Best World

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Rainbow 
I brought BWL because of Dora story.
So long as Dora is still passionate about what she belief I think BWL should be fine.

I asked myself, 
how many stocks in the market that gives the type of confidence
that mid to long term perspective will be better than today?

Not many listing come up.

Especially during current volatile environment.

The only question that I have is whether I should take profit or buy more.

A famous blogger advocate when the stock rose 100%,
then one should sell 50%.
He called this "zero-cost" strategy.

Another even more famous blogger Dr Chan says that this does not make sense.
Dr Chan advocate when the stock rose 4 times, 
then one should sell 25%.
He also called this "zero-capital" stock.

So, I repeat my question, should I take profit or buy more?

I'm inclined to take profit based on "zero-cost/capital" theory.
However, I'm very mindful of what CF says in term of mid/long term benefits.

Am I going to lost sleep thinking/scratching my head?

Tell me after you watch this:


Heart Love Compassion
感恩 26 April 2019 Straco AGM ppt  https://valuebuddies.com/thread-2915-pos...#pid152450
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BWZ has been granted a first DS license allowing it to operate its DS business for the 6 approved Aurigen products in the city of Hangzhou.
 
The limited geographical and limited product range approved at the beginning under the first DS license is typically a reflection of an over regulated DS industry in China – but who would say no to it.
 
The points is both geographical areas and product range could subsequently be “expanded”
 
Few key issues here:
 
1) Services centers:
 
“Currently, the Group is exporting its core direct selling brand lines to an agent, who in turn distributes them to members through a network of beauty salons, nail & hair salons and spas all over China. Under the direct selling business model, the Group will convert these networks of spas and salons into distributors and service centres of Best World’s products. “
 
This is not an issue since they could be readily convertible from existing networks of spas and salon.
 
2) Permissible product range approved under the first DS license:
 
If my interpretations of the rules are correct, BWL line of products could only be marketed by BWZ in China under its DS business model, if these products are manufactured by BWZ itself or manufactured by its parent company, BWI or BWL. Assuming both contract manufacturing and OEM products are not in compliance - to satisfy this criterion, Tuas factory seems to be the solution. Hence, this is an issue of “when”.
 
(Note: I could be completely wrong on this.)
 
3) Limited geographical approval at the beginning:
This is the same for every new DS license recipients – just have to apply for more permits and grow from there.
 
4) When could “export mode” of BWL line of products be readily convertible to DS “mode”
 
When both service centers and BWL line of products have been approved – looking at time line in 2017.
 
In theory, once the service centers have been approved, BWZ could commence its DS business for the approved 6 Aurigen products.
 
Once the BWL line of products could be admitted into the list of approved DS products, the “export mode” could then be converted into the “DS mode”.  
 
If it takes more than one approval process or step to get there, so be it. Without the first step, there will be no second step………………………..
 
5) What are the near term impacts of first DS license approval on bottom line?
 
According to the management – no impacts on FY2016 – but IMO it could be more profitable to prolong the “export mode” in the near term as the margins are higher.
 
DS mode for BWL line of products would likely be operational in 2017 and beyond. Impacts would be felt from FY2017 onwards, I reckon.

In short, it is not necessarily a net positive in converting early from "export mode" to "DS mode". For FY2016, earning contribution from DS mode in China could be zero, but earning contribution from export mode to China could be a lot more.     
 
6) Long term prospects:
 
“Since 2006, 77 direct selling licences has been approved as at 26 April 2016 by MOFCOM, with only 16 licences issued to global direct selling companies. The direct selling market in China, bolstered by a rising consumer culture and more favourable government policies, had registered a 19% growth in 2015. In 2015, direct selling companies registered a total of sales of more than RMB220 billion”
 
RMB 220 billion is equivalent to about SGD 44 billion or about SGD 570 million per operator.
 
In another words, DS activities in China are closely regulated, making the receiving of DS license a key metric for growth in the country.
 
