CYBERJAYA (Aug 21): Health and wellness direct selling company DXN Holdings Bhd, which relisted on Bursa Malaysia’s Main Market on May 19, now plans to enter the ready-to-eat meal products market, while expanding its cosmetics product range by the end of this year.
The company is known for its ganoderma business where it cultivates, manufacture and market it in the form of health food supplements.
Speaking at the press conference after its 27th annual general meeting (AGM), DXN Holdings Bhd founder and executive chairman Datuk Lim Siow Jin said that the new segment is expected to boost its sales revenue by next year.
“So we believe this [new segment] will bring a lot of sales — [we will launch] by the end of this year.
“I think this [the sales] will be reflected in next year [earnings]. This year will be more in preparing [the products],” said Lim.
However, DXN has yet to forecast the amount that the new segment is expected to add to the group’s revenue.
“It is more on the experimental basis. We have received good responses for the ready-to-eat food,” Lim said when contacted by The Edge.
DXN posted a net profit of RM275.4 million in the financial year ended Feb 28, 2023 (FY2023), a 13.37% increase from the RM242.92 million in FY2022, on the back of higher revenue driven by strong sales momentum and higher sales growth, mainly in fortified food and beverage (F&B) products in Latin America, Morocco and India.
Revenue rose 28.8% to RM1.6 billion for FY2023 from RM1.24 billion in the previous year.
Lim said that the ready-to-eat food meals will include mushroom burger, paratha bread and various rice-based dishes such as chicken rice, briyani rice and fried rice.
On the cosmetics segment, he said that the group will expand its cosmetics products into a full range of products. Currently, DXN is selling head-to-toe personal care and cosmetics.
When asked how much it will spend on the new segment and expansion, Lim said that it will be “a few million ringgit” considering that food products wouldn't need a bigger capital expenditure (capex), he noted.
DXN’s gross revenue composition in FY2023 consists of fortified F&B which contributed 64.5% (or RM1.03 billion) of its gross revenue; followed by health and dietary supplements at 24.3% (RM388.8 million) as well as personal care and cosmetics products at 6.7% (RM107.2 million), according to its annual report.
From the group’s recent listing exercise, DXN said that it aimed to raise RM112 million with the bulk amounting to RM80 million, or 71.4%, for repayment of bank borrowings, a RM7.9 million (7.1%) for working capital and another RM24.1 million (21.5%) for listing expenses.
China market expansion
Despite concern over growth in China, Lim said that the group will continue to focus its expansion in China, however, the group is currently in the midst of looking for “niche products” to market in China.
The expansion in China came after the group recently completed the construction of an additional cultivation facility and two manufacturing facilities in China.
Besides China, DXN also plans to expand into five markets, on top of its current 48, namely Argentina and Brazil in the Latin America region, as well as Algeria, Nigeria and Ghana in Africa.
Shares in DXN were unchanged at the time of writing, with a market capitalisation of RM3.49 billion.