Treasure Global Q4 2023 Earnings Call Transcript

Quartr
Provided by Quartr
September 29, 2023

There are 6 speakers on the call.

Operator

Good day, everyone, and welcome to Global Treasure Inc. 4th Quarter and Fiscal Year 2023 Conference Call. At this time, participants are in a listen only mode. A question and answer session will follow management's remarks. This conference call is being recorded.

Operator

A replay of today's call will be available on the Investor Relations section of TGL's website and will remain posted there for the next 30 days. I will now hand the conference over to Sophia Bashford, Senior Account Director, Investor Relations KCSA for introductions and the reading of the Safe Harbor statement. Please go ahead.

Speaker 1

Thank you, operator. Good morning, everyone, and welcome to Treasure Global's 4th Quarter and Fiscal Year 2023 Results Conference Call. With us on today's call are Sam Teo, Chief Executive Officer Michael Chan, 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, expect, intend, plans, believes, anticipates, hopes, Estimates and variations of such words and similar expressions are intended to identify forward looking statements.

Speaker 1

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 this call, except as required by law.

Speaker 1

Now it is my pleasure to introduce Sam Teo, CEO of TGL. Sam, please go ahead.

Speaker 2

Thanks, Sophia, and thank you everyone for joining us today on our 4th quarter fiscal year 2023 Earnings Conference Call for the period ended June 30, 2023. I'm happy to be here with To provide an update on our business, firstly, I will recap Treasure Global as our main growth driver, followed by a review of specific highlights from the Q4 and subsequent to the quarter end. I will then repeat Our Chief Financial Officer, Michael Chen will then discuss the financial highlights of our 4th quarter and fiscal year financial results. Following that, we will be happy to answer your questions. Treasure Global or 3GL is a Malaysian We have a strong track record of developing cutting edge solution for our customer base.

Speaker 2

And through our proprietary technology platform, we developed 2 primary technology solutions, Zexcity and Pace. We are providing online e commerce with offline physical retailer. Given our experience and We established a 3rd growth driver to this year as a food and beverage master franchisor, We believe opportunity to leverage our platform to reach a more expensive Consumer base and are able to introduce new products and innovation, which we expect to drive our growth in the year ahead. Before discussing the various new growth opportunity that we are now advancing, I would like to note that the advancement that we made with Zest City and in fiscal 2023 and in the 4th quarter, which have expanded our market footprint and help grow our reach to new market and customer segment. Our first proprietary product, the Zest City App, is a To simplify lifestyle needs with instant rebates and fair cashback program, Zexcity both consumer and merchant to maximize value creation and enhance the shopping experience.

Speaker 2

To date, We have been highly successful in recruiting a large and growing number of units, gaining more than 2,600,000 registered users and over 2 We have achieved this growth through innovative enhancement and strategy partnership. In the Q4, we integrated AI technology into our ZSTD app with a user friendly chatbot powered by Allowing us to offer consumer a more personalized And targeted reward experience, our next gen personalized checkbox assistant, which we have named Jojo, went live in August for Zechcity user and is serving as a key market differentiator, positioning 3 Treasure Global as a leader In the AI driven e commerce space, Jojo used AI and deep learning to check user Personal preferences will recommend idea promotion and products for them. The added functionality is expected to enhance user retention and attract new customer to drive revenue growth as well as We secured a number of partnerships during the 4th quarter, which continues to be key to our strategy. 1st, Treasure Global secured an exclusive partnership with Enogenoji, The health and wellness plan to expand the range of products available on e commerce marketplace, Blackstock, which is housed within the Zechtid app. This partnership opened a new market targeting the large and growing health and wellness Industry, a new revenue stream for Inogen and other affiliate partner products sold on the Vazity app is contributing to Treasure Global Revenue Growth, Margin Expansion and Prem Present as we continue to expand throughout In July, Treasure Global collaborate with the Malaysian Ministry of Domestic Check And cost of living for the launch of the packaged Rama program, which offer various financial savings initiative, Reducing the cost of living for lower income group, including university students.