Group CEO and Managing Director, Dr. Dora Hoan commented, “The approval of our China direct selling licence marks an important milestone for our Company. We are poised to tap the mammoth market potential and have laid the groundwork well ahead of this approval by completing the registration of all our products. We believe in the potential of China’s large and growing market will lay the foundation for growth of the Group in the next 5 to 8 years and will continue to expand our footprint in the country as we remain focused on growing the future of Best World and enhancing shareholders’ value.”

Dr. Doreen Tan, Group’s Co-Chairman and President, added “The approval of our licence is a culmination of our efforts in the China market over the past several years. Building on our success in our other key markets such as Taiwan and Indonesia, we look forward to improving the wellbeing of Chinese customers with our brand lines, driving unprecedented growth and at the same time maintaining the highest standards of integrity in the direct-selling industry.”
 
7) Valuation:
Based on annualizing 1Q2016 EPS of 2.71 cents
ðprojected FY2016 EPS of 10.84 cents
ðShare price = 133 cents
ðForward PE = 12  ( undemanding considering its growth potential)
_____________________________________________________________________________________________________________________
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.
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Boon
(01-07-2016, 10:24 AM)MOV Wrote: http://infopub.sgx.com/Apps?A=COW_CorpAn...4b312c0f79

The Board of Directors (the “Board”) of Best World International Limited (the “Company”, together with its subsidiaries, collectively the “Group”) wishes to announce that Best World (Zhejiang) Pharmaceutical Co., Ltd. (全美世界(浙江)药业有限公司), (“BWZ”), wholly-owned by the Company’s wholly-owned subsidiary, Best World Lifestyle Pte. Ltd., has on 30 June 2016 been granted its direct selling licence (直销经营许可证) (the “PRC Direct Selling Licence”) by the 中华人民共和国商务部 (Ministry of Commerce, the People’s Republic of China (“MOFCOM”)). Under the PRC Direct Selling Licence, BWZ is permitted to conduct direct selling in such areas in the People’s Republic of China (“PRC”) as shall be announced in due course on MOFCOM’s website on the administration of direct selling industry (商务部直销行业管理信息网站) (http://zxgl.mofcom.gov.cn/) (“MOFCOM’s Website”), for such categories of products as shall be announced in due course on MOFCOM’s Website. Pursuant to the grant of the PRC Direct Selling Licence, BWZ is not permitted to commence direct selling until BWZ has set up the requisite service centres in Hangzhou city within six (6) months of 7 June 2016, such service centres to be subject to the inspection and report of the Department of Commerce of Zhejiang Province, PRC. The grant of the PRC Direct Selling Licence is not expected to have any material effect on the consolidated net tangible assets and earnings per share of the Company for the financial year ending 31 December 2016. The Company shall make further announcements on the PRC Direct Selling Licence as and when there are any material developments. 

Cheers buddies!


The granting of the first DS license from the central government (the first step) has always been the hardest.
 
Therefore, this should be considered a MASSIVE milestone for BWI - for being granted a DS license for its China subsidiary, Best World (Zhejiang) Pharmaceutical Co., Ltd. (全美世界(浙江)药业有限公司), (“BWZ”) – regardless of limitation in its INITIAL “scope”.
 
So what are “such areas” andsuch categories of products” being granted under the FIRST DS license for BWZ?
 
Area:
Hangzhou City
 
Categories of products:
6 health supplements manufactured by BWZ (Aurigen line of products – and not BWL line of products)
 
http://www.chndsnews.com/guancha/2016/0629/66003.html
 
To conduct DS in other areas beyond Hangzhou city, BWZ would need to apply and obtain the DS permit for each provincial branch office in which it wishes to operate – this should be an easier process after the granting of the first DS license. (note: Nu Skin China first started in Shanghai City).
 
To my understanding through further research (and I could be wrong on this), to increase the range of products that BWZ could market under its DS model in China, it would have to apply and obtain the necessary prior approval from the local authority – a much simpler process after the granting of the first DS license. However, these should be products manufactured by BWZ itself, or products manufactured by its parent company (i.e. BWI or BWL). OEM products do not qualify.
 
