ShareJunction - Member Posts

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http://txjy.syggs.mofcom.gov.cn/manager/prosecute.do?method=add&id=6652565

Can copy the link and see

Superkilat ( Date: 26-Apr-2019 20:21) Posted:

If franchise model is legal, why so many companies still fight for direct sale licenses? Direct sale license only restrict sales in the stipulated area by the license. If franchise model can any how applied to all over regions in China, must well operare franchise model. The only possible answer is franchise model is ilegal.

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Yes can anyone enlighten me if the explanation of the franchise model is correct? If it's so, then why is it illegal to use such model in China.

michaeltan ( Date: 26-Apr-2019 19:45) Posted:

I agreed with you that BW has never had the intention to do MLM at all. The Group has developed four distinct distribution channels that it believes best serves the markets where the Group&rsquo s products (&ldquo Products&rdquo ) are distributed.

These are legitimate sales models conducted by BW.

1.Franchise Model
2.Direct Selling Model
3.Export Model
4.Manufacturing/Wholesale

The Group does not directly conduct any sales transactions in China through online stores or social media, including Taobao. The Products are primarily distributed in China by Franchisees directly to consumers through BWL Lifestyle Centers in China.

The term &ldquo Franchise Model&rdquo was adopted by the Company to refer to the Group&rsquo s distribution model for premium skincare Products in China for the purpose of reporting, and should not be interpreted narrowly. The term was used in replacement of the term &ldquo China Wholesale&rdquo 6 due to its similarity to the Manufacturing/Wholesale Model used for &ldquo Aurigen&rdquo (全金 ) Products. The Franchise Model developed by the Group incorporates elements of authorised distributorship and franchise arrangements, where the Group sells the Products to the Franchisees, and the Franchisees on-sell these Products to consumers. The term &ldquo Franchise Model&rdquo was adopted as it describes the franchise elements of the arrangements, under which the Franchisees may only sell the Products (to the exclusion of other brands) and are permitted to use the Group&rsquo s trademarks in operating BWL Lifestyle Centers, as well as comply with the Group&rsquo s brand standards and operating manuals. The Group recognises revenue upon delivery or completion of the sale to the Group&rsquo s direct customers. These direct customers under the Franchise Model are the Franchisees, who are generally required to pay in cash before delivery and are subject to a no returns policy (except for defective goods). Accordingly, under the Franchise Model in China, the Group records its sales at the time the Products are sold to the Franchisees, which is when control of the inventory is passed to the Franchisees with cash payments received. This revenue recognition is in line with SFRS(I), the accounting standard of the Group.

https://skyjuiceiswater.blogspot.com/2019/02/direct-selling-in-china.html

Sen9999 ( Date: 26-Apr-2019 18:30) Posted:

I think they never had the intention at all to do the MLM. They mentioned they never use the direct selling license at all. So I believe all the centres are suppose to follow the framework and guideline strictly. I read times and again then I realized this is what BW is trying to say 😂

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😂 👍

bwavep ( Date: 26-Apr-2019 19:22) Posted:

oh really? how nice for SJ....this is actually a healthy exercise for SJ forum. we can assume the new accounts are either vested parties or market participents that feel compelled to comment.

SJ should be happy with increased chatter and new accounts. and the forum participants can glean more points of views and share together....ideally it should be a positive thing (one positive takeaway from BW saga)

Starship ( Date: 26-Apr-2019 17:42) Posted:

So many new accounts in this BW thread nowadays, with posts only in this thread.................

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I think they never had the intention at all to do the MLM. They mentioned they never use the direct selling license at all. So I believe all the centres are suppose to follow the framework and guideline strictly. I read times and again then I realized this is what BW is trying to say 😂

michaeltan ( Date: 26-Apr-2019 18:20) Posted:

If i sell the product to you legitimately franchise model based on our contracture binding.
You as franchisee doing MLM. who is at fault? They have clarified that they don' t have every control of you doing the business.
The most I will stop the contract with you.

