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POTENTIAL growth in China, increasing followers on its social media channels and expansion into new markets have broker Maybank Kim Eng keeping its "buy" recommendation on beauty products distributor Best World International with a S$1.88 target price.
Best World's shares were trading at S$1.24 apiece on the local bourse as at 10.26am on Dec 5, down by S$0.01 or 0.8 per cent.
The stock has so far seen a 52-week high of S$1.60 and a low of S$0.60, and the company has a current market capitalisation of some S$698.5 million, according to a research note from Maybank Kim Eng.
Best World's aim to have a 5 per cent market share in China's skincare market means the company will require sales growth of around 80 per cent for the 2018-2020 financial years.
To achieve that, the company has begun application for a direct selling licence outside of Hangzhou city, encompassing at least seven provinces by the end of 2018, with cities in Hunan province expected to be approved first.
Best World, which relies on direct selling, also said that the number of followers on its WeChat and Facebook accounts has tripled to more than 24,000 since February 2017.
The company also announced the launch of a mobile app in Taiwan to help make ordering goods easier, with the app launching in more markets in future, the company said.
The company has also halted promotions in Taiwan - its second-largest market - to prevent discounted sales by distributors. Maybank Kim Eng predicts a gradual recovery from 2018 due to the low base, and after weeding out discounted goods.
Best World also said that it is exploring growing its Indonesian sales, with an eye on future expansion into new markets such as Japan and India.