Treasure Global Q3 2023 Earnings Call Transcript

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May 9, 2023

There are 4 speakers on the call.

Operator

Good morning, and welcome to the Treasures Global's Third Quarter Fiscal Year 2023 Results Conference Call. All participants will be in listen only mode.

Speaker 1

After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Alison Sos, Investor Relations. Please go ahead.

Speaker 2

Thank you, operator. Good morning, everyone, and welcome to Treasure Global's 3rd Quarter Fiscal Year 2023 Earnings Conference Call. With us on today's call are Sam Teo, Chief Executive Officer Jalen Tan, Chief Financial Officer and Jeremy Roberts, Independent Director. Before we begin, I would like to remind you that today's call contains certain forward looking statements from our management made within the meaning of Section 27A of the Securities Act of 1933 as amended And Section 21E of the Securities and Exchange Act of 1934 as amended concerning future events. Words such as may, should, project, expects, intend, plans, believes, Anticipate, hopes, estimates and variations of such words and similar expressions are intended to identify forward looking statements.

Speaker 2

These statements are subject to numerous conditions, many of which are beyond the control of the company, including those set forth in the Risk Factors section of the company's Form 10 ks for the year ended June 30, 2022, filed with the SEC. Copies of this document are available on the SEC's website at www.sec.gov. Actual results may differ materially from those expressed or implied by such forward looking statements. The company undertakes no obligation to update these statements for revisions or changes after the date of the call, except as required by law. Now it is my pleasure to introduce Dan Teo, Chief Executive Officer of Treasure Global.

Speaker 2

Dan, please go ahead.

Speaker 1

Thanks, Anson, and thank you to everyone joining us today. I'd like to begin by reviewing our current business and operational Then Jabin Chan, Chief Financial Officer, will review our financial performance for the 3 months ended March 31, 2023. Following that, we welcome your questions. Last week, we made an important announcement regarding This expansion of our business operation with the signing of Treasure Global First licensing agreement with a food and beverage partner. Before I dive into the details of this agreement and our plans for the future, I would like to quickly walk you through Treasure Global's It will lead us to uncovering a huge opportunity in the F and B industry.

Speaker 1

From its founding, Treasure Global was established to provide innovative seamless technology enabled solution to Southeast Asia. Our first proprietary technology solution is our ZX City App, a digital ecosystem to simplify lifestyle, mixed with instant rebate and affiliate cashback program. We have been highly successful in recruiting a large and growing number of users, building our customer database in the Flex City app. In 3 years, we have gained more than 2,400,000 registered users and over 200,000 monthly active users while growing top line revenues. However, Resideo revenue stream A historically low margin, in an effort to improve gross margins, we are focused on increasing user engagement and stickiness by providing our user with new products.

Speaker 1

This lead us to the development of 2nd technology solution, TACE, A transformational digital SMB management system, PACE provides a one stop automated solution for FIB merchants to streamline their business operations, improving operational efficiency and achieving cost saving for merchant. PACE currently offers digitalized processes, including e menus, ordering and e payment. Transaction recording with online payment or QR digital payment technology. System. There has been proven to reduce staff labor, and we offer a private domain of delivery services to access multiple dedicated delivery partners.

Speaker 1

Further, we plan to enhance pace with additional functionality to provide a complete solution offering, including merchant supply chain management and upstream purchasing. We believe that pace will revolutionize the effort between industry in Malaysia, a sector which currently face nearly inefficiency. There were more than 220,000 small to medium happy business owners in Malaysia in 2021. When the market is growing at an annual rate of 5.1% since 2015, we are confident and taste can become the market leader in automated solution for the sector. As we became closer to the F and B industry and increase our understanding.

Speaker 1

We saw a significant opportunity that will not only support the participation of taste, but establish a revenue stream for the company. Our strategy plan is to establish synergy with our technology solution by becoming a master since I saw of FFB Company in Southeast Asia. We will adopt tasting to new restaurants. We are also receiving revenue from monthly licensing fee and start off with legal period to entry. We have already made progress in our execution.

Speaker 1

In May, We signed a licensing agreement with Morgan Fields Holdings, Santelian Baja, a restaurant chair specializing in comfort food and American style barbecue. Under the agreement, Morgan Fields has granted Cheshire Global an exclusive worldwide license to grant sub licensee to third party to use Morgan Fields checkmark for the restaurant business. Logan Fields will also adopt Treasure Global Digital F and B Management System, Taste. It is 9 franchisees in Malaysia, China and Singapore, accelerating the rollout of taste in the region. Not only will Trish the adopted into their 9 existing franchisees, but Treasure Global will have the opportunity to grant sublicensees to third party to open additional Mogul Field restaurants in the region that we also adopted.