As most of BWL products are OEM - hence the need for the Tuas factory – to qualify products manufactured by the Parent Company.
 
http://www.mofcom.gov.cn/article/swfg/sw...6174.shtml

http://www.js315ccn.com/html/direct/deta...3448.shtml
 
In another words, the granting of the first DS license has not quite put BWZ into a position where it could sell BWL line of products in China under the DS model – nevertheless, it was a giant step closer - there are still works to be done to get there.
 
When could this happen?
 
The grant of the PRC Direct Selling Licence is not expected to have any material effect on the consolidated net tangible assets and earnings per share of the Company for the financial year ending 31 December 2016.”
 
"Not within this year" - according to the management.
 
Likely to be next year – 2017 – I reckon – by then the Tuas factory should be up and running.
 
Is it a near term concern ? Not at all (continue operating under the export model – could be more profitable in the near term)
 
Direct selling in China is potentially a multi-billion dollar industry and the granting of a DS license would position  BWI a step closer to participate in this strong growth in China ,driven by strong domestic consumption, for many years to come. 
____________________________________________________________________________

The management knew about the service centres. During the investment seminar that I attended, COO stated that one reason BWL started small is the requirement for service centers. If they have gone bigger, they would face logistic nightmare in setting up the service centres which needed to be  audited.

Personally, I think that short term growth will continue to be supported by Taiwan. COO mentioned that they are much hungrier and passionate than Singaporean when it comes to direct selling. Mid and long term, China growth would be interesting. I am optimistic as they already have customers for their products through the export model. Having said that, anything can happen.

不怕一万,只怕万一。

(Vested)
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"COO mentioned that they are much hungrier and passionate than Singaporean when it comes to direct selling."

is it bcos the product is excellent or the DS commission structure is attractive?!! Big Grin
1) Try NOT to LOSE money!
2) Do NOT SELL in BEAR, BUY-BUY-BUY! invest in managements/companies that does the same!
3) CASH in hand is KING in BEAR! 
4) In BULL, SELL-SELL-SELL! 
Reply
Dun forget the massive exposure to China. The risk of further slowdown is very high.

A good example is OSIM which has been affected to a large extent. Matter of time before best world gets hit I reckon.

YMMV

Sent from my MotoG3 using Tapatalk
Virtual currencies are worth virtually nothing.
http://thebluefund.blogspot.com
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(03-07-2016, 12:52 PM)BlueKelah Wrote: Dun forget the massive exposure to China. The risk of further slowdown is very high.

A good example is OSIM which has been affected to a large extent. Matter of time before best world gets hit I reckon.

YMMV

Sent from my MotoG3 using Tapatalk

Strange line of thought ..IMHO. Best world just got DS licence, company has yet the reap the fruits of this valuable licence. Already, you are talking about slowdown. Best world is now only starting out in Hangzhou, more cities can be gradually added once best world can execute its plan well. I believe the management  is prudent enough to recognise the associated risks/rewards. The best is yet to be....
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(03-07-2016, 10:30 AM)JanQuin Wrote: Boon
(01-07-2016, 10:24 AM)MOV Wrote: http://infopub.sgx.com/Apps?A=COW_CorpAn...4b312c0f79

The Board of Directors (the “Board”) of Best World International Limited (the “Company”, together with its subsidiaries, collectively the “Group”) wishes to announce that Best World (Zhejiang) Pharmaceutical Co., Ltd. (全美世界(浙江)药业有限公司), (“BWZ”), wholly-owned by the Company’s wholly-owned subsidiary, Best World Lifestyle Pte. Ltd., has on 30 June 2016 been granted its direct selling licence (直销经营许可证) (the “PRC Direct Selling Licence”) by the 中华人民共和国商务部 (Ministry of Commerce, the People’s Republic of China (“MOFCOM”)). Under the PRC Direct Selling Licence, BWZ is permitted to conduct direct selling in such areas in the People’s Republic of China (“PRC”) as shall be announced in due course on MOFCOM’s website on the administration of direct selling industry (商务部直销行业管理信息网站) (http://zxgl.mofcom.gov.cn/) (“MOFCOM’s Website”), for such categories of products as shall be announced in due course on MOFCOM’s Website. Pursuant to the grant of the PRC Direct Selling Licence, BWZ is not permitted to commence direct selling until BWZ has set up the requisite service centres in Hangzhou city within six (6) months of 7 June 2016, such service centres to be subject to the inspection and report of the Department of Commerce of Zhejiang Province, PRC. The grant of the PRC Direct Selling Licence is not expected to have any material effect on the consolidated net tangible assets and earnings per share of the Company for the financial year ending 31 December 2016. The Company shall make further announcements on the PRC Direct Selling Licence as and when there are any material developments. 

