Potential distributors in China turn out to hear the Best World sales model. Photo: Company Everyone knows that China presents vast potential to Best World International, which secured a direct-selling licence there in mid-2016 and will gradually switch over (from the export model) to direct selling this year.
But how vast?
Best World has set a target, which was captured in a report last Friday (24 March) by Maybank Kim Eng on the "Invest Asean 2017" conference it hosted for 12 listcos, including Best World.
Maybank said Best World aims to be among the top 15 direct-selling companies in China within five years.
Based on recent industry data, to be among the top 15, Best World has to achieve at least about RMB2.6 billion annual revenue.
That sure is a lot of skincare products (mainly)!
The RMB2.6 billion target translates into an almost 4X jump from its 2016 China revenue of RMB0.7 billion.
(This latter figure was cited in the Maybank report as a hypothetical Best World direct-selling revenue for 2016 in order to make an apple-to-apple comparison.
For 2016, Best World reported S$54 million in export revenue to its China agent).
A 4X jump in 5 years translates into a 30% compounded annual growth rate (CAGR).
|
Sales |
2016 |
Target |
Implied growth rate |
|
China |
RMB0.7 billion |
Top 15 in China within 5 years (implies > RMB2.6 billion) |
> 30% CAGR |
|
Taiwan |
S$123 million |
Top 5 in Taiwan (implies > TW4.6 billion in 2017) |
> 60% in 2017 |
In Taiwan, Best World was among the top 10 direct-selling companies in 2016.
Maybank said Best World aims to be among the top 5 this year, which implies a growth rate of about 60%.
This is an impressive rate, coming on top of an eye-popping 123% growth in 2016, which was preceded by 141% and 77% growth rates in 2015 and 2014, respectively.
Following Maybank's report, Best World's management clarified that it aims to improve on its Taiwan ranking "by several notches" this year.
The stock price ($2.48) of Best World has done exceptionally well with a year-to-date return of 85% and a 1-year return of 710%.
There was a strong tailwind for the stock after Best World reported that its FY16 net profit soared to a new record high of S$34.6m (+242% y-o-y).
Here's a peek into Best World's office in Taipei -->