Superkilat ( Date: 26-Apr-2019 18:07) Posted:

BWL direct customers are doing MLM. Can BWL get herself cleared with its band is used by its direct clients?

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No bro, it's not MLM, it's franchise selling, everyone in their system earns a commission depending on your level. Eg I am the boss, I hire freelance to work for me to sell my eggs. Then my freelance hire students to sell eggs door to door for them, then all earn commission from there. If such system is not approved in China, then most companies can't sell there😂 . Unless there is a clear definition what constitutes a direct selling model

Superkilat ( Date: 26-Apr-2019 18:22) Posted:

If BWL is aware direct clients doing MLM, why foster it? When clients got caught, BWL lose all the franchasees

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Actually most system, traditional models are all tiered models, sales director earn comm when their manager sell, manager earn comm when their rep sells. But MLM usually main focus is to sell their earning system. So they recruit more and more into their system then hardsell the new potential members. I think this is also why in the BR report there is no marketing material at the centres, no hardselling of walk in customers, no selling to non members. It's all to comply to franchise model and not the MLM model. So they don't get themselves into trouble?

Superkilat ( Date: 26-Apr-2019 18:07) Posted:

BWL direct customers are doing MLM. Can BWL get herself cleared with its band is used by its direct clients?

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Anyone here to explain franchise model again?

In another words BW is not doing MLM in China, not direct selling(so no need for the license that is obtained in 2016 in Changsha, which they clarify)
I suppose franchise model is the principal pays the fellow sales rep commission upon sales? Then the sales rep become manager, he will earn from the sales rep below him. Then manager become assistant director, he earns from manager. This is the traditional sales model isn't it?

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Anyway I read the clarification the other time again, BW stated clearly they are not using direct selling license to sell in China. They are using franchise model.

From the clarification,
In April 2018, the Group was notified by the Ministry of Commerce of the People?s Republic of China (?MOFCOM?) that the Group was permitted to operate under the Franchise Model (see http://txjy.syggs.mofcom.gov.cn/manager/prosecute.do?method=add&id=6652565) 1 . BWL China then commenced the importation of the Products into China for sale to the Franchisees

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It was specific to FY18 because the BT article was focusing on the year 2018. I suppose it is because it is the latest result. Seriously why need to check previous account if year 2018 is found to have no problem(which is the case now). I think BT was spare the court case as independent review is not out. This time BR, high chance of defamation case because of the serious allegation(we need to wait for BW clarification to see if they are going to sue them)

WL123456 ( Date: 26-Apr-2019 17:24) Posted:

An auditor was ask to investigate into the company only for their FY18 accounts .... but not the previous FY accounts and ..zzzzzz did you not read the report ? Basically the claim on BW is that they inflate and cool their account figures and there?s no way those figure can be verified . Go read business times/Bloomberg report and Bonita research short report again. So far , best world have not sue business times yet for the allegation . Their principal legal counsel has also not announce any action taken on BR. If the allegation is not true , what I will do is to ask my Legal counsel to announce a press statement and say I will reserve my company right to take legal action against BR and business times but so far nothing is done . Why ? You go think about it .

Sen9999 ( Date: 26-Apr-2019 16:49) Posted:

Oh, yes they stated in their disclaimer, but judging from so many mistakes in the report, I guess they are not really prepared. 😂
Did I miss any part where they resisted previous accounts before 2018

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Yah I would suppose it will take much longer to get the review done if include scope of 2 years. Then before the report is out.. another shortist report will come out again.. maybe to focus on 2014-2015. It's like a never ending saga. Crux of it is.. is 2018 independent review enough to prove all the various report wrong?

curious_moo ( Date: 26-Apr-2019 17:19) Posted:

i believe if BWL extend the scope of the audit to include 2016 to 2018, perhaps that will strongly boost consumers confidence?
maybe share will rebound and kill all shortists..

lets wait for the story to unfold..
last time they halted for 5 days to rebut BT article.. now duno how long it will take to rebut this one..

