Amway on steady path

AMWAY (M) Holdings Bhd is in a “normalisation” phase after a period of pandemic- driven hypergrowth.

Amway Malaysia, Indonesia, Singapore and Brunei’s managing director, Mike Duong, says 2024 has reinforced Amway’s business model and ability to adapt to evolving market conditions.

The company remains cautiously optimistic as it heads towards financial year ending Dec 31, 2025 (FY25). It expects to maintain its resilient financial performance amid the challenges of a mixed economic forecast, Duong says.

The company made a net profit of RM13.21mil in the first quarter ended March 31, down from RM32.74mil in the same period a year ago.

Revenue dropped almost 9% to RM294.29mil from RM322.06mil in the same quarter last year.

“Based on pre-pandemic benchmarks, including financials and force size, we remain on a steady and upward path,” Duong tells StarBiz 7.

Several key headwinds within the industry will continue to persist this year, he warns.

“These include inflation, rising living costs and cautious consumer sentiment.

“Malaysians are prioritising essential spending, leading to subdued demand for discretionary wellness products,” Duong says.

Amway Malaysia and Brunei general manager Jason Leng concurs.

“Fuel subsidy rationalisation and higher excise duties are expected to dampen spending power. As a result, consumption growth is likely to be modest,” he says.

Leng adds that the company is intensifying efforts to equip its agents known as Amway Business Owners, or ABOs, with the right tools, training and digital support to capture a bigger share of the market.

“While the economic outlook remains mixed, we are entering 2025 with clarity and confidence,” Leng says.

Amway is focused on pursuing opportunities that address non-communicable diseases (NCD) like obesity, high cholesterol, high blood pressure and high blood sugar, he asserts.

“Our research collaborations with institutions such as Stanford University and the National University of Singapore (NUS) reinforce our commitment to holistic health through science and innovation,” he says.

At Stanford, Amway supports the “Well for Life” research initiative, which explores how life experiences, emotions and biology influence long-term well-being, Leng says.

“Our partnership with NUS focuses on studying the efficacy of botanical ingredients in promoting health span and longevity.

“These collaborations strengthen our scientific foundation and position us for sustainable growth as we approach AM50 and beyond,” he says, referring to the company’s 50th Malaysian anniversary next year.

Leng adds that the company will intensify its focus on innovation via strategic partnerships and a robust product pipeline.

Rising demand

“The global wellness market is projected to reach US$1.8 trillion by end-2025, driven by rising demand for science-backed, personalised solutions. This growth reflects a shift from treatment to prevention, with consumers increasingly seeking cost-effective self-care and proactive health measures,” he adds.

He points out that the average life expectancy in Malaysia is 75 years, but the health span – the number of years lived in good health – is only 65.7 years.

This 10-year gap, according to him, is often marked by chronic illness, declining vitality and reduced quality of life.

“By 2050, people aged 60 and above will make up 26% of the world’s population, doubling to 2.1 billion, with many vulnerable to the “3 Highs” – high blood pressure, blood sugar and cholesterol.

Recognising this urgent shift, Amway will launch targeted health and well-being solutions this year, focusing on cellular health and healthy ageing, Leng says.

Known for its regular dividend payments, will Amway continue to reward its shareholders in these uncertain times?

Duong points out that the company paid out 60 sen per share last year, totalling RM98.6mil, representing 98% of its net profit.

He says the company remains “committed to protecting shareholders’ interests and delivering sustainable long-term value.”

“In line with our dividend policy, we aim to distribute at least 80% of annual net earnings to equity holders, subject to cash position, retained earnings, operational performance, financial outlook, capital expenditure and obligations.”

He says the company is “closely monitoring” ongoing tariff discussions between the US government and governments around the world to see if it will be affected by President Donald Trump’s global tariffs, which are on hold until early July.

“The situation remains highly fluid. We are in discussions with external stakeholders to get a solution that will best serve our ABOs and their businesses,” Duong says.

He notes that it is crucial for a company such as Amway to have a stable and predictable trade environment, so policymakers should prioritise solutions that continue to empower businesses and strengthen economic partnerships.

At last look, Amway was trading at RM5.10 apiece, valuing the entire company at RM838mil. In the last 52 weeks, the stock has traded between RM4.52 and RM7.40.