Speaker 2

As part of this, Zestity offers a comprehensive package of Living Essential eVoucher on the app for items such as petrol, food The initiative showcase ZX City's cutting edge digital ecosystem and attract new So supporting this important social program in September, we collaborate with the Borderland Music We were to provide the 1st guest list and ticketing platform Power Music Festival in Malaysia, powered by the Zecity app. Zecity gained significant exposure during the event ticketing solution as well as penetrating the new market of Sarawak. Treasure Global also charged fees for each TKSO, providing a new revenue generation opportunity for the company. Moving now to Taste, our 2nd proprietary solution, which we were proud to launch during fiscal. ACE is a transformational digital food and beverage management system providing merchants with a one stop management and automated Improving operation efficiency and saving, while adjusted revenue streams are historically low margin, Taste offers an opportunity to generate higher gross margin for Treasure Global through increasing user engagement and stickiness.

Speaker 2

Paste is a product that merchants have come to really on for their business needs to stop using Paste. Please currently offer digital live processes, including e menus, ordering, e payment, transaction recording with online payment or QR Digital Payment Technology. Taste Smart Food and beverage system also provide a device queue system proven to reduce staff labor and will offer a private domain of delivery services to access multiple dedicated delivery partner. We are now excited to announce that we are currently developing CASE 2.0, which is expected to be launched within the next month. This upgrade is providing functionality on both the merchant and customer side.

Speaker 2

The additional functionality We will provide a complete solution offering, including merchant supply chain management and upstream purchasing, which we believe will significantly attract merchants to the platform. It will also provide a branded interface For customer and merchants in the larger console version, since its launch, this has received positive feedback from users as well as in transaction and basket revenue as well as an increase in user stickiness with customers returning more often. Treasure Global has been focused on expanding case throughout Malaysia and also to new markets. In July, Treasure Global signed a standing agreement with the Malaysia Retailchain Association for Taste to become the exclusive partner as the recommended digital And it is recommended to its member to subscribe as Taste Merchant. The MRCA has over Another key partnership, Rich has helped drive the growth of Treasure Global Network and Food and Beverage Provider in our partnership with Boost Credit, A leading regional full spectrum fintech player, we signed a memorandum of understanding Reboost to leverage their digital financing solution, which include working capital financing, invoice financing and supply chain financing to further strengthen the pace progress.

Speaker 2

As we expanded further into the food and beverage industry through development of taste, we identified a significant opportunity, We now found the 3rd growth driver for Treasure Global. We made a strategy decision to become a master franchisor in Southeast Asia For popular restaurant chains, we're also recruiting them to our taste platform. Under the subsidiary name, Food Link, that Treasure Global has established a house for Embarrassed Master Franchise Services Activity. We will manage all brand And related intellectual property through lease ownership or joint venture agreement with brands that we secure partnership with. We will also provide food and beverage consulting, including market and product optimization as well as supply chain monetization By executing Treasure Global and to become the larger food and beverage chain without owning any physical bricks This unique business model allows Treasure Global to establish synergy with Our technology solution deepening our position in the food and beverage industry, not only can we strategically grow our taste user Based as we adopt it into new restaurant, additionally, we are securing a new revenue stream for monthly licensing fee In addition, we believe this strategy will help us to expand the use of our innovative solution More rapidly as well as to capture data on vital component of supply chain to better understand, improve and innovate Our current solution and future solutions.

Speaker 2

We have already made progress in our execution, signing licensing agreement In May, we signed a licensing agreement with Morgan Field, A restaurant chain specializing in comfort food and American style barbecue. The agreement Granta, Treasure Global, an exclusive worldwide license to grant sublicensee to use Morganville's trademark for the restaurant business. Morgan Stanley will also adopt taste in the 9th franchisees in Malaysia, China and Singapore, Accelerating the rollout of taste across the region. Not only will taste will be adopted into their existing life franchisee, Have the opportunity to grant sublicensee to third party to open additional McAfee restaurant in the region that we also adopt Taste. Most recently, we secured a license agreement with fast growing Malaysian food and beverage brand, I'll be used.

