DXN Holdings catch my attention due to its share price has been down for more than 16% for the past one week. Here is what you need to know:
Gano Global Supplements Pte Ltd, one of the big shareholders of DXN Holdings Bhd, just reduced its stake, letting go of a solid 4.5% chunk in a direct deal. Why is that so? Let’s continue to read. One thing that catch my attention is that they’re keeping the sale price secret!! But then, based on Bloomberg data hints that 223.77 million shares were sold off at 60 sen each, raking in a cool RM134.26 million, what a big move!!
Now, a bit of a history throwback: Gano Global, linked to KV Asia Capital Pte Ltd, originally grabbed a 25.7% stake in DXN back in 2017. Fast forward to last week, DXN announced a bold move — chartering a Gulfstream G550 jet, aiming to scale up its global operations.
But hey, this isn’t just any deal; it’s a related party one. The jet is owned by LSJ Logistics Ltd, a unit of LSJ Global Sdn Bhd, which happens to be a major shareholder who directly held 68.268% of shares as at 31st May 2024. And guess who’s behind LSJ Global? None other than DXN’s big boss and founder, Datuk Lim Siow Jin.
When it comes to revenue, DXN’s got a pretty diverse playbook. A whopping 57.9% of its FY2024 sales (totalling RM1.9 billion) come from Latin America, while Asia, especially India, chips in 25.8%. They’re serious about production too, with 13 factories spread around the globe and more coming up in Bangladesh and Nepal.
All this talk about the jet deal made the market uneasy. DXN shares dropped to a record low of 49 sen last Friday (Nov 8), causing some panic among investors.
Financial Performance at a Glance:
If you look at DXN’s performance over the years, from FY2022 to FY2024, it’s clear that their revenue and profit before tax (PBT) have been on the uptrend. Even their trailing 12-month numbers as of August 2024 are getting better. So, we’ve got our hopes up for even stronger financial results in FY2025! That said, there was a dip in net profit margin in FY2023 compared to FY2022. But good news: it bounced back a bit in FY2024.
Now, let’s talk about cash flow! The company’s cash flow from operating activities is improving year by year, and that’s keeping their cash reserves in a healthier state. Sure, they’ve been spending more on financing and investing activities, but it’s still quite manageable. Just a heads-up: the higher cash outflow from financing in the trailing 12 months up to August 2024 was mainly because they paid close to RM140 million in dividends. So yeah, something to keep an eye on!
Technical Chart at a Glance:
Checking out DXN’s technical chart as of 12/11/2024, the stock price has really hit rock bottom, dropping to its lowest at RM 0.47. The overall trend is clearly on a strong downtrend, and it looks like it might stay that way until there’s an obvious shift upwards. Moving forward, we’ve got to keep a close eye on the share price for any signs of change, whether it’s moving from a downtrend to sideways or even turning bullish. If you’re invested in DXN, don’t just chill—stay alert to the company’s plans and how the stock price is moving!