sales in China to switch to direct sales, which command higher prices, thereby boosting profitability.
Prior to receiving the prized direct selling license, Best World has been laying the groundwork by prepping its key Taiwanese distributors to launch their network distribution in China. Plans are also underway to convert its Chinese export agent and list of beauty salon owners into network distributors under its direct selling business model, to support the group's next leg of growth. Currently, there is only one broker coverage on the stock with a TP of $1.12, which does not factor in the potential of this China direct selling license. The broker previously estimated that its TP could be lifted by an additional 21% should Best World gets the license. |
