SINGAPORE (Aug 18): Shares in Best World International, the manufacturer and distributor of skincare and wellness products, surged 15.5% to close at $1.20 on Friday after its two co-founders and the company bought back shares in the open market.

See: Right timing: Best World punters get cold feet

On Tuesday, Best World had lost more than a fifth of its value to end at $1.03 following worries over China’s crackdown on direct selling companies that use pyramid schemes.

Best World followed up with a clarification, saying that while it held a direct selling licence, it has not converted its business in China to direct selling business model yet.

See: Best World says pyramid scheme crackdown has little to no impact on China business

In a regulatory filing on early Friday, Best World reported Dora Hoan, one of its founders and group CEO, had on Thursday bought 200,000 shares for $239,000. This brings her direct stake in the company to 5.66% from 5.61%. Together with her deemed stake, Hoan's total stake now stands at 40.73%, up from 40.69% previously.

A filing was also made on behalf of Doreen Tan, co-founder and president, who also bought 200,000 shares for $237,750, boosting her direct stake in the company to 5.65% from 5.61%. Including her deemed interest, her total stake in the company now stands at 40.73%, up from 40.69%.

Best World itself bought back 27,000 of its shares, at a price range of between $1.175 and $1.24.

In a Wednesday note, CIMB reiterated its “add” call on Best World with a target price of $1.80 given the stock underwent a price retracement after Tuesday’s negative news.

See: Best World denies it’s a follower of Bernie Madoff’s methods

“This is an attractive entry point given its stellar forward earnings momentum, in our view,” says analyst Jonathan Seow.

"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,” adds Seow.

About 49 million Best World shares changed hands today, making it the third most active counter after Rowsley and Addvalue Tech.