Sen9999 ( Date: 26-Apr-2019 16:49) Posted:

Oh, yes they stated in their disclaimer, but judging from so many mistakes in the report, I guess they are not really prepared. 😂
Did I miss any part where they resisted previous accounts before 2018

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Oh, yes they stated in their disclaimer, but judging from so many mistakes in the report, I guess they are not really prepared. 😂
Did I miss any part where they resisted previous accounts before 2018?

WL123456 ( Date: 26-Apr-2019 16:35) Posted:

Yes , bestworld can take BR to court in the US and sue them for defamation. But BR also stated they have proof to fight any legal challenge in court . First , Best world must open up their previous accounts before 2018 for investigation which best world have so far resisted as they only want 2018 to be done .

Sen9999 ( Date: 26-Apr-2019 16:21) Posted:

Any law tained personnel here, can share if the company is able to sue them for defamation since they are a US based company? Not taking side, just want to know if it's a possibilit

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Any law tained personnel here, can share if the company is able to sue them for defamation since they are a US based company? Not taking side, just want to know if it's a possibility

bwavep ( Date: 26-Apr-2019 16:04) Posted:

yes sen, it is relatively more subdued compared to some of their previous HK ones

Sen9999 ( Date: 26-Apr-2019 13:03) Posted:

Yes. Does anyone also feel that BR report on BWL is much more subdued, compared to Hengan , Hosa, Chong Sing and the most recent Hexindai?
They mentioned those stocks are useless, look at the share prices of Hengan and Hexindai now(both the lastest before BWL). I believe they will probably exit once the halt is lifted as they have already made a handsome profit with the damage done.

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Yes, where's the logic? 😂 SGX need to be more condusive for companies to list here

1035834 ( Date: 26-Apr-2019 14:37) Posted:

who hold the chip who can make the decision , how you know their position , or you have spy there also ..hahaha...u see why SGX companies all quit to list here, as when anything happen, ppls will assume it sure die

softdrink ( Date: 26-Apr-2019 14:34) Posted:

Yes, but as mentioned, would they buy shares at this price or wait for a lower price?
let me remind you, this is a cornered stock. They have lots of positions at their hands now. Topping of margins would be a good problem for them now

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It won't go into suspension! Don't speculate guys!
It's not like the company is defaulting on it's obligation. It is totally illogical to suspend a stock because of an opinion! Why BR didn't mentioned about 2018 accounts? Because PWC already auditing and said that their work is significantly done and found nothing. So BR harp on 2017. Someone with the intention to cheat, why would only do accounts on 2017, and not 2018(Independent review is done only after BT report which is in 2019). So if 2017 is fake and 2018 accounts is real? Means their sales jumped exponentially within the year?

softdrink ( Date: 26-Apr-2019 13:35) Posted:

High change it will go into suspension. SGX does not call for a full review if they do not find anything fishy about it. Obviously there is something wrong with the company and that is why they called for it. Others also did write up sell report, why SGX did not query them and call for a full review? I cannot recall of any company who had been called for a full review before.

It does not matter how good the story is going to be. The fundamentals and stories are no longer in the picture now. Once into suspension, imagine the margin calls this share is going to have. It might open at 1/2 price or lower. Anything more than $1.00 is a bonus for those who had long the share.

michaeltan ( Date: 26-Apr-2019 13:14) Posted:

l think trading for BW shares will be likely to be suspended until the review reports is out before 30/6/2019.

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Yes. Does anyone also feel that BR report on BWL is much more subdued, compared to Hengan , Hosa, Chong Sing and the most recent Hexindai?
They mentioned those stocks are useless, look at the share prices of Hengan and Hexindai now(both the lastest before BWL). I believe they will probably exit once the halt is lifted as they have already made a handsome profit with the damage done.

bayduck ( Date: 26-Apr-2019 12:14) Posted:

Yes, everyone is in for personal gains, only that some are more honorable than others.

