BWX Ltd is "A vertically integrated developer, manufacturer, distributor and marketer of branded beauty care products..with an emphasis on naturally formulated products" It owns the very successful and category leading Suikin brand, which has also received offshore success. BWX has since made a number of acquisitions (such as Mineral Fusion and Andalou Naturals) and established local partnerships to leverage a move into the US and UK markets.

It is a competitive market, but a fragmented one: the top 10 companies (L'Oreal, Proctor & Gamble etc) account for less than 1/2 the sector. And its focus on "natural" brands is higher value.

In essence, the company is a brand manager, as that's the only thing in this area that can provide pricing power. And they have some popular, fast growing brands. 

So there's certainly big potential here, especially when you also include the vast Chinese market opportunity -- in which they have had some real success.

Since hitting a record high at the start of 2018, shares have suffered a ~60% fall. The main reason is that the failed takeover supposedly consumed a lot of management's attention and delayed the implemntation of a range of programs (new CEO discusses here).

The business saw a drop in first half sales and is expecting FY19 to be essentially flat. For a business that was previously on a growth multiple, the market (justifiably) saw fit to re-rate it. 

There's also some concern that they can indeed deliver enough sales in the second half to meet this guidance (it calls for 70% of full year EBITDA to be delivered in the the second half)

While there is a big market opportunity, and a solid tailwind in the "natural" beauty space, I am mindful that trends can change quickly in the FMCG space, and that brands wax and wane.

There's potentially some digestion pains as the company integrates its recent significant acquisitions, and its still too early to know just how well they will manage to grow offshore operations.

UPDATE: Company significantly lowered its guidance for the year in late december. (see here).

Have lowered my valuation to reflect this. Despite being ostensibly cheap, i'm not convinced of risk - reward proposition.