Cheers buddies!


The granting of the first DS license from the central government (the first step) has always been the hardest.
 
Therefore, this should be considered a MASSIVE milestone for BWI - for being granted a DS license for its China subsidiary, Best World (Zhejiang) Pharmaceutical Co., Ltd. (全美世界(浙江)药业有限公司), (“BWZ”) – regardless of limitation in its INITIAL “scope”.
 
So what are “such areas” andsuch categories of products” being granted under the FIRST DS license for BWZ?
 
Area:
Hangzhou City
 
Categories of products:
6 health supplements manufactured by BWZ (Aurigen line of products – and not BWL line of products)
 
http://www.chndsnews.com/guancha/2016/0629/66003.html
 
To conduct DS in other areas beyond Hangzhou city, BWZ would need to apply and obtain the DS permit for each provincial branch office in which it wishes to operate – this should be an easier process after the granting of the first DS license. (note: Nu Skin China first started in Shanghai City).
 
To my understanding through further research (and I could be wrong on this), to increase the range of products that BWZ could market under its DS model in China, it would have to apply and obtain the necessary prior approval from the local authority – a much simpler process after the granting of the first DS license. However, these should be products manufactured by BWZ itself, or products manufactured by its parent company (i.e. BWI or BWL). OEM products do not qualify.
 
As most of BWL products are OEM - hence the need for the Tuas factory – to qualify products manufactured by the Parent Company.
 
http://www.mofcom.gov.cn/article/swfg/sw...6174.shtml

http://www.js315ccn.com/html/direct/deta...3448.shtml
 
In another words, the granting of the first DS license has not quite put BWZ into a position where it could sell BWL line of products in China under the DS model – nevertheless, it was a giant step closer - there are still works to be done to get there.
 
When could this happen?
 
The grant of the PRC Direct Selling Licence is not expected to have any material effect on the consolidated net tangible assets and earnings per share of the Company for the financial year ending 31 December 2016.”
 
"Not within this year" - according to the management.
 
Likely to be next year – 2017 – I reckon – by then the Tuas factory should be up and running.
 
Is it a near term concern ? Not at all (continue operating under the export model – could be more profitable in the near term)
 
Direct selling in China is potentially a multi-billion dollar industry and the granting of a DS license would position  BWI a step closer to participate in this strong growth in China ,driven by strong domestic consumption, for many years to come. 
____________________________________________________________________________

The management knew about the service centres. During the investment seminar that I attended, COO stated that one reason BWL started small is the requirement for service centers. If they have gone bigger, they would face logistic nightmare in setting up the service centres which needed to be  audited.

Personally, I think that short term growth will continue to be supported by Taiwan. COO mentioned that they are much hungrier and passionate than Singaporean when it comes to direct selling. Mid and long term, China growth would be interesting. I am optimistic as they already have customers for their products through the export model. Having said that, anything can happen.

不怕一万,只怕万一。

(Vested)


Hi JanQuin,
 
It would be a logistic and economic nightmare if all service centers were to be self-owned and self-operated, but this is not the case.
 
http://zxgl.mofcom.gov.cn/front/getNews/1-3411
 
According to the above mofcom link, service centers should be provided in “县级或县级以上行政区域” and there are over 2,000 such “urban districts” in the whole of China.
 
https://zh.wikipedia.org/wiki/中华人民共和国县级以上行政区列表
 
http://www.amway.com.cn/info/content/01/...an2016.htm
 
Amazingly, Amway China currently has over 2,000 service centers over China – most of which are affiliated (加盟) centers and not self-owned. 
 
I think it is pretty easy to appoint affiliated centers and pay them according to services they have rendered to customers.
 
