It aims to focus on the vast Chinese market, leveraging social media and web marketing strategies
by RUPINDER SINGH
HEALTH-ORIENTED and wellness direct-selling company, DXN Holdings Bhd, recently made a comeback to Bursa Malaysia’s Main Market with a soft start.
The company’s shares opened slightly lower than its IPO price, indicating cautious investor sentiment. However, DXN remains optimistic about its prospects as it reported impressive financial results and unveiled plans for global expansion.
At the start of trading last Friday, DXN’s shares opened 1.4% lower than the IPO price at 69 sen.
“Our financials are mainly attributed to the strong demand for our fortified food and beverages (F&B), in particular our coffee products, by our members across the globe,” said non-independent executive chairman and founder Datuk Lim Siow Jin.
DXN reported encouraging financial results, with a profit after tax of RM289.3 million for the financial year 2023 (FY23), marking a 17.9% increase over the previous financial year.
The company’s revenue also experienced significant growth, surging 28.8% to RM1.6 billion during the same period.
“Our members have expressed interest in buying DXN shares, but the sentiment will only be reflected in one to two weeks,” Lim stated.
He explained that the majority of DXN’s strength lies within its overseas members, with over 90% of its members located outside of Malaysia. This, he said, makes it a more complex process for them to purchase shares in Malaysia.
DXN is a global player in the health-oriented and wellness consumer products industry, boasting over 14.9 million registered members and more than 3.6 million active members in over 180 countries.
Peru emerged as the company’s largest contributor, followed by Bolivia, Mexico, India and Morocco.
Based on DXN’s fact sheet, the company has identified the top 10 markets as Peru, Bolivia, Mexico, India, Morocco, Malaysia, Philippines, the Middle East, the US and Thailand.
With a solid foundation, DXN plans to expand its presence into five additional markets, including Argentina and Brazil in the Latin America region, as well as Algeria, Niger and Ghana in the North Africa region.
DXN’s ED and CEO Teoh Hang Ching, shared their expansion timeline, stating that the Latin America region is expected to be operational by the end of 2023, while the North Africa region is slated for the end of 2024.
Looking even further ahead, DXN aims to focus on the vast Chinese market, leveraging social media and web marketing strategies.
“China is mainly manufacturing spirulina in the desert area of Ningxia. China is aggressive in promoting agriculture and the cost of production is much cheaper in China compared to Malaysia,” explained Lim.
The company has already set up two production plants in China, taking advantage of incentives provided by the government and nominal land rental costs.
DXN raised RM112 million from its IPO, with RM80 million allocated for the repayment of bank borrowings and RM17.5 million for working capital requirements, especially for the purchase of primary raw materials.
The company’s market capitalisation upon listing was expected to be around RM3.5 billion.
DXN’s return to the Main Market follows its de-listing in 2011 when the company was privatised by Lim to focus on its core business of direct selling and divesting non-core operations such as tourism, land and property development.
With its vertically integrated supply chain, DXN maintains control over product quality and costs, bolstering its competitive advantage in the health-oriented and wellness consumer products industry. The company engages in in-house research, cultivation and manufacturing functions.
- This article first appeared in The Malaysian Reserve weekly print edition