THE BEST IS YET TO BE

hahaha... :)


You have such excellent promotion talent... 

count me in!...

We initiate coverage of Best World International Limited

 

(BWL), a multi-level marketing (MLM) cosmetics company,

 

with a 2 (Outperform) rating, and DCF-based six-month target

 

price of S$1.15, offering 21.7% upside potential from the current

 

share price. We forecast BWL?s earnings to increase at a CAGR

 

of around 27% over the next several years, riding directly the

 

wave of an expanding middle class in Asia.

 

? Our investment thesis revolves around BWL?s expansion into

 

new markets (eg, China and Indonesia) via its MLM sales

 

channel.

 

? In our view, BWL should appeal to both value and growth

 

investors, given our forecast of an earnings CAGR of 27% up to

 

2009, and as it trades currently at what we regard as

 

undemanding valuations (PERs of 11.5x and 8.7x and

 

EV/EBITDA multiples 7.1x and 5.5x on our FY07 and FY08

 

forecasts, respectively).

 

? The key risks include market saturation in its core

 

Singapore/Malaysia markets, and the licensing risk in China.

 

BWL trades currently at what we regard as attractive earnings valuation ratios. The

 

ratios remain low despite the share price having almost quadrupled from its IPO price

 

of S$0.25 in July 2005 thanks to its fast earnings growth. The stock?s multiples have

 

expanded from mid-single digit PERs over the past two years to low double-digits,

 

thanks to its impressive public earnings track record. Looking at EV/EBITDA, the

 

stock is trading at what we see as attractive multiples of 7.1x and 5.5x on our FY07 and

 

FY08 forecasts, respectively. The company?s scaleable business model and low cash

 

reinvestment needs mean that cash flow should remain robust, allowing the company to

 

build up an even larger cash pile, even after paying out about a third of earnings as

 dividends, in our opinion.

Initiation of coverage: top of the pyramid

?

(BWL), a multi-level marketing (MLM) cosmetics company,

with a

price of S$1.15, offering 21.7% upside potential from the current

share price. We forecast BWL?s earnings to increase at a CAGR

of around 27% over the next several years, riding directly the

wave of an expanding middle class in Asia.We initiate coverage of Best World International Limited2 (Outperform) rating, and DCF-based six-month target

?

new markets (eg, China and Indonesia) via its MLM sales

channel.Our investment thesis revolves around BWL?s expansion into

?

investors, given our forecast of an earnings CAGR of 27% up to

2009, and as it trades currently at what we regard as

undemanding valuations (PERs of 11.5x and 8.7x and

EV/EBITDA multiples 7.1x and 5.5x on our FY07 and FY08

forecasts, respectively).In our view, BWL should appeal to both value and growth

?

Singapore/Malaysia markets, and the licensing risk in China.

 

BWL trades currently at what we regard as attractive earnings valuation ratios. The

ratios remain low despite the share price having almost quadrupled from its IPO price

of S$0.25 in July 2005 thanks to its fast earnings growth. The stock?s multiples have

expanded from mid-single digit PERs over the past two years to low double-digits,

thanks to its impressive public earnings track record. Looking at EV/EBITDA, the

stock is trading at what we see as attractive multiples of 7.1x and 5.5x on our FY07 and

FY08 forecasts, respectively. The company?s scaleable business model and low cash

reinvestment needs mean that cash flow should remain robust, allowing the company to

build up an even larger cash pile, even after paying out about a third of earnings as

dividends, in our opinion.The key risks include market saturation in its core

Cashier... :)

hahaha... you are right...

When I was young, I used to love a gadget known as a "Map Measurer"... it is a small gadget with a tiny wheel on it. You use it to measure distances on a map eg. the total length of a meandering river, zigzagging roads, etc.

If we use that thing on a stock's price chart, we will readily see the whopping profits (and time saved) that can be derived just from trading all the roller coaster rides...

I am sure you agree with me, brother... hehehe...