The key takeaway from the table below is that, since 2010, 2H profits for Best World International have always been much higher than 1H profits. 

With no exception.

The question is: Will it continue to be so this year? 

Profit*
S$('000)

2010

2011

2012

2013

2014

2015

2016

2017

1H

267

(1,584)

(274)

584

879

2,355

13,332

21,688

2H

2,183

1,831

2,074

845

3,175

7,749

21,073

 

Full Year

2,450

247

1,800

1,429

4,054

10,104

34,569

 

*Attributable to owners of the parent company

 

The thing about this year is that 1H profits were massive -- a 63% surge y-o-y.

Investors can, understandably, have reservations about 2H continuing the past trend of jumping higher than 1H.

The same reservation would have been felt by investors in 2015 after the 1H profit surged 168% y-o-y.

In fact, it would have been keenly felt in 2014 too. (1H profit was up 51% y-o-y).

But in both years, the 2H proved to be a roaring success.

CIMB

Maybank

DBS V

Forecast 2017 net profit

$44m

$44m

$41m

Target stock price

$1.80

$1.88

$1.45

Will it be different this time because the base has become so much higher?

Are the three research houses which cover Best World playing it safe in their forecasts?

The latest CIMB and Maybank Kim Eng reports both forecast full-year profit of $44 million, implying that 2H will be about equal to 1H.

DBS Vickers forecasts $41 million -- ie, it expects 2H to be lower than 1H.

If Best World does indeed deliver 2H2017 earnings that are much higher than 1H, there is upside for analysts to raise their target prices.

banchin8.16Huang Ban Chin, Chief Operating Officer of Best World. NextInsight file photoBest World's chief operating officer, Huang Ban Chin, didn't overstate things when he said in an interview with Business Times last week: “The company is on track to hit analyst targets of S$41 million to S$44 million of net profit for 2017. This translates to a 20-30 per cent improvement from 2016.”

After being queried by SGX, Best World said: "....the above statement should be interpreted that since we have achieved profit attributable to owners of the parent company of S$21.7 million for 1H2017 and based on our past achievements, where second half of the year is stronger than the first half of the year, the company is on track to meet analyst targets."

What drove profit growth in 1H2017 was demand for Best World’s DR’s Secret skincare range of products in China. 

This will continue to be the thrust in 2H2017, as Best World widens its outreach to Chinese consumers.

For more insights, read the analysts' reports by clicking on links in the article.


Comments  

0 #3 YSH 2017-10-16 16:32
Do you analyzing Rowsley potential ? Peter Lim any follow through?
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0 #2 YSH 2017-10-16 16:29
When Best World will come out result estimate date ? From graph is it good for squeezing now ?
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0 #1 lotustpsll 2017-09-12 17:00
Seasonality influence where 2H is much stronger is clearly shown in the stats. IMO I still think the 2H for FY17 would still be stronger but with a lesser variance as compared to past years and this in part is due to weaker performance in Taiwan.

Growth for China is likely sustainable and this will be the key catalyst to support the share price.
Quote

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