Multi-level marketing unit to remain star performer

Posted on 1 November 2008. Filed under: Uncategorized | Tags: , , , , , , , , , |

Multi-level marketing unit to remain star


Published: 2008/10/30

The multi-level marketing division contributes more than 70 per cent of the group’s total net profit and revenue

HAI-O Enterprise Bhd, a multi-level marketing (MLM) company and a Chinese herbs retailer, expects revenue to grow five per cent this fiscal year, helped mainly by its MLM business.

It almost doubled its revenue to RM373.82 million in the year ended April 30 2008, from RM189.35 million a year ago, thanks to its MLM business which almost tripled to RM281.6 million.

The MLM division contributes more than 70 per cent of the group’s total net profit and revenue and should remain the group’s top performer this year.

“Many people are now looking for a second job and the easiest way is to take up direct selling,” managing director Tan Kai Hee said after the company’s annual general meeting in Kuala Lumpur yesterday.

So far this year, the MLM division has signed up some 2,000 new members every month. It now has 70,000 members, of which one-fifth are active.

The company more than doubled its net profit to RM49.12 million in the last fiscal year, and expects net profit to stay flat.

“Our bottomline will be affected due to weaker ringgit, and higher operating and raw material costs,” said Tan.

Meanwhile, Hai-O’s plans to expand to Indonesia remains “on track”, and is expected to have its presence in Indonesia early next year.

“Currently, we are going through the product registration as well as testing of the computer systems,” said Tan.

Hai-O, which also plans to launch five new health food products by the end of this year, said that all its health food products have met the necessary Health Ministry requirements.

The company, with more than RM50 million cash in hand, said it will also continue to look for good investment opportunities.

“We believe that when there’s crisis, there’s opportunity too. (Nevertheless), we are conservative, and will (only) make investments that benefit our shareholders,” he said.

The company is putting on hold its plan to build a new factory, warehouse and office and will review the plan sometime next year.

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