Speaker 2

Granting Treasure Global the exclusive sublicensee to third party to use its trademarks under the agreement. Treasure Global likes to grant sublicensee to any third party to open additional Abe used businesses in Malaysia. As the master franchisee, Treasure Global will manage brand and raw material supply. In addition, All the RBU's food and beverage outlets will be optically to adopt pace across all their businesses. Again, Treasure Global will gain additional revenue stream for monthly licensing fees, start up fees for new location Management, Abiyu's Food and Beverage Group of businesses, including the high selling Carli Park From grab and go food cart as well as the Abeyue's Wallroom Street Food kiosks, Abeyue's Cafe Restaurant And Abeus Mark B2C online e commerce service, the chain currently has 12 outlets operating across Malaysia With brand to open 35 outlets by the end of 2023 and 300 outlets to be opened over the next 5 years In addition, Abeyue's brand to access Southeast Asian market in the future.

Speaker 2

Clearly, Treasure Global has significant opportunity for us and fully, And we are focused on increasing gross margins from the ongoing development of each of these business channels. We'll talk about our significant market opportunity both in Malaysia, specifically and more broadly in Southeast Asia, Our domestic market of Malaysia has a growing population and solid near term economic growth outlook. Malaysia recorded a strong post pandemic recovery in 2022. And according to the IMF, Malaysia GDP growth is expected to maintain an average annual rate of 4.5% for the next 5 years, including 2023. It's a strong macroeconomic framework, including a track record of fiscal prudence And credible Monetary Policy Framework have contributed to the stabilized macro environment.

Speaker 2

Importantly, Malaysia has a very high rate of digital connectivity. We have a population of of which 94% are Internet users. Looking at our registered users, We have only penetrated 7.3% of our addressable market domestically for Zest City, which is makeup of digitally connected consumer. In the F and B industry in Malaysia, There were more than 220,000 small to medium food and beverage business owners in Malaysia in year 2021, And the market has been growing at an annual rate of 5.1% since 2015. We are confident that K The expansion opportunity, which include entry into other Southeast Asian market, Which has much larger population and similar demographics are significant.

Speaker 2

In our Lumenet, we plan to take into our neighboring countries Such as Indonesia, Thailand and Japan for regional expansion. As we have already announced, we are targeting Indonesia first, Which has 10 times the population of Malaysia, but similar demographic and language to Malaysia. With both Malaysia and Indonesia being multi ethnic and multi ethnic, there is the opportunity For several seasonal marketing campaigns throughout the year around the various religious holidays and festivals, We have already taken significant steps to enter the Indonesian market. Recently, we announced the company has filed to form an e commerce venture in Indonesia with Harmony Pagitunya, HBD. Treasure Global will hold a 70% major stake in HPD, and Treasure Global will grant HPD exclusive right to promote The letter of intent marks the beginning of the company's extension into the Indonesian market aligning with our strategy to grow internationally with innovative local partner.

Speaker 2

The venture will provide Treasure Global and its proprietary app, ZX City, with a network of 200,000 merchants and data of 5,000,000 users within the cellular industry in Indonesia. The Indonesian market has a substantial Internet user base of 213,000,000 out of a population of 276,000,000 We Have also made a step in developing new product to further expand our addressable market segment. In July, we announced a collaboration agreement with VCI Global to develop Powered Travel platform has a new offering for travelers in Malaysia. The platform serves as a high-tech Portable concierge offering real time recommendation for travel planning, dining, exploring and seamless booking for flight, hotel and car rentals. This also includes advanced translation function to break down language barriers.

Speaker 2

Treasure Global and VCI Global will share ownership and profit from this collaboration, Positioning the company to tap into the post pandemic travel boom expected to contribute significantly to the Malay To sum up, we are proud of the progress we have achieved over the recent Now I will pass the call to Michael,

Speaker 3

Thank you, Sam, and good morning, everyone. Today, I will review our financial results for the Q4 fiscal year ended June 30, 2023 Compared to the same period in 2022, total revenue for the fiscal year ended June 30, 2023 was 69 Compared with $79,700,000 for the fiscal year 2022. For the Q4, total revenue were $15,100,000 compared to $16,200,000 for the same period last year. Our revenue year over year were down because of our change in focus to increasing Margin business channel such as Taste. ZEC City revenue streams are historically low margin, While PACE offers a new avenue for growth with stronger margin, our goal is to focus on higher margin revenue channel, Increasing user engagement and stickiness by product, our user with new products and in the case of Taste, Product that merchants come to rely on for their business needs.