If no services rendered => no fees
More services rendered => more fees.
 
For BWZ, “ the Group will convert these networks of spas and salons into distributors and service centres of Best World’s products.“- Presumably, on the “affiliated” basis.
 
Therefore, there is not a problem, IMO, …………..
 
I think the discussion on short-term and long-term growth is in the context of impacts from the grant of first DS license to BWZ, which has nothing to do with Taiwan – the regulatory framework for DS activities in China is vastly different to that in Taiwan and most other DS markets as well.
 
The first DS license has legs – it could grow in its geographical footprints all over China – and it could grow in its list of approved DS product range – progressively over the next 5 to 10 years, and possibly beyond – that’s where opportunities of growth lies – a “closely regulated closed DS market” - soon to be the biggest DS market in the world – for the “privileged” of not that many licensed operators who are “lucky enough” to get in…………………….. 
 
As far as BWI/BWL/BWZ is concerned, the China growth story has just begun…………………..
 
Size of 2015 China DS market pie ~ SGD 44 billion
 
Size of BWI FY2015 China Revenue ~ SGD 20 million - very insignificant indeed………………………………
__________________________________________________________________________________________ 
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.
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(03-07-2016, 12:49 PM)brattzz Wrote: "COO mentioned that they are much hungrier and passionate than Singaporean when it comes to direct selling."

is it bcos the product is excellent or the DS commission structure is attractive?!! Big Grin

The product is the same – but product efficacy could be different to different consumers………………….. 

Not too sure about is there a difference in commission structure between Taiwan and Singapore........

However, putting passion aside, a commission structure that may not appear attractive to a less hungry person, may appear “very attractive” to another hungrier person………… That could be the difference………..
_______________________________________________________________________________________________________________________
Research, research and research - Please do your own due diligence (DYODD) before you invest - Any reliance on my analysis is SOLELY at your own risk.
Reply
(03-07-2016, 01:48 PM)mslee888 Wrote:
(03-07-2016, 12:52 PM)BlueKelah Wrote: Dun forget the massive exposure to China. The risk of further slowdown is very high.

A good example is OSIM which has been affected to a large extent. Matter of time before best world gets hit I reckon.

YMMV

Sent from my MotoG3 using Tapatalk


Strange line of thought ..IMHO. Best world just got DS licence, company has yet the reap the fruits of this valuable licence. Already, you are talking about slowdown. Best world is now only starting out in Hangzhou, more cities can be gradually added once best world can execute its plan well. I believe the management  is prudent enough to recognise the associated risks/rewards. The best is yet to be....

LOL "the best is yet to be" IIRC thats the motto of anglo chinese school Big Grin

I dun find it to be strange line of thought since I invest firstly by looking at the larger economic picture and sector involved and the risks to it. China may be shifting to consumer, but even that consumer part is not growing by much, most of GDP now still coming from gov infrastruture investment and manufacturing.

And anecdotally, used to have a neighbor who used to be in this kind of "AMWAY" business for many years with a couple of factories in China and was doing well for quite a while (yes he was making millions) but few years back sold off the business as there was too much corruption involved, which was not only eating into profits but also a PITA to manage. (even in Singapore, those in the construction industry will know, the only way to get the Chinamen to work properly is to treat them to some smokes and alcohol. you will have to tell them to "yan jiu yan jiu" research the problem with you. LOL )

DS licence or not, it is a very competitive marketplace in China as well (why has Best World not made much headway, its been around so many years) They have probably decided to go ahead and do some "deals" with the officials granting the DS licences.

There is no protection of intellectual rights so any new money making products will soon be counterfeited and outcompeted (unless you are a AUS/NZ milk or food company, other than packaging cant really copy the contents much without a change in quality)

Of course this is a current "HOT STOCK" with a SEXY growth story. There are quite a few on the SGX nowadays, take your pick.

Jump on but dun forget to jump off.
Virtual currencies are worth virtually nothing.
http://thebluefund.blogspot.com
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Must see other DS companies making monies or not in China , if they do why can BWI ?
“risk comes from not knowing what you’re doing.”
I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.
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