$Best World(CGN.SI)

Bonitas has rebutted Best World's rebuttal (attached).

Bonitas makes sense to me. Furthermore, they put money in their mouth and declare they are shortists, publish reasons for shorting. I think its fair and they serve a useful function in the market. The amount of research and legwork they put in is beyond most investors, including institutional ones.

Dont forget, Bonitas' reputation is also at stake. They are also building a track record. If shown to be unreliable, in future nobody will give them any credibility.

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49 comments
michaelmlts

think the most discriminating is the brother in law. But like to ask hor surname hoan and huan same meh?

kc2024

Reply to @michaelmlts : maybe missi spelled wrongly.

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TheMAOZD

Took a glance at the independent directors list in Best World. I wonder what they are doing? Kiao kar shake leg?

WK888

Reply to @TheMAOZD : Paid well to do nothing... Being kept happy...

traderx

When are retail traders going to learn a lesson repeating itself recently?.Good to be informed of reports but do not trade based on report alone. That earning report can be used as toilet papers. Instead of cursing shortists, when one still stubborn do not want to learn to short only has oneself to blame and is missing out potential opportunity to make money when real collapse come. One has to be nimble to move both ways in Trump's era of cowboys market. Price action matter most.

leewe

Let them fight it out in court. We watch

lynlynnakamori

The short one never learnt their lessons!

luxcan

Reply to @lynlynnakamori : +1, now just sideline and watch how it turns out

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tansiowc88

Avoid, avoid, avoid...

Hayashi8

can u afford to tie your money for so long....what if it goes under?

ThumbTackInvestor

Hong Lim Park got business again soon.
let the festivities begin!!!
lolol

DareDevil

Reply to @ThumbTackInvestor : Set up a carnival

carsonkuah

I believe will suspend all the way to AGM liao

luxcan

Very damaging response.

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https://valiantvarriors.wixsite.com/home/n...

In the definition of the Laws, Bestworld was probably not wrong to state that the franchisee/importer was not related to BWL.

BUT, if the article's findings are true (brother in law relation etc), then effectively the PEOPLE in Bestworld and its main franchisee/importer ARE CLOSELY related. This gives rise to possibility of hanky panky transactions etc (I am not saying surely hanky panky, but "possibility" unless proven otherwise) .

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So, company requested for a trading halt after SGX made a query on the trading activities.
The company is likely to refute the Bonitas Research report.
But I note that Bonitas is just one of several research house /investors to have checked on the BWL Lifestyle centres in China and all reported that these centres were merely empty store fronts with little or no sales activities. They also checked around and concluded that brand awareness for DR's Secret skin care products were very poor, definitely not enough to be able to record the sales that BW claimed.

Tellingly, Bonitas highlighted that BW's founders have exponentially accelerated their annual take home pay by a whopping 20x in 5 years. The figures were also a huge percentage of the company's operating cash flows.

Interestingly, all this while, the 2 founders are being addressed as "Dr Hoan" and "Dr Tan"....both proudly listed they have obtained PhD degrees - from "Western Pacific University, USA" and "Canyon College, USA" - respectively.

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https://www.idahopress.com/members/online-...

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CLSA's investigative report on BestWorld yesterday revealed some very telling evidence.

The way I see it, Best World's model in China isn't exactly a typical network marketing one. In a network marketing model (such as Amway, Unicity), company products are primarily distributed directly to individuals, who in turn become a node to form their own distribution network to other individuals.

But in Best World's case, company products are distributed to distributors which act more like wholesalers holding up the stocks. It is up to the distributors how they want to sell the products. It is a pseudo franchise-network marketing model.

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Despite having fallen from $2.60 recently, I believe there is more downside in the short term. Interestingly, CLSA made a sell call but revised its target price sharply higher from $1.29 to $1.75. This is primarily due to expectation for good 2019 result.

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Another RUMOR that has been going round for some time is this:

BW had asked franchisees in China to buy their shares. Those who bought above a certain amounts would get good credit terms, "case by case" basis. So, instead of paying BW for the products in cash, the Chinese franchisees used the funds to buy BW shares. This could be one reason to explain for the meteoric rise in BW shares over the past 3 years. Demand for BW shares overwhelmed supply.

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