It' s fine to share information, the problem is most forumers exhibit gross confirmation bias, only sharing information that furthers their own views. This applies to both the bulls and bears in BW. The bulls disparage Bonitas, selectively citing its lack of success in Hengan, without acknowledging Bonitas' s successful shorts in Hosa and Chong Sing (down more than 80% each). The bears refuse to entertain the notion that while a MLM could be morally dubious, it could still be a legitimate cash generative business (look at Ackman' s defeat in shorting Herbalife).

A good investor understands that behind every trade, there' s a buyer and seller, and both thinks that he/she is making the right decision in buying/selling. No investment thesis is 100% right or 100% wrong, it' s all about assessing the odds by taking into account both bullish and bearish views. That should also be the spirit of sharing information - sharing views that are balanced and constructive, not one-sided and extreme.

Sen9999 ( Date: 26-Apr-2019 10:55) Posted:

Yes I agree, all are in for personal gains.
So I suppose what we are all doing is trying to share as much as what we know, then everyone will decide to gain from short or gain from long.

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Yes I agree, all are in for personal gains.
So I suppose what we are all doing is trying to share as much as what we know, then everyone will decide to gain from short or gain from long.

bwavep ( Date: 26-Apr-2019 10:42) Posted:

i take it you' ve never been invited to buy a stake in businesses before nor did worke for an audit firm. and yes, its a version of CSI their business.

incidentally, if i understand your usage of the acroynm ' CSI' , it would mean ' criminal scene investigation' - which implies a crime has been perpetrated. so you are probably right on one count - mgt is likely lawyering up now

and of course the short seller report was made for personal gain. it already clearly said so!

are the capital markets you are invested in functioning for anything less than ' personal gains' in varying degrees?

Sen9999 ( Date: 26-Apr-2019 10:31) Posted:

As in how u want to evaluate them? CSI their background? 😂 , So far I see they have got their legal team ready(one of the biggest in china) , their audit team ready.
After reading what was printed , strike fear initially, like most of u guys, but after carefully reading it, then realise these reports could be written for their personal gain. Didn't BR made gains in Hengan case as well? After that it all went back well. So who is responsible in that case? They push down the price.. then buy up again?

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U missed out on the word "very".
And so they paid themselves and did they pay their shareholders as well?
Yes when you talk to top level of the pyramid, they will tell you about the money , but when you see their payout structure, approximately ~12-13% for first tiered sales rep, ~1-2% for second tiered sales rep, you know it's not the most lucrative MLM that you want to be in. Yet pple are buying and using and doing because it's effective. I mean of you are unbiased, you can always get your family members to go and make contact and buy 1 set to try. No hardselling, no close door tactics which many MLM companies use.

bwavep ( Date: 26-Apr-2019 10:33) Posted:

the management paid themselves > $xxx mils and you reckon the company is not money minded??

all listed companies better be money- minded to some degree....otherwise investors might as well donate to charity instead of management pockets!

bwavep ( Date: 26-Apr-2019 10:25) Posted:

try doing due diligence on a MLM business and sitting down with the mgt and top tier sales reps for off-the-record conversations....see what new impressions you walk away with

If it' s a company that is very money minded, they would have been coming out with new products every month to churn users to buy. But that' s not the case for BWL. Their focus is really helping users to look great without makeup.

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As in how u want to evaluate them? CSI their background? 😂 , So far I see they have got their legal team ready(one of the biggest in china) , their audit team ready.
After reading what was printed , strike fear initially, like most of u guys, but after carefully reading it, then realise these reports could be written for their personal gain. Didn't BR made gains in Hengan case as well? After that it all went back well. So who is responsible in that case? They push down the price.. then buy up again?

bwavep ( Date: 26-Apr-2019 10:19) Posted:

sigh....if you read very carefully what i typed, i did not say the Noble financial backdrop was like BW' s.

what I was pointing out, however, was that the investor backlash towards the short sellers is very similar. and this is where the problem lies. a suspension of objectivity....

