Dear Shareholders,
On behalf of the Board of Directors, we are pleased to present
Best World International Limited’s annual report for the
fi nancial year ended 31 December 2007.
We’ve had a very busy yet fulfi lling 2007. We would like
to take this opportunity to share a full picture with you to
explain why when we look back over the year, we see several
defi ning moments that fi ll us with confi dence in being able
to take on market challenges for the future.
BEST HIGHLIGHTS FOR THE YEAR
Best World has delivered four years of consecutive
growth since listing by achieving a 32.5% increase in revenue
to S$102.2 million for FY2007 (period ending 31 December
2007). Gross profi t grew 30.0% to S$77.9 million, translating
into a gross margin of 76.2% (FY2006: 77.7%). Margins were
affected due to a one time re-packaging exercise as well
as increased freight charges for export to new regions. Net
profi t attributable to shareholders rose to S$13.5 million.
In March, our Chairman, Dr Doreen Tan, and Chief
Executive Offi cer, Dr Dora Hoan, have placed out a total
of 16.5 million shares to institutional and high net worth
investors, including our Executive Director, Mr Huang Ban
Chin. We welcome their participation in the growth of Best
World and believe that higher institutional ownership would
be positive for the Group in the long run.
The Group’s balance sheet remains strong with cash
balances standing at S$35.3 million. This enables us to declare
a total tax-exempt one-tier dividend of 3.212 cents per share
– a total dividend payout ratio of 45.4%, a substantial 51.3%
more than the promised 30% dividend payout policy we set in
FY2006. In HY2007, the directors of the Group have declared
a bonus issue of 1-for-4 to be issued to the shareholders. In
doing so, we are rewarding our shareholders who, through their
loyalty, have provided the Group the resources and support
it needs to carry out our long-term strategy.
BEST IMPLEMENTATION OF STRATEGIES
Our conviction in our 3Ps strategy – Products, People and Plan – has once again yielded results and will continue
to drive our future growth. In particular, facilitating the best
entrepreneur platform for our distributors and developing
the best products for our customers has been an increasingly
key direction for the Group and will continue going into
2008. Identifying winning products that will enhance the
well-being of our customers is a sign of commitment we
have towards them and our shareholders.
With the People Developer Certification awarded by SPRING
Singapore in recognition of our business excellence, it further
acknowledges our fi rm commitment towards a more
professional career development for our staff and distributors.
While China was defi nitely one of our key goals in 2007,
we have not stood still in other markets. In the past year,
we have launched 21 new LCs in Indonesia, Malaysia, Taiwan
and Vietnam. These promising markets have exhibited
tremendous growth and we expect that the launch of
these LCs would sow the seeds for further expansion.
We continue to leverage our Asian focus by expanding
our footprint into new networks in Korea, Philippines,
Myanmar and Australia. Overall, our membership base
grew 48.9% to 148,428 in FY2007.
BEST PRODUCT LAUNCHES
We work hard to ensure that our products present
effective results to our customers. In 2007, we have also
launched a series of exciting new products in line with
our regional growth.
Early this year, we unveiled UberAir Ride. The latest
product in our Lifestyle Harmony range, this UberAir Ride is
especially designed for the mobile lifestyle. We are pleased to
bring this technology to your everyday driving experience. With
its ultra compact design and built-in aromatherapy function,
UberAir Ride completes our all new line-up of the ionizer range.
This is a natural line extension following the success of the
best-selling UberAir Space launched in December 2005.
In 2007, we are also pleased to introduce a device that
enhances skincare penetration, the DR’s Secret TOUCH
into our Outer Harmony range. Our skincare range together
with this latest device will further enhance product efficacy. The introduction of electronic devices has also enable us to
speed up product launches in our overseas markets as they
usually do not require any licence registration.
We also turned the spotlight from facial skincare to scalp
care, with the introduction of the Scalp Care Serum, under
a new brand name PentaLab in the Outer Harmony range.
The newly reformulated DR’s Secret and DRs Seager
Skinlight and Renewal Complex were also launched in 2007.
BEST MOVE OF THE YEAR
Entering the China market had been our goal before
we were listed. China is a market that possesses amazing
potential in terms of market size and the entrepreneurial
spirit of the people. However, we were also fully aware of
the risks and challenges that we could face from such an
endeavour. Bearing that in mind, we proceeded to fi rst
acquire 16 health food licenses under the “Vigor” Acquisition
in 2005. Our approach was to ensure that no efforts were
spared in making sure that our business in China would be
done correctly from day one.
