Best World Q1 net profit up 29% to S$13.3m, led by Taiwan, China sales

MAINBOARD-LISTED skincare-product company Best World International, which remains under a bourse probe over its sales model in China, on Thursday recorded a 28.6 per cent year-on-year rise in its first-quarter net profit to S$13.3 million. 

Revenue for the quarter ended March 31 was up 39.7 per cent on the year to S$74.6 million, boosted by growth in the company's core direct selling and franchise businesses. 

The growth in revenue was chiefly generated out of Taiwan and China. Takings in Taiwan increased 29.8 per cent on the year to S$22.2 million. Best World this was mainly due to "highly effective" distributors converting leads and servicing existing members, as well as new marketing strategies.

Meanwhile, revenue from China rose 53.2 per cent on the year to S$39.7 million, which Best World attributed to its franchisees tapping social platforms such as WeChat and Red (XiaoHongShu) to boost demand for its DR's Secret product amid the novel coronavirus outbreak. 

However, Best World also said it expects volatility in its top and bottom line performance.

For one, the group's growth is largely dependent on the China market. While operations in China have been on a "slow path" to normalcy since April, "franchisees are not returning to previous levels of sales activities over concerns of a resurgence in Covid-19 cases". 

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Also, shipments from its contract manufacturers have been delayed in its markets which are under lockdowns. Its packers are also unable to work due to Singapore's circuit-breaker period. 

In addition, construction on its Tuas facility in Singapore has been temporarily halted during the circuit-breaker period aimed at breaking the chain of transmission of the coronavirus. Best World said it expects an increase in costs as a result of this delay.