Best World International's share price surged 6.1% to $1.655 today for a 393% year-to-date return after the company released sterling 2Q16 results.
 Part of Dr Secret's range of skincare products, which have been Best World's best-seller for many years. Photo: Company Stellar 2Q16 results setting the stage for record 2016 performance Best World recorded its seventh consecutive quarter of earnings growth in 2Q16 as net profit soared 3.5x to $7.4m (2Q15: $2.1m).
For the quarter, revenue surged 145% to $51.6m, boosted by continued traction of its product take up in key direct selling markets, Taiwan (+242%) and Indonesia (+74.6%), as well as higher export orders from China (+188%).
Operating margin expanded to 21.5% (2Q15: 11.9%; 1Q16: 21.6%) as the direct seller benefitted from operating leverage, on the back of its scalable business model. Best World's distribution network continues to grow, with membership base of 421,208 as at end Jun (2Q15: 375,042; 1Q16: 412,904), spanning across 10 countries in the region. Operating cash flow improved to $2.7m (2Q15: $1m outflow), despite increased inventory in anticipation of higher orders in China and deposit paid for its newly acquired manufacturing facility in Singapore. Balance sheet remains healthy with net cash of $45.8m (1Q16: $46.6m), representing $0.208/share. In view of its solid performance, the group declared a higher interim DPS of 2¢ (1H15: 0.5¢), representing a 33% payout ratio, as well as a proposed 1-for-4 bonus issue. The multi-channel distributor expects its China direct selling license to become effective before end-2016, after the setup and verification of its nine service centres in Hangzhou city. Recent story: BEST WORLD: Minimal capex, short gestation in China |
