Best World

[MOV]

Hi Boon,

1. For next five years for Taiwan market to grow PAT at 15% per year is highly possible in my opinion. Comparing Amway Taiwan with BWL shows there is still a lot of room for BWL to grow in Taiwan alone:

FY2015:
Amway: TWD11.76b, 360k members and 12 centres
BWL: TWD1.28b, 3 centres and 412k members globally (taiwan members number not available)

Therefore based on projected Taiwan growth and only China exports alone, the earnings growth in my DCF model suggest current valuations can be sustained.

2. Interestingly, if you compare Jumbo Group with Best World, both share similar equity base and profits for latest quarter (Jumbo: PAT-$5.8m, Equity-$58.5m, Best World: PAT-$5.9m, Equity-$68.8m). However, Jumbo is trading at P/NAV = 6.3, much higher valuations than BWL. It will be very interesting to study both companies and their growth trajectories especially in China and see which will grow faster and how the market responds.

3. I concur with earlier threads that the China licence effect may be causing the distributors to 'stock' up some inventory in anticipation and this could explain the large increase in the export sales. We may not know the extent but I reckon this will continue. Therefore we are likely to see continued strong export sales going forward.

Hi MOV,
 
https://127f15f3-a-62cb3a1a-s-sites.goog...edirects=0
 
Some numbers on BWL Taiwan membership (see page 5, fig 10) of the above report which also mentioned some agents stocking up on inventory in anticipate of the DS license approval.
 
BWL Taiwan (FY2014):
Revenue = TWD 530 m
Number of members = 17,758
Average sales per member = TWD 29,845 
 
Amway Taiwan (FY2015):
Revenue = TWD 11,760 m
Number of members = 360,000
Average sales per member = TWD 32,667
 
http://bestworld.listedcompany.com/newsr...tation.pdf
 
This presentation contains Taiwan top 10 DS companies with revenue for 2015.
 
It also shows that export price is a fraction of members’ price.
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Thanks Boon, great info!

Hopefully the 'east wind' come soon...