Singapore's Best World, a health care firm focused on China, expects profit growth to take a hit this year due to higher costs from its aggressive expansion drive, a company executive told Reuters on Tuesday.
Best World International is in talks to buy a stake in a Vietnamese firm and plans to expand into a second Chinese province as it awaits a license, expected to be granted next year, to sell cosmetics and healthcare products directly through individual distributors.
China will be our top revenue generator in the two years after we get our license, the firm's Executive Director BanChin Huang told Reuters in an interview.
Huang declined to name the next province targeted, only saying it was an eastern coastal province with a larger economy than China's Hunan province, where it already operates.
The company, which reported a 40 percent rise in 2006 net profit to S$11.9 million ($8.1 million), expects profit growth to slow to 15 percent in 2007 due to higher costs from its expansion into Hunan province in February, Huang said, suggesting that full-year profit will come in at around S$13.7 million.
Revenues are expected to grow 30 percent this year, steady from the first half but lower than last year's 40 percent rise to S$77.1 million.
Best World, a direct seller of cosmetics and healthcare products, has a stock market value of $133 million. The company runs 11 country offices in Asia and has over 120,000 distributors for its products.
Huang said Best World is in talks to take a stake in a Vietnamese direct selling company to expand its network there, though he declined to name the firm.
Vietnam is a possible hub for our Indochina operations.