edge12.16Best World aims to be among the top 20 direct-selling companies in China in 3-5 years. To achieve this, Maybank KE estimates that China would have to contribute RMB2 billion. The country contributed about RMB210 million in 9M2016.Best World International is at an inflexion point, as it has just been awarded a licence to conduct direct selling in China. This comes on the heels of strong growth in Taiwan, its No.1 market. 

The company's moves to scale up in China were featured in the Dec 19 edition of The Edge Singapore. Being a direct-seller, unlike conventional retail plays, Best World is not hampered by rental and staff costs as it expands.

In other words, it does not have retail outlets and its distributors are not employed as staff but are, instead, incentivised by commissions on actual sales.

Here, we distill key figures and quotes from the report for easy reading.

Best World traded at $1.26 yesterday for a trailing PE of 13 and a market cap of S$348 million. The 2016 PE is expected to end lower as 4Q is usually the strongest quarter for Best World.


 → The makeup of Chinese distributors: 

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You can see that the people here come from various backgrounds. On our platform, everyone is equal. They are all driven by a strong will to succeed." 


-- Best World executive director Huang Ban Chin (photo)

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"Since we obtained our direct selling licence in China, the turnout at our conferences has been great. This is the real market situation. There is a high level of brand awareness because of our preparations.

"All these people are very motivated and eager to set up workshops. You will see that the customers and workshop and service outlet owners come from different parts of China. This will help us enlarge our geographical coverage. We can tap their service outlets without having to incur a huge capital expenditure. You can see the scalability."



banchin8.16"The growth potential of a business like ours in China is immense. The buying power of Chinese consumers is growing by the day. They can afford products and they're looking for those that work and are safe. As we are a Singapore company with a brand name they trust, our products are catching on in the market.

"Our products have to be good -- we do not advertise. We have only one chance with every customer. Use it, like it."



 → Financials:  

9M2016 results

•  Revenue: S$138.9 m
(+128.8% y-o-y)


• Net profit: S$22.3 m
(+248.4% y-o-y)


• Net profit margin: 16%
 Net cash (end-Sept 2016): S$30.1 m

• Recent share price $1.26

• Target prices:
Maybank Kim Eng: $2.16
CIMB: $2.21

Share Prices

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Alliance Mineral0.345-
AusGroup0.0370.001
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Best World Int.1.340-
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Golden Energy0.3850.005
GSS Energy0.163-0.002
Heeton Holdings0.5650.005
ISOTeam0.340-
KSH Holdings0.780-
Lian Beng Group0.7100.005
Miyoshi0.074-0.001
Nordic Group0.5550.010
Oxley Holdings0.6350.015
REX International0.053-0.001
Riverstone1.0400.010
Roxy-Pacific0.540-0.005
Serial System0.165-
Sing Holdings0.440-0.010
Sino Grandness0.199-0.006
Straco Corp.0.8350.015
Sunningdale Tech1.850-0.020
Sunpower Group0.510-
The Trendlines0.147-0.001
Tiong Seng0.3850.005
Trek 2000 Int.0.280-
Uni-Asia Group1.230-
XMH Holdings0.240-
Yangzijiang Shipbldg1.510-0.010

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