The group's recent foray into new markets, such as Brazil and Argentina, is experiencing promising sales and member recruitments.
PETALING JAYA: DXN Holdings Bhd
’s growth trajectory remains dependent on its continued expansion into Latin America, according to analysts.
Maybank Investment Bank Research (Maybank IB Research) said its financial year earnings growth projections of 12% year-on-year (y-o-y) for DXN’s next financial year is based on the group’s existing presence in core markets such as Peru, Bolivia, Mexico and India.
DXN is involved in the sale of health oriented and wellness consumer products.
The group also made a recent foray into new markets such as Brazil and Argentina, where it is experiencing promising sales and member recruitments.
Meanwhile, RHB Research said DXN’s results for its financial year ended Feb 28, 2025 (FY25 ) met expectations thanks to solid growth in key markets and efficiency gains, which offset the impact of unfavourable foreign exchange rates.
“Core net profit of RM329mil accounted for 100% of our full-year forecasts but only 97% of street consensus. Post-results, we make no material changes to our FY26 to FY27 earnings forecasts and roll out FY28 earnings, estimating 12% growth year-on-year.
“Our discounted cash flow-derived target price stays at 88 sen, which implies 11 times FY26 price-earnings ratio. The valuation is below the consumer sector average to take into account the highly regulated direct selling industry DXN is in,” RHB Research said in a report.
DXN’s FY25 revenue rose 6% y-o-y to RM1.9bil, underpinned by robust growth in its key markets.
This was supported by effective marketing efforts and product launches to drive sales productivity, said the research house.
“We look forward to the results of the entry to Brazil, leveraging on DXN’s established existing network in Latin America. We expect significant earnings contribution from this venture in three to four years,” the research house added.
It said DXN has a sturdy balance sheet with FY25 net cash standing at RM517mil or 10.4 sen per share to facilitate a generous dividend payout.