(its seems many people do not really read carefully what is written and printed. this is why you have Hyflux and BW investors clamouring for blood after the fact....)

Sen9999 ( Date: 26-Apr-2019 09:48) Posted:

In this case, it is very different from Noble. BWL firstly has no debt to speak of, how to fail when you have no debts. Be it the share price is $1, $2, $3, the company won't be force to shut down, because simply they have no debtors to chase them.
The current situation is mainly speculation that their model is not legal in china, but after such a long period, they are still selling and churning results in china. Even so, without China, it's still a company that will survive relying on their SEA market.
How to make up the cash holdings to pay dividend and stuff if no real cash is in there. They wouldn't have declare high dividend(so high that it only do themselves injustice). Rather it's a company that sounds like they are rewarding their loyal supporters, some of whom are their users, their partners.
As I mentioned, its not possible to compare apple to.orange, and each case is different. Until you understand their model, don't bring in Noble, Midas who are they going to default their obligation?
Look at hengan? Has short sellers been right in that case?

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Hefty profit because their margin is really high, low advertisement fee. The commission payout, in SG context and in MLM context is so low , why would someone wants to sell their product? It's because their product is effective and they are consistent. If it's a company that is very money minded, they would have been coming out with new products every month to churn users to buy. But that's not the case for BWL. Their focus is really helping users to look great without makeup.
How you expect them to explain how they earn so much money? If your salary is $10k, then your relative ask you how u justify the $10k salary into hundreds, how to explain?

stockpicker ( Date: 26-Apr-2019 09:27) Posted:

I don' t think BWL is clean in its business dealings in China nor I like to think Bonitas is helping to get thing even by not studying in detail and supporting its claim with concrete evidences although Bonitas might have spent efforts searching for such evidences but he should know how things work and hit the nails at the right spot.. Both BWl and Bonitas cannot convincingly explain properly why BWL has such hefty profits.. there must be a story to be uncovered and yet to be told. but who will this be? may be the Chinese Authorities?

bwavep ( Date: 26-Apr-2019 09:11) Posted:

don' t fully understand why, as similar to Noble, there is still a propensity to find fault with the short sellers rather than the management. all the Noble bulls and defenders have faded away and gone as quiet as...well, Noble.

objectivity dictates one should look equally hard at the company management and not just the short sellers. if the shortists are pitching a cock and bull case, they will pay for it in the markets itself.

as posted earlier: the early investors made a killing, the late ones got killed and are wondering why.

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In this case, it is very different from Noble. BWL firstly has no debt to speak of, how to fail when you have no debts. Be it the share price is $1, $2, $3, the company won't be force to shut down, because simply they have no debtors to chase them.
The current situation is mainly speculation that their model is not legal in china, but after such a long period, they are still selling and churning results in china. Even so, without China, it's still a company that will survive relying on their SEA market.
How to make up the cash holdings to pay dividend and stuff if no real cash is in there. They wouldn't have declare high dividend(so high that it only do themselves injustice). Rather it's a company that sounds like they are rewarding their loyal supporters, some of whom are their users, their partners.
As I mentioned, its not possible to compare apple to.orange, and each case is different. Until you understand their model, don't bring in Noble, Midas who are they going to default their obligation?
Look at hengan? Has short sellers been right in that case?

bwavep ( Date: 26-Apr-2019 09:11) Posted:

don' t fully understand why, as similar to Noble, there is still a propensity to find fault with the short sellers rather than the management. all the Noble bulls and defenders have faded away and gone as quiet as...well, Noble.

objectivity dictates one should look equally hard at the company management and not just the short sellers. if the shortists are pitching a cock and bull case, they will pay for it in the markets itself.

as posted earlier: the early investors made a killing, the late ones got killed and are wondering why.

stockpicker ( Date: 26-Apr-2019 08:43) Posted:

Think this ganster looking man will be in hot soup if he has a lot of short sellings..

https://skyjuiceiswater.blogspot.com/2019/02/direct-selling-in-china.html