3 Things You Need To Know About Amway Malaysia Holdings Bhd

Amway Malaysia Holdings Bhd (KLSE:6351.KL) is one of the largest network marketing company in Malaysia. The Amway Brand, is one of the oldest network marketing company in the world and is part of the Alticor Group.

Amway Malaysia Holdings is the listed subsidiary of the Alticor Group that focuses on its business in Malaysia. The company has a long history in Malaysia and generates more than RM1.08 billion (S$340 million) of sales in the last 12 months. The company also has a market capitalization of more than RM1.3 billion (S$440 million). Here is what you need to know about this massive network marketing company.

High Return on Equity

Amway Malaysia has been able to generate a very strong return on equity (ROE) for its shareholders over the last decade. Its ROE has been averaging about 40% from 2006 to 2015. However, the company has been seeing a weakening of its ROE in recent years due to lower gross margins and higher operating expenses in its business.

Strong balance sheet

The company has been operating with a very strong balance sheet for the most part of its history. Even in the most recent quarter, the company was in a net-cash position with more than RM200 million and no debt on its balance sheet. The company was able to manage its business with such a low debt level due to its unique business model. Most of its sales are recorded in cash and it is able to keep its inventory at a very low level. This means that the company has a very low cash conversion cycle of just 15.7 days in 2015. The fast turnover in its operation means that the company requires a low working capital to run its business.


Amyway Malaysia has also been a consistent dividend payer. It has been paying a dividend every year for the past decade. However, due to its stagnant net profit over the decade, its dividend has not been growing as well.

At the current moment, the company is giving out a dividend yield of 3.1% for the investor.

Foolish Summary

Amway Malaysia Holdings has a long successful track record in Malaysia. The company has been profitable every year over the past decade. It is also been generating very high ROE for investors. However, the lack of growth in its net profit and dividend might be some area of concerns for investors.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Stanley Lim does not own shares in any of the companies mentioned above.