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Hot stock: Best World surges 15.5% after founders and company buy back shares

BEST World International, a maker and distributor of skincare and wellness products, saw its share price surge more than 15 per cent on Friday, a day after its two co-founders and company bought back shares in the open market.

At 02:51pm, Best World hit S$1.195 a share, up 16 Singapore cents, or 15.46 per cent. A staggering 41.54 million shares changed hands, making it the second most actively traded stock on the Singapore Exchange after Addvalue Technologies.

The latest rebound came after the stock had tumbled on Tuesday following concerns over China's crackdown on certain direct selling companies using illegal pyramid schemes. Best World has clarified that while it held a direct selling licence, it has not converted its business in China to direct selling yet.

Sentiment also improved after Best World revealed in a filing to the Singapore Exchange on early Friday that Dora Hoan, one of its founders and group chief executive officer, has bought 200,000 of the company's shares for S$239,000 the day before. The purchase boosted her direct stake in the company to 5.66 per cent, from 5.61 per cent previously. As a result, her total interest now stands at 40.73 per cent, up from 40.69 per cent previously.

Also on Thursday, co-founder and president, Doreen Tan, too bought 200,000 shares at S$237,750, boosting her direct interest in the company to 5.65 per cent, from 5.61 per cent. Including her deemed interest, her total interest in Best World is now at 40.73 per cent, up from 40.69 per cent.

Apart from the co-founders' purchases, Best World itself bought back 27,000 of its own shares on Thursday, from a low of S$1.175 each to a high of S$1.24.

Earlier this week, CIMB reiterated its "add" call on Best World when the stock was hovering around S$1.36. It pegged its target price at S$1.80 a share.

"While it has holds a direct selling licence, Best World's existing China revenues are currently based on an "export" model. Hence we believe it is unlikely to fall under the purview of this campaign. As such, we maintain our forecasts.

"In a worst case scenario, we envisage a delay in the conversion of its China business into a direct-selling model, initially targeted to happen by end-17/early-18,'' CIMB said.