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Showing posts from February, 2019

Best World shares fall 18.45% in heavy volume as trading resumes

Best World International shares plunged 50 Singapore cents or 18.45 per cent to finish at S$2.21 on Monday after trading resumed following a halt that lasted almost five days last week.
Heavy selling ensued with some 29.5 million shares changing hands as investors mulled over Best World's rapid expansion in China, which had underpinned its high valuations.
The direct-selling company, which also sells premium skincare products to franchisees in China, said over the weekend that it will order an independent review of its business and accounting practices, after The Business Times raised questions about the lack of clarity on how its franchisees operate in China.
Best World said it has conducted its business ethically and in compliance with applicable laws, but "is not responsible for the accounting and sales records of the franchisees, who are independent third parties".
In any case, it has decided to voluntarily hire an independent reviewer to address the issues and provide a…

Best World to hire independent party to review business and accounting practices

Best World International is hiring an independent reviewer to scrutinise its business and accounting practices, after The Business Times raised concerns last week over the challenges in tracking sales of its DR's Secret line of premium skincare products in China.
In a statement on Saturday, the company told shareholders that it has conducted its business ethically and in compliance with applicable laws, but “is not responsible for the accounting and sales records of the franchisees, who are independent third parties”.
Until last week, shares of Best World had been on a multi-year rally, driven by strong growth in China. The group derives 66 per cent of total revenue from sales of the DR’s Secret line of premium skincare products in China under its franchise model.
Revenue is booked when the franchisees in China purchase inventory from Best World. At least one analyst has pointed to challenges reconciling between upfront sales figures and underlying consumer demand in China.
Best World…

Sales of DR's Secret in China: Best World's best-kept secret?

Best World International shares have soared 171 per cent over the past 12 months, driven by strong growth in China, where the group derives 66 per cent of total revenue from sales of the DR's Secret line of premium skincare products.
However, it is challenging to figure out just how and where those sales are taking place, according to new findings by The Business Times.
Analysts who engage in fundamental analysis to evaluate the stock's intrinsic value have found key data hard to find or verify.
At least one research house has given up tracking the stock.
In August 2018, DBS Group Research analyst Carmen Tay wrote: "Given challenges in reconciling between upfront sales figures and underlying consumer demand in China, which have yet to be addressed under the new franchise model, we will suspend coverage for now."
Let's leave aside the upfront sales issue for now and back up a moment.
Best World has direct selling operations in most markets it operates. While China is th…

The incredible shrinking Singapore stock market

SINGAPORE (BLOOMBERG) - Robson Lee had a decision to make. In his more than two-decade career as a capital-markets lawyer in Singapore, he'd helped more than 30 companies list on the country's stock exchange, bringing to market everything from a grocery store chain to a pawnbroker. Business had been good, but it was starting to dry up. Lee decided he had to get out. "I saw the decline," he says. "That's why I moved."
That was in 2014, when more companies left the Singapore Exchange than joined it, with $8.4 billion in value disappearing from the public market. Lee, now 50, quit his job and became a partner in the Singapore office of the US law firm Gibson, Dunn & Crutcher LLP. While he still works on SGX listings, he spends more than three-quarters of his time helping companies throughout Asia to restructure and make asset purchases.
The exchange's fortunes have only gotten worse. For the last five years, delistings have outnumbered listings in th…

Korean shipbuilders merge; ripples reach Singapore

South Korea's giant merger between the world's two largest shipbuilders could shake up Singapore-listed yard and offshore players in more ways than one, aside from the oft-speculated but yet-to-materialise consolidation here.
For one, the leading offshore firms and shipbuilders on the Singapore Exchange could land more jobs as South Korean stalwarts Hyundai Heavy Industries (HHI) and Daewoo Shipbuilding & Marine Engineering (DSME) iron out the creases that will likely arise over the integration process.
That's good news for the three largest listed operators - Keppel Corp, Yangzijiang Shipbuilding and Sembcorp Marine (SMM) - which collectively have a market value of S$20 billion.
"We think the integration between HHI and DSME could soak up resources in the next one to two years. This could bode well for SMM and Keppel Offshore & Marine (Keppel O&M) as well as Yangzijiang, allowing them to gain market share in the O&M and shipbuilding space," said CGS…