KUALA LUMPUR (April 24): Shares of DXN Holdings Bhd surged on Wednesday to its highest in more than a month as analysts continued to urge investors to buy the stock after the health supplement company’s fourth-quarter (4Q) results.
DXN climbed as much as 6.5% or four sen to 66 sen, its highest since Feb 13, 2024. The stock was trading at 64 sen at 10.15am after nearly 11 million shares changed hands on Bursa Malaysia. The country’s benchmark index FBM KLCI was 0.3% higher.
“DXN’s outlook remains positive as its presence and membership count continue to expand in its key growth markets,” said Maybank Investment Bank, one of four research houses covering the stock, and maintained its "buy" call.
DXN reported a 43% rise in net profit to RM79.02 million for its 4Q ended Feb 29, 2024 (4QFY2024) thanks to higher sales from Latin America and India on the back of member-driven conventions and events, launch of new products, and targeted marketing programmes.
For the full year (FY2024), DXN’s net profit increased 12.9% to RM310.99 million, which largely met analyst expectations. The company also declared a fourth interim dividend of one sen per share, bringing its total dividend declared for FY2024 to 3.6 sen per share.
For FY2025, the consensus forecast is for net profit to hit RM375.67 million, or 7.7 sen per share, on the back of RM2.12 billion in revenue, according to Bloomberg.
“Going forward, we expect earnings growth to be underpinned by the continuous growth in key markets while its recent entry into Brazil should bear fruit in the medium term,” said RHB Investment Bank, which also retained its "buy" call.
Shares of DXN have gained about 1.6% so far this year, valuing the company that sells food, supplements, and consumer goods through direct selling at RM3.21 billion. All four analysts covering the stock have "buy" recommendations with 12-month target price of 89 sen.
The stock is also trading at about eight times its 2025’s estimated earnings. “The stock’s valuation is attractive in view of its proven business model, expansion plan and sturdy balance sheet,” RHB added.
On its part, DXN said it aims to expand its market presence in Brazil in FY2025.
“Our recent entry into Brazil presents a significant new market opportunity within Latin America,” said DXN executive chairman and founder Datuk Lim Siow Jin in a statement. With Brazil’s vast population exceeding 200 million, the potential for growth is immense.”
DXN will also leverage its established member network and strong brand presence in neighbouring Latin American countries, such as Mexico, Peru, Bolivia and Colombia, Lim added.