The Straits Times / The Business Times News on Best World

Best World sees profit growing 30% a year

Oct 24, 2006
The Business Times

BEST World International Ltd expects to grow its profits at a compound annual rate of 30 per cent for the next three years by growing its presence in established markets and expanding into new ones, according to executive director Huang Ban Chin.

'We feel this rate of growth is achievable because there is room for growth still in our established markets.' - Best World executive director Huang Ban Chin

'We feel this rate of growth is achievable because there is room for growth still in our established markets of Malaysia and Indonesia, even as we expand into new markets,' Mr Huang told Dow Jones Newswires in a recent interview. The company released the interview report to the Singapore Exchange yesterday.

Best World, which sells health, skin care, and lifestyle products through regional direct selling networks, makes the bulk of its sales in Malaysia, Singapore, and Indonesia, but is expanding into several other Asian countries.

Malaysia is its largest market, accounting for 45.5 per cent of sales in the first half of 2006, followed by Singapore with 32.9 per cent of total sales, and Indonesia at 17.6 per cent.

Other markets including Taiwan, Hong Kong, and Thailand accounted for just 4 per cent of total sales in the first half of 2006, but that number is set to grow.

'We expect Hong Kong and Taiwan together to account for 5 per cent to 10 per cent of total sales in 2007,' Mr Huang said.

In the six months to June 30, Best World posted a 32.6 per cent increase in net profit to $5.8 million, and a 39.4 per cent increase in revenue to $35.1 million, compared with the same period last year.

Best World is currently in talks with a number of parties to form a joint-venture with a local partner in China.

Direct selling in China is complicated by regulatory hurdles such as a cap on commissions paid to distributors, but Mr Huang said Best World can 'carve out a niche' for itself in China by finding a partner with local expertise.

Since the Guangdong market is already being served by Hong Kong, Best World is looking for a partner in the central and northern regions of China.

Best World plans to expand into Japan, India and the Philippines by 2009, and is considering joint ventures and acquisitions as a means to do so, Mr Huang said.