SINGAPORE (Aug 24): Maybank Kim Eng has initiated coverage on Best World International with a “buy” recommendation and a target price of $2.63.

“With Best’s entrenched position in ASEAN and growing presence in China and Taiwan, it is well-positioned to scale up in its fast-growing key markets,” says Maybank analyst John Cheong in a Wednesday report.

The multi-channel distributor of skincare and wellness products saw earnings in the first half of 2016 surge to $13.3 million, close to a six-fold increase from the $2.4 million posted in 1H15.

Revenue for the six months ended June more than doubled to $86.8 million.

Cheong says the direct seller is “making a breakthrough”.

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“Growth prospects are attractive as Best World scales up in the fastest growing markets and we expect FY16E earnings to reach a record high with 180% y-o-y growth,” Cheong adds.

“Strong growth in Best’s largest market, Taiwan, should continue as it reaches inflection point, after years of nurturing,” he says. In addition, the recent approval of Best’s license to operate in China is expected to support rapid expansion.

(See Best World banks on China and stem cell venture for future growth; plans bonus)

Shares in Best World on Monday rose as much as 5.3% to $1.79, triggering a query by Singapore Exchange (SGX).

In response to the query, Best World on Tuesday said the surge of its share price over the last two trading sessions might have been related to approval of a proposed bonus issue.

It had received in-principle approval from the SGX on Sunday for its bonus issue plans.

(See Bonus issue plans could have caused share price surge: Best World)

 As at 11.29am, Best World International is continuing its strong run, with share prices trading 6.9% higher at $1.87.