Speaker 3

Gross profit for the year 2023 was $520,000 Up from $480,000 for the fiscal year ended June 30, 2022, showing that initiative to grow gross profit have already started to work. As Sam mentioned, ZCT had over 2,600,000 registered users and over 2,000 registered merchants As of September 24, 2023, quarterly active users for the quarter ending June 30, were 378,414, while paid users were up by 4.3%. A total of 1,400,000 transactions by our registered users were transacted over the year to June 30, 2023. Our net loss of approximately $1,000,000 for the fiscal year 2023 remained the same compared to fiscal year 2022. As of June 30, 2023, our cash balance was approximately $4,600,000 compared to a cash balance of approximately 1,800,000 as of June 30, 2020.

Speaker 3

Active user retention rate was up 2 80% year over year And 41% of paid users transacted 3 or more times in the quarter, which is an increase of approximately 24% year over year. Importantly, the quality of ZEC Citi users has improved. Where we see paid user transactions frequency in our ZEC Citi app, We recorded approximately 1,400,000 total transaction by registered bidder in the Q4 fiscal year 2023. As we have already discussed, we are laser focused on increasing gross profit and margin. The mesh So far, are already working, and we expect this to increase going forward as we roll out pace further.

Speaker 3

Now I will turn the call back to Sam to discuss the market opportunity and growth vision.

Speaker 2

Thanks, Micah. Treasure Global has made great headway in the industry so far. Through our key product, XCT, we are now looking to the future and the next stage of delivering on our growth plan of expanding Further into the food and beverage industry in Malaysia, through Taste and Fooding as well as Southeast Asia more broadly. We are focused on increasing Through fiscal 2024, by increasing user engagement through new products and services development such as pace To generate higher profit and margin, we are at the beginning of our journey with significant growth opportunity ahead. Through the application of our proprietary technology, we can offer consumer more personalized and As we continue to grow and reflect how we analyze our customer data, we will continue to develop strategy to This concludes our prepared remarks.

Speaker 2

Now I would like to open the call for questions. Operator, please go ahead.

Operator

Thank you. The floor is now open for questions. Today's first question is coming from Maren. Please go ahead.

Speaker 4

Thank you. Good morning. I'm wondering about you mentioned during your prepared remarks, you talked a little bit about Some of the agreements you've already formulated within the food and beverage sector, and I think some of those agreements are also designed to facilitate your own expansion as those Food and beverage operators expand themselves. Can you talk a little bit about how you see that Playing out over time and whether any of those companies either Morgenfeld or another Abu Yous, Whether they've announced any expansion plans recently? Thank you.

Speaker 5

Thanks very much, Shmala, for your question. I think it's those agreements, both Morgan Fields and Abu, it's mutual benefit So both of us, we're riding on their coattails as they expand and we're helping them expand with taste, which lowers the cost of sort of signing up Additional franchisees and we get benefits from that side as well. So it's mutually beneficial As they expand and as we expand as well. And I think the other thing I would add is as more of these groups sign up via FoodLink, It also just increases the market broader market awareness of sort of taste Within the wider Malaysian Food and Beverage market. Sam, do you want to add any comments just

Speaker 2

Yes. Hi, Jeremy. So, basically for Morgan Stanley, we are stuck in Malaysia. So as you're sharing just now, so we are just staff for this year. So coming that we will continue to Especially for obvious that we are targeted for this study audit, sure that we will adopt this together, so in order that we can be We can be saying that we can digitize to the businesses and we can get more the users engagement and stickiness on the taste platform.

Speaker 5

Does that answer your question, Marla? Yes.

Speaker 4

It does. Thank you very much.

Operator

Thank you. At this time, I'd like to turn the floor back over to Mr. Samteo for closing comments.

Speaker 2

Okay. Thank you again to everyone for joining us on today's call. We are grateful to our investors for their ongoing support and

Operator

Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.

Remove Ads
Powered by Quartr
Earnings Conference Call
Treasure Global Q4 2023
00:00 / 00:00
Remove Ads