Re:Best World reported sharp profit increase in Q2 Posted at 2008/08/10 05:01
Karma: 3
posted in Wallstraits.com:
aoaoaoao: I think the writing is on the wall. Just read the management's comment on the 2nd half challenges. Besides, operating in China is an uphill battle trying to secure Govt's approval. If successful, Best World has to guard against infringement issue in China. As I see, Best World's product could easily invite fake to be sold parallel in the market place especially multi-level, tracking becomes even more difficult.
For China's strategy to work effectively, at least 3 years. Maybe best for Best World to just pull out to minimise high investment & administrative expenses.
dydx: No one should say building a business is easy, especially in PRC.
But can Best World make it big in PRC eventually? More than a fair chance, I think, if given enough time. Why the optimism in me, you may ask? My simple answer - Best World had tried cracking PRC before its IPO but failed, so the present management has learned from a bitter lesson before and should understand the risks and difficulties involved well enough. If Amway and Nu Skin can do it in PRC, I think Best World under the present management has more than a fair chance to succeed in PRC as well.
Is PRC worth the risks and effort? The answer has to be "Yes".
JTKY: agree with dydx that with the current management, Bestworld's chances of success in China will be fairly high.
Besides the management, the products marketed must be good, and appeal to the targeted consumers.
I'm vested in Bestworld. In fact i'm using their products too, and i have to admit their products are good.
Re:Best World reported sharp profit increase in Q2 Posted at 2008/08/10 21:27
Karma: 3
CIMB-GK report not as optimistic:
Best World's 2Q08 results were in line with our
expectations and consensus, accounting for
35% of our full-year
forecast. 2Q08 net profit grew 21.1% yoy to S$5.5m
on revenue growth of 6.8%
to S$29.2m. 1H08 revenue
from Malaysia and
Singapore fell 18% and 8%
yoy to S$13.3m and S$8.8m,
respectively, due to
easing consumer sentiment
as a result of high
inflation. While Best World is likely to remain
reasonably profitable over
FY08-11, we are ceasing
coverage of the stock due
to a lack of institutional
interest. Our previous rating was Neutral with a
target price of S$0.84,
based on 9.3x CY09
earnings. Our forecasts have not been adjusted for
2Q08 results.
Re:Best World reported sharp profit increase in Q2 Posted at 2008/08/10 23:52
Karma: 3
from Wallstraits.com, a posting by dydx:
Best World operates as a mini-MNC now.
Firstly, Best World as a regional business with Operating HQ in Singapore should be able to defray some qualified expenses (e.g. expenses incurred in relation to developing overseas markets, etc.) from Singapore taxes under some financial incentive schemes sponsored by EDB or IE Singapore. Secondly, by using appropriate transfer pricing arrangements between HQ and overseas subsidiaries/associates, it is possible to reduce/minimize income tax expenses at locations with high tax rates and therefore also on a group basis.
The fact is -
- In FY06, Best World paid income taxes amounting to 19.9% of pretax profit on group basis for the FY.
- In FY07, during which rev. from the Indonesian market took off smartly, Best World's income tax expenses jumped to 27.1% of pretax profit on group basis for the FY.
- In 1H-FY08, Best World's income tax expenses fell back to 19.4% of pretax profit on group basis. More importantly, in 2Q-FY08, income tax expenses came to only 13.3% of pretax profit on group basis.
From the evolution of the group's tax expenses over the last 2.5 yaers, it is quite clear that Best World management has picked up some useful tax management knowledge and has actively implemented the appropriate tax minimization measures on a group basis. To me, this has to be good for Best World shareholders.
FION PHUA, Tee Up Marketing Enterprises (HP: 9760-5080)
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