KUALA LUMPUR: Health and wellness-oriented direct sales company DXN Holdings Bhd (DXN) is confident of continuing its strong sales growth momentum this year supported by new products and expanding its presence into existing and new markets.
Founder and executive chairman Datuk Lim Siow Jin said last year the company recorded a sales growth of 28.8 per cent despite going through a challenging year including logistical uncertainty and currency fluctuations in most countries.
He said the strong growth was due to the company only making price adjustments of around 6.9 percent last year compared to other direct selling companies (MLMs) who adjusted between 20 to 30 per cent of their product prices.
"We also expect the company's prospects for the coming year to improve, contributed by the expansion of presence in large markets such as Brazil, which has a population of over 200 million people.
"Although we haven't entered this big market yet, we already have several thousand members in Brazil and 36,000 members in Argentina. In fact, the main contributor to the company's sales at the moment is in Peru, one of the countries in South America that contributes 25 per cent to DXN's sales.
"The next growth engine for us is Brazil, where if we can achieve the same sales performance as in Peru, then the company's sales value can double. This is because the total population of Brazil is seven to eight times more than Peru which currently has 33 million people," he said.
He said this at a press conference in conjunction with the company's listing on Bursa Malaysia, in Cyberjaya, last week.
Commenting further, Lim said the company plans to continue to increase product offerings through new health and wellness products.
"Currently, we have 452 stock keeping units (SKUs) in the product portfolio with 327 manufactured internally. We are committed to research and development (R&D) and working towards expanding our product offering to ensure we are able to meet the changing needs of consumers and increasing member engagement," he said.
The company recorded a 19.3 per cent jump in revenue to RM405 million in the fourth quarter ending February 28 compared to the same quarter last year.
DXN's profit before tax (PBT) and profit after tax (PAT) for the quarter recorded a positive amount of RM112.4 million and RM57.9 million respectively.
The company also recorded a higher income of RM1.6 billion representing a 28.8 percent increase in the financial year ending February 28, compared to RM1.2 billion the previous year.
DXN's initial public offering (IPO) amounted to 100 million shares for Malaysian public applications, oversubscribed by 3.2 times, when it received a total of 12,146 applications for 420.12 million shares issued.
The company's IPO comprises the issuance of up to 932.67 million shares, including an institutional offer of 772.67 million shares and a retail offer of 160 million shares at 76 cents per share.
The IPO is expected to raise around RM121.6 million, of which RM80 million or 65 per cent of the proceeds will be used for repayment of bank loans, 15 per cent for working capital requirements and 20 per cent to fund fees including IPO and listing related expenses.