Oh my God it's Malcolm in the middle!

Earlier this month Nu Skin Enterprises issued an 8-K announcing preliminary fourth quarter results. Here is a direct excerpt from the first portion of the filing:

"Given the current review of our business in China and our desire to provide the most informed guidance possible, we are rescheduling our full earnings release and investor call to later in the month. We look forward to discussing our 2013 results and our business plan and guidance for 2014 at that time"

This morning Nu Skin issued another statement on its website:

PROVO, Utah, Feb. 27, 2014 /PRNewswire/ -- Nu Skin Enterprises, Inc. (NYSE: NUS) will release fourth-quarter and full-year 2013 results prior to the market opening on Monday, March 3. The Nu Skin management team will host a conference call with the investment community later that same day beginning at 11 a.m. (EST). During the call, participants will hear management discuss past results and upcoming business initiatives. 

If earlier this month Nu Skin was waiting to release full earnings until they could get a better handle on forward guidance, and they have now scheduled full earnings release for this Monday, doesn't this indicate that the company has at least partially resolved matters with the State Administration of Industry and Commerce in China and has a SAIC-vetted map for future operations? 

Xinhua reported that the SAIC will review Nu Skin's operations in China during the months of April through June to check for any wrongdoing. If the SAIC is going to review Nu Skin's operations a full three months after Nu Skin launched their own internal review, it leads me to believe that 

1. Nu Skin is very proactively providing the data gathered in their own internal review to the SAIC
2. If Nu Skin was not compliant with prior SAIC guidelines, they are likely negotiating a fine with the SAIC
3. Nu Skin will be fully compliant with the SAIC review that will start in April (they'd better be with three months to get ready).
4. The SAIC will not issue their more detailed direct selling rules prior to that period (otherwise it'd be a Catch 22 for Nu Skin)
5. Nu Skin will successfully operate within the newly issued SAIC guidelines for direct sellers.

Respectably, when I contacted the company they informed me that they hoped to provide some additional detail on Monday's call, but that prior to the call, they could not provide any color. If the company provides any favorable information with respect to regulatory actions in China, and provides 2014 guidance of at least $6.80/share I think we're looking at least a $100 stock.

One of the more interesting theories I've heard is that Nu Skin got the SAIC smackdown because they didn't fully appreciate the cultural priorities that reside within the Chinese government; a well organized, empowered group of millions of sales representatives could represent a subtle threat to the Chinese authorities and this reset in the relationship was likely a reminder to Nu Skin that culture matters. Considering the burden that Nu Skin's cultural travails have placed on other direct sales companies operating in China(meritorious or otherwise), any favorable regulatory outcome projected by Nu Skin could also significantly lift industry peers such as Avon and Herbalife.