Amway (Malaysia) experienced a surge in shares early Thursday following a significant jump in fourth-quarter profit.

Share Performance

The Malaysia-listed company saw its shares climb as high as 7.8%, eventually settling at 6.9% higher at 6.94 ringgit. This increase brings the year-to-date gains to an impressive 18%.

Financial Report

Amway reported on Wednesday that its net profit for the fourth quarter stood at MYR32.4 million ($6.8 million), up from MYR23 million in the previous year. This growth was attributed in part to lower cost of sales. Despite a 9.8% decrease in quarterly revenue, which amounted to MYR358.3 million.

Future Outlook

According to TA Securities analyst Liew Yi Jiet, the company may experience a decline in revenue moving forward, reverting to prepandemic levels due to a shift in consumer preferences away from health supplements. It is anticipated that Amway will focus on bolstering the growth of its business owners and introducing a more innovative product mix.

Dividend Forecast

TA Securities projects that Amway will continue to offer attractive dividends, with an expected dividend yield of 8.6%-9.5% for the years 2024-2026. In 2023, the stock's dividend yield was at 9.2%.

Analyst Recommendation

TA Securities maintained a hold rating on Amway and kept its target price at MYR5.80, pending an upcoming analyst briefing scheduled for later Thursday.

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