Stock Buy Call: Best World Int target price of 1.0 sgd by SBI E2-Capital!

SBI E2-Capital said it has initiated coverage of Best World International Ltd, which develops and distributes beauty and lifestyle products, with a 'buy' call and fair value of 1.0 sgd per share. "We like Best World's scalable business model with low capex, high cashflow generation and lucrative margins," SBI E2-Capital said in a client note. The brokerage said the company's growth will be driven by product and market expansion, and its rising membership base. "Best World has experienced solid profit growth since 2002. We expect the market to re-rate the stock on the back of its positive outlook over the next three years," it said. "Based on 14 times 2006 forward price earnings, our target price is 1.00 sgd, implying an upside of 43 pct." SBI E2-Capital expects net profit for Best World to rise to 11.7 mln sgd this year from 8.5 mln sgd in 2005. Net profit for 2007 is pegged at 15.8 mln sgd and 21.1 mln sgd in 2008. Best World was up 0.005 sgd at 0.705 on volume of 371,000 shares.