Best World: (S$1.56) Stellar 2Q; setting bedrock for its prime
- Recorded its seventh consecutive quarter of solid earnings growth.
- Notably, 1H16 earnings of $13.3m (+466%) sets the stage this year to comfortably beat its all-time record earnings of $13.7m in FY07.
- Operating margin expanded to 21.5% (2Q15: 11.9%; 1Q16: 21.6%) as the direct seller benefitted from positive operating leverage.
- Declared a higher interim DPS of 2¢ (1H15: 0.5¢), and proposed a 1-for-4 bonus issue.
- China direct selling license expected to become effective before end-2016, which management expects to drive the next leg of growth for at least the next five years.
- At $1.56, the stock is trading at a FY17 P/E of 12x, 21% discount to global industry average of 15.2x.
- Assuming the industry average, fair value for Best World is at $1.98.
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