Speaker 1

Fresh Air Global We act as master franchisors by managing brand royalty and raw material supply to accelerate this process of expansion for taste. This agreement will provide Treasure Global with additional revenue stream, including start up fees from new locations, monthly licensing fee and supply chain. Here we also collect variable data inside to ensure page development monetizable various data features for merchants. With the Mogul Fuel Group. We will replicate this process with additional procurement F and B brands in Southeast Asia to become the largest F and B change without only any grips and mortar.

Speaker 1

We believe this strategy will help us to expand the use of our innovative solution more rapidly as well as to capture data from vital components of supply chain to better understand, improve and innovate our solutions and future solutions. Now while we are excited about our new business ventures, we remain committed to advancing and developing technology solutions As demonstrated during the Q3 of fiscal year 2023, we were pleased to report total revenues of US18.2 million dollars with improved gross profit up 853% year over year and strong active user retention rate up 2 58%. Our technology solutions already capture a significant amount of big data via translation that take place within our apps With the better use of AI powered tech tools through Power BI, Treasure Global will be able to gain further insight, make better business decision that enables smart strategy planning. We plan to leverage AI further and look forward to near term enhancement to be announced. During the quarter, we signed an MoU with Boost, a regional full spectrum FinTech player.

Speaker 1

This agreement We provide access to a larger merchant network and leverage our AI based digital financing solution from Boostrredit, which offer a range of renting services such as working capital financing, employee financing and supply chain financing to financially empower small and media enterprises. Boost Credit Digital financing solution will be onboarded into the Treasure Global TACE program, connecting Treasure Global with a growing network of merchants to F and B provider as potential user of our taste and density platform. This will also increase Tradeshare global brand exposure, building awareness among the F and L businesses in Malaysia. In summary, we're pleased with the progress we have made to date in targeting higher margin revenue streams. The opportunity to expand our technology solution further into the F and P sector in Southeast Asia will be a key driver in profit and margins into the future.

Speaker 1

Now I will hand the call over to Jamie, who will review our financial results in greater detail.

Speaker 3

Thank you, Sands, and good morning, everyone. Today, I will review our financial results for the 3rd fiscal quarter ended March 31, 2023, compared to the corresponding period the year prior. Total revenue for the Q3 of fiscal year 2023 were approximately US18.2 million dollars a decrease of 14% from US21.1 million dollars for the Q3 of fiscal year 2022. The decrease was mainly attributed to the decrease in voucher product revenue as part of the Corporate strategy to improve margin by allocating resources to membership subscription. As Stan has discussed, we are increasingly focused on growing margin and gross profit, which has already started showing in our results.

Speaker 3

Gross profit for the 3 months to March 31, 2023 of US0.15 million dollars compared to US0.02 million dollars for the same period the prior year. This translates to growth of 853% year over year. The increase in gross profit was primarily due to an increase in member subscription revenue with more customers subscribed to the company's VAP member program. We are actively focused on growing our user engagement through increased retention rate, which will generate higher profit and margins. Zaz CP has over 2,400,000 registered users and 209,000 monthly active users As of March 31, 2023, growth of quarterly active users year over year at March 31st is 0.3% higher than prior year.

Speaker 3

Exits user retention rate for the quarter to March 2022 was 2 88% highest than in the 3rd fiscal quarter the year before. This means that we have acquired repeat users compared to new users, showing highest levels of engagement on our platform that keep them coming back. A total of 1,000,000 transactions by our registered users were translated over the Q3 of fiscal year 2023, up by 41% compared to the prior corresponding quarter. Net loss was approximately US2 US3.9 million dollars for the 3rd quarter, down 9.3% from approximately US3.2 million dollars For the prior year Q3, the reduction is mainly due to lower other expenses. Our operating expenses for the 3rd fiscal quarter of US3 $1,000,000 were up 15.6% compared to prior corresponding period, mainly due to increased general and administrative costs.

Speaker 3

Cash and cash equivalents were approximately US4.1 million dollars as of March 31, 2023 compared to approximately US4.7 million dollars as December 31, 2022, Treasure Gopher had a positive working capital of approximately US2.1 million dollars as of March 31, 2023. I will now hand the Call back to Fang.

Speaker 1

Thanks, Jerry. We are extremely excited about the new and existing opportunity Unlock by Treasure Global is the F and B Industry in Southeast Asia. The company looks forward to replicating its Master franchisor business strategy with additional popular chain in the region. We believe this market is primed for restructuring as going digital with pace We'll help the franchisee to have better success. Treasure Global is well placed to achieve strategy priority and simultaneously continue to develop as a leading innovative technology solutions provider in the Southeast Asia region.

Speaker 1

This ends our prepared remarks. Now I would like to open the call for questions. Operator, please go ahead. There are no questions from the phone. I will now pass back to Santiago.

Speaker 1

Please go ahead. Thank you again for joining us for today's call. As always, we appreciate the continued support of our investors and stakeholders.

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