KUALA LUMPUR: Multi-level marketing (MLM) company Hai-O Enterprise Bhd sees its energy division potentially contributing a lot more to group turnover in the future, given the tremendous opportunities in the market, says group managing director Tan Kai Hee.
“We have invested about RM4mil in our energy division for, among others, research and development to come out with products for commercialisation,” he said yesterday after the company AGM.
The group’s subsidiary Hai-O Energy (M) Sdn Bhd oversees its energy-related business.
On whether the energy division could contribute more to revenue than its MLM business that currently accounted for about 80% to total sales, Tan said the results might only be seen next year.
“At this time, we are planning to launch a boiler by early next year. Our showhouse in Klang will open in mid- or end-November to showcase our technology products,” he said, hinting that the boiler would be priced at about RM500,000 per unit but the price could change depending on market demand.
On the group’s financial performance, Tan said he expected the second quarter results would again be affected following the amendment of the Direct Sales Act 1993 by the Government to protect consumers from becoming victims of people attempting to maximise profit from direct sales.
The amended Act provides for a heavier penalty for cheating when conducting direct sales, which includes scratch-and-win activities.
“It will take sometime before we see the recovery. MLM players like us agree with and support the amendments to improve the industry,” Tan said.
Despite that, he said Hai-O was still in a healthy position, chalking a turnover of RM10mil every month.
Hai-O’s net profit for the first quarter ended July 31 dropped 57.7% to RM7.8mil compared with the same period last year. Its revenue fell 63.1% to RM54.8mil from RM148.6mil previously. It said the drop was mainly due to lower revenue recorded by the MLM division.