PETALING JAYA: Health and wellness direct-selling company DXN Holding Bhd’s profitability is expected to be supported by stable product demand, upcoming price revisions and higher-margin health and dietary supplements, according to RHB Research.
For the first half of financial year 2027 (1H27), DXN’s revenue fell 1.1% year-on-year (y-o-y) to RM949.8mil, weighed down by a softer first quarter (1Q).
Earnings before interest, tax, depreciation and amortisation (Ebitda) declined 2%, while its Ebitda margin narrowed by 0.3 percentage points to 28.4%, mainly due to higher staff costs linked to expansion and impairment losses on receivables. However, 2Q revenue rose 5.3% y-o-y and 14.4% quarter-on-quarter to RM506.8mil, supported by sales growth in Peru, Bolivia and India of 13.7%, 49.3% and 10.7% respectively.
Growth in Bolivia was partly supported by currency appreciation, while purchases ahead of upcoming price revisions boosted sales in Peru and Bolivia compared with the previous quarter. DXN’s 2Q Ebitda margin widened by 1.6 percentage points y-o-y to 29.9% supported by stronger sales and lower foreign exchange losses of RM800,000, compared with RM6.5mil a year earlier.
It also recorded RM6.5mil in aircraft charter-cost savings following the termination of the arrangement in May 2026. Net profit growth was further supported by a lower effective tax rate of 30%, compared with 38.3% a year earlier.
“We expect profitability to remain supported by stable product demand and price revisions scheduled for 3Q of financial year 2027. We also remain positive on the potential for higher-margin health and dietary supplement products in Latin America,” said RHB Research in a note.
In Peru, DXN offers fewer than 10 health and dietary supplements among about 90 products, leaving room to expand its range and encourage higher spending among existing customers as more product registrations are approved.
Meanwhile, RHB Research said manufacturing expansion across Malaysia, Peru, Bolivia and Morocco, involving about RM600mil in capital expenditure, should improve product availability, shorten lead times and reduce supply-chain costs.
