With a focus on expanding into new markets, strengthening its foothold in existing markets, and introducing innovative product offerings, DXN Holdings Bhd (DXN), a global health and wellness direct selling company, remains poised to sustain its robust growth trajectory.

The company, which re-entered the public market earlier today (or May 19), is confident that the relisting at Bursa Malaysia will also help DXN to strengthen its brand visibility, attract new investors, and capitalise on emerging market opportunities for sustained growth.

Datuk Lim Siow Jin, the Executive Chairman and Founder of DXN, expressed satisfaction with the company's robust performance over the past years, demonstrating resilience in the face of external market challenges.

“As a matter of fact, we achieved a remarkable sales growth of 28.8% in 2022, despite facing challenging circumstances such as logistical uncertainties and currency fluctuations in many countries.

He attributed this robust growth to DXN's moderate price adjustments of only around 6.9% compared to other multi-level marketing (MLM) companies that typically adjust their product prices by 20% to 30%.

The company recorded a revenue increase of 19.3% to RM405 million in the fourth quarter ended February 28, 2023, compared to the same quarter in the previous year.

DXN's profit before tax (PBT) and profit after tax (PAT) for the quarter amounted to RM112.4 million and RM57.9 million, respectively.

It also achieved higher revenue of RM1.6 billion, representing a 28.8% increase for the financial year ended February 28, 2023, compared to RM1.2 billion in the previous year.

Lim also credited the company's success to the strong demand for their fortified food and beverages, particularly their popular coffee products, among members worldwide.

He added that DXN’s vertically integrated supply chain — where research, cultivation, and manufacturing are being done in-house — insulates the company from external supply chain shocks.

“The company's dedication to excellence and customer satisfaction remains unwavering, driving our commitment to continued value creation for stakeholders. And the strong financial performance of DXN demonstrates its ability to navigate the competitive landscape while capitalising on emerging opportunities.”

MOVING FORWARD

"We anticipate improved prospects for the group in the coming year, driven by our expansion into major markets such as Brazil, which has a population of over 200 million, and Argentina," added Lim.

"Although we have not yet entered these significant markets, we already have several thousand members in Brazil and 36,000 members in Argentina. In fact, the main contributor to the group's sales at present is Peru, one of the countries in South America that accounts for 25% of DXN's sales.

Therefore, the next growth engine for us is Brazil, where if we can achieve the same sales performance as in Peru, the company's sales value could increase two-fold. This is because the population of Brazil is seven to eight times larger than Peru's current population of 33 million," he said.

Currently, DXN’s active member base stands at 3.6 million across more than 180 countries.

“Currently we have 79 sales branches across 50 markets. We intend to cover all continents in the world via growing our member base or partnering with external distribution agencies which have the advantage of local market know-how and better networks with local stakeholders,” Lim explained.

Besides South America, Lim said that the group also views Middle East and North African countries, such as Morocco, Egypt and the United Arab Emirates as important markets for DXN.

He made these remarks during a media briefing held in conjunction with the company's listing on Bursa Malaysia on Thursday.

Lim stated that they plan to continuously enhance their product offerings through new health and wellness products.

“We are committed towards research and development as well as working towards expanding product offering to ensure we are able to cater to changing consumer needs and enhancing member engagement,” he said, adding that it will continue with the expansion of its vertically integrated global supply chain by having more cultivation and manufacturing facilities.

"At present, we have 452 stock-keeping units (SKUs) in our product portfolio, with 327 developed internally. We are committed to research and development (R&D) and strive to expand our product offerings to ensure we can meet the evolving needs of consumers and enhance member engagement," he said.

THE RELISTING

The initial public offering (IPO) of DXN comprises 100 million shares for Malaysian public subscription, which was oversubscribed 3.2 times, with a total of 12,146 applications for 420.12 million shares.

The group's IPO consists of the issuance of up to 932.67 million shares, including an institutional offering of 772.67 million shares and a retail offering of 160 million shares at 76 sen per share.

The IPO is expected to raise approximately RM121.6 million, with RM80 million or 65% of the proceeds allocated for bank loan repayment, 15% for working capital, and 20% to cover fees including IPO and listing expenses.

Notably, DXN had previously undergone a significant event in its corporate history when it was initially listed on the Main Market of Bursa Malaysia in 2003. However, in December 2011, following a takeover and subsequent privatization by Lim, the company was delisted.

Explaining the motives behind the privatisation, Teoh Hang Ching, DXN's executive director and CEO, stated that it aimed to streamline the company's operations by refocusing on its core direct-selling business and divesting non-core sectors, including tourism, land, and property development.

Teoh further emphasised that the relisting initiative serves to bolster DXN's market reputation and position the company for heightened competition among prominent players in the direct-selling industry.

Besides presenting an exciting opportunity for investors to participate in the growth potential of the company, the relisting is also for profiling purposes.

“It’s to enhance the public relations of the company. Not so much for raising funds since we are already cash rich. Becoming a listed company will help our growth plans and give assurance to stakeholders in terms of our business model and foundation,” he added.

Visit the website for more details: www.dxn2u.com