On 30 May 2007, we set up our China subsidiary – Best
World (Hunan) Health Sciences Company Ltd (BWL Hunan).
A team of management with vast experience in various
operational skills required by our business was assembled
to lay the solid foundation of our business in China. With
training session commencing, the new Changsha Regional
Centre (RC) was fully operational by early-August. We
currently have fi ve distribution outlets within China.
The most signifi cant milestone for us was the proposed
acquisition in Nanjing, Republic of China. This was a signifi cant
step in our history, enabling us to participate in this multibillion
dollar direct selling industry and allowing the Group
to be on track for sustainable growth and success.
The Best World-Joymain collaboration was fi nalised
with the signing of a framework agreement to acquire 51%
of Joymain Nanjing in December 2007. In connection with
this plan, the Group is presently conducting due diligence
and other preparation work. Upon completion, this acquisition will signify Best World’s official entry into China
as a licensed Direct Selling company and we could not have
asked for a better fi nishing touch to wrap up a satisfying year.
BEST COMPLIMENTS
In the area of Business Excellence in 2007, we continue
to drive accountability and transparency by pursuing high
standards of corporate governance which are critical in
maintaining the investor’s trust and confidence in Best World.
Our 2006 Annual Report was awarded Best Annual Report
Silver award for companies under a Sesdaq companies during
the prestigious Singapore Corporate Award, an award that
recognises excellent fi nancial reporting presentation and a
wider scope of disclosures beyond the minimum regulatory
requirements that are in tandem with the needs of investors
and other stakeholders such as employees, creditors and the
general public.
We were awarded the People Developer Certifi cation
by SPRING Singapore. This certifi cation acknowledges our
commitment towards a holistic approach in managing our
employees and facilitating their professional developments
through our human resource management systems. Having
a good system in place would be essential in assisting our
distributors as we continue to expand into new regions.
Branding is of great signifi cance for a company’s
commercial success, because branding provides good
ideas with a form and is indispensable for differentiation in
the global market. Our 2005 Happy World Annual Report
continues to expand its international recognition into Hong
Kong with a Bronze award for Best Designed Annual Report
at the Hong Kong Designer Association Award 2007. It has
also presented us with our fi rst win in the United States of
America by receiving the Little Black Book AR 100 Award.
These recognitions will serve as a positive force to improve
perceptions of creativity within the Group for the years to come.
In the area of business performance, we were selected
as one of the Fastest Growing 50 Companies in Singapore
in June. This annual ranking was compiled and organised by DP Information Group and supported by Ernst & Young, IE
Singapore, SPRING Singapore and The Business Times.
More importantly, in September we were awarded the
Forbes 200 ‘Best Under a Billion’ companies for Asia-Pacific
ranking, which selected companies based on consistent
growth in both sales and profi ts over three years.
Best World will continue to develop and strengthen the
capability of its people, business systems and processes to
deliver a truly excellent performance that will enable us to
have a competitive edge in our industry.
BEST OUTLOOK
2007 is concurrently both a year of investment and
growth, with performances in new markets exceeding
our expectations.
Our venture into China remains our main focus in 2008.
Although it will be a time of tough challenges ahead, we are
also confident that our China team will adopt the best strategy
to put us in good stead for the years to come. As a result
of the acceleration in our plans, we expect China to begin
contributing revenue in 2008.
With the strong support of SPRING Singapore, we have
undertaken a new initiative where we can further improve
existing LC owners with better training guidelines, information
technology solutions and business management needs.
Potential LC owners will be able to obtain more information
on our newly developed LC enhancement programme. There
will be enhanced support from the RCs via training and we
believe that this will be essential for them in further improving
their sales, expanding their networks and resulting in the setup
of more LCs in our markets.
In terms of new products, we have a new range of
products in the pipeline for 2008. While we continue to
strengthen our framework in various markets, we will also
offer our customers well-developed products to add to our
existing portfolio.
For the moment, it is full speed ahead at Best World and
we believe that the outlook for the Group.
ACKNOWLEDGING THE BEST
We would like to thank all management and employees
for their hard work and commitment, which have culminated
in yet another year of good performance.
We know we can count on the remarkable commitment
and motivation of Best World’s team, who put all their
enthusiasm into meeting every demands and needs of our
consumers, ensuring excellence in all areas of our business
and allowing Best World’s growth to continue surging into
the future.
As always, we would also like to thank the members
of the Board for their unstinting cooperation and astute
steering of the Group.
And fi nally to our customers, business associates,
suppliers and shareholders for their continued support
during the year.
Yours faithfully,
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