PETALING JAYA: RHB Funding Financial institution Bhd continues to carry an optimistic view on DXN Holdings Bhd’s outlook, sustaining a “purchase” name on the counter at 75 sen with an unchanged goal value of 93 sen.
The constructive sentiment was as a result of well being complement producer’s encouraging efficiency in its first quarter ended Might 31, 2023 (Q1 FY2023), stated the analysis home.
Different components embody the group’s promising progress potential, profitable entry into new markets, and resilience in opposition to rising operational prices, stated RHB Funding.
In a observe in the present day, the analysis home stated DXN’s stellar revenue margins and return on fairness are evident pertaining to its entrenched fundamentals and well-crafted enterprise mannequin.
“DXN’s present valuation is engaging, contemplating its stable progress prospects underpinned by new market growth and insulation from the rising prices,” famous analyst Soong Wei Siang.
For its first quarter, the group’s internet revenue edged up marginally by 0.6% to RM77.6 million in Q1 FY2023 from RM77.17 million within the corresponding quarter final yr.
In the meantime, the group has declared a dividend of 0.80 sen per share.
Steadfast amid headwinds
Regardless of slowing international financial progress and elevated inflation, RHB Funding sees DXN in an advantageous place to ship sustainable progress.
“This can be underpinned by the expansion in distributor member base because the group continues to strengthen its presence in key present markets and on the identical time makes inroads into excessive potential new markets,” stated Soong.
“As well as, the completion of the most recent section of upstream growth bodes properly for the group to seize the following rising demand and introduce extra revolutionary merchandise to draw greater gross sales,” he added.
“On prime of that, we additionally see DXN to be much less affected by any hike in prices because of its inside built-in manufacturing services, which account for greater than 90% of the group’s income and command a gross revenue margin of larger than 80%,” he additional added.
DXN returned to Bursa Malaysia on Might 19, 2023 after a 12-year hiatus.
It was beforehand listed in 2003 however was delisted in 2011 following a takeover and privatisation by its founder Lim Siow Jin, who’s at the moment its govt chairman.
As at 12.08pm, DXN’s share value rose 2 sen or 2.68% to 76 sen, giving the group a market capitalisation of RM3.79 billion.