Why I buy Best World?

I have written a longer write ups on Best World last July in the following two posts:
Best World International Limited

MLM and Best World...my experience with them

This post will summarise my reason for buying it and my expectation. I will also share its latest results.

Why buy?
The following are the key reasons why I purchased Best World.

• The group gains traction in both Taiwan and China markets and has grown tremendously from 2014.
• The group obtained its Direct Selling license in China which opens up a giant market for them in the next few years.
• The group is a cash business. If they can grow their top-line, they would generate cash. And with a dividend policy of 30%, it means more cash-back.

What I expect?

I expect the company to execute their strategies to grow their China market. Execute well, and it should have double digits growth for the next few years. I also think that the company might issue bonus and rights in the next few years to generate further interest in the company. Best World would become a billion company if they can sustain their growth. Longer term, I hope that they can translate their performance in Taiwan to other markets.

When will I sell?

I would be holding on to my stakes for at least the next few years as there is clarity in their growth. I will sell if there is a sudden reversal of their fortune in both Taiwan and China due to regulatory changes. Another reason that I might sell is if the valuation goes crazy like PE 50x. I probably won't sell all but will definitely takes profit. 

Recent results
Amazing 1H results. Revenue up by 154.3% and net profit increased by 466.1%. Dividend of 2 cents and propose bonus shares of 1 for 4. Taiwan continues to be the star performance with revenue up by 275.8% and China is catching up with revenue growth of 164.7% for its export market. Currently, Taiwan and China accounted for near to 90% of group's revenue. Indonesia also saw growth of 122.9% but it is very much smaller in absolute revenue. 

I am happy to see the results even though it was already expected. There is a slight concern that Taiwan accounted for 63.7% of its revenue. However, things should change by next year with conversion of China export model to direct selling.  

I will continue to hold on to my current stakes and might buy slightly more after the bonus issues.