DXN Holdings Bhd’s (DXN) outlook is deemed positive, and its sequential earnings are expected to improve in light of planned price adjustments of around 9 to 10% in its top 10 markets including Mexico, India and Malaysia throughout next year, according to Maybank Investment Bank IB (Maybank IB).
“In addition, its continued growth in Latin America and penetration into new markets will drive group earnings growth in the medium term,” it said in its research note today (Jan 2).
The research house maintains its BUY call with an unchanged TP of RM0.90, based on 11x FY24E PER.
Meanwhile, Maybank IB said DXN’s sustainability journey just begun and its progress yet to be determined given its inaugural release of environmental, social and governance (ESG) data in 2023.
The group scored a slightly above average overall ESG score is 51 out of 100, under Maybank IB’s proprietary ESG scoring methodology.
Elaborating on DXN’s current sustainability practice, the research house said at present, DXN only monitors its Scope 1 greenhouse gas (GHG) emissions data, mainly from its manufacturing operations, particularly during the drying process of its core raw material, ganoderma.
“DXN has invested in solar panel systems in its factories to reduce its reliance on non-renewable energy sources, where 15% of its electricity consumption is from solar energy.
“Note that DXN’s annual progress in sustainability has not been established yet due to its inaugural release of ESG data following its public listing on 19 May 2023,” it said.
It added DXN is also continuously enhancing its existing controls and practices for waste management, including segregation methods and dedicated storage areas.
This include through sending bag logs and waste collected after harvesting ganoderma to biomass collectors to be recycled into biofertilisers. It also recycled its water (including rainwater, re-circulated water) to be used in plantations and spirulina farms, aside from using a tube well system.
