Treasure Global Inc (TGL) 2023 Q2 法說會逐字稿

Good day, everyone, and welcome to Treasures Global, Inc. Second Quarter Fiscal Year 2023 Conference Call. At this time, participate mode. A question-and-answer session will follow management's remarks. This conference call is being recorded. A replay of today's call will be available on the Investor Relations section of TGI's website and will remain posted there for the next 30 days.

I will now hand the call over to Allison Sauce, Investor Relations for introductions and the reading of the safe harbor statement. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to Treasure Global's Second Quarter Fiscal Year 2023 Earnings Conference Call. With us on today's call are Sam Pao, Chief Executive Officer; and (inaudible) 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, including with respect to the company's recent IPO and the anticipated use of net proceeds as well as concerning future events. Words such as may, could, projects, expects, intend, plan, believes, anticipates, bots, estimates and variations of such words and similar expressions are intended to identify forward-looking statements. 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 registration statement and final perspectives for the company's initial public offering filed with the SEC. Copies of these documents 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. Now it is my pleasure to introduce Sam Teo, Chief Executive Officer of TDI. Sam, please go ahead.

Thanks, Alison, and thank you all for joining us today. I would like to begin by reviewing our second quarter of fiscal year 2023 highlights, followed by an update on the subsequent months and our 2023 outlook. TGI Chief Financial Officer, (inaudible) Chang, will then review the highlights of our second quarter financial results. Following that, we will be happy to take your questions.

TGI continues to evolve as an innovative online to off-line e-commerce platform, providing seamless technology-enabled solutions for lifestyle. We are developing a portfolio of digital platform for use throughout the Southeast Asia region and Japan. And we are more than just a payment vehicle with our facilitating a diverse rate of lifestyle function. Our products bring together the work of online e-commerce with off-line physical retailer, increasing convenience and offering instant rebate and asset cashback programs.

During the second quarter of fiscal year 2023, we were pleased to report total revenue of USD 20.4 million, improved gross profit up 68% year-over-year and strong active user retention rate up 98.1%. We were very proud to announce in December the TAZTE our innovative digital food and beverage management system was now ready and available. TAZTE is the first product as part of our solution strategy and we will modernize the F&B industry in Malaysia by providing merchants with a one-stop automated solution to digitalize their businesses.

The F&B sector currently faces many inefficiency that we believe TAZTE will address improving operational efficiency and achieving cost savings for merchants, TAZTE offer digitalized processes, including e-menus, ordering and e-payment translation recorded with online payment or QR digital payment technology.

TAZTE smart F&B system also provides a (inaudible) that has been proven to reduce staff labor and will offer a private domain of delivery services to access multiple dedicated delivery partners. There were more than 220,000 small to medium F&B business owners in Malaysia in 2021, and the market is growing at an annual rate of 5.1% since 2015. We are aiming for TAZTE to become the market leader in automated solutions for the F&B industry.

We expect TAZTE to increase engagement and retention between users and merchants as (inaudible) gathering user data and insights. During beta testing and since our official launch, we have gate strong positive feedback from merchants on how TAZTE has helped them to improve operational efficiency and reduce costs.

TAZTE has the ability to gather important data and customer insights such as demographics, spending habits, purchase trends, allowing merchants to identify opportunity to increase sales of optimized offering. This enabled them to make smarter decisions with data and see how their business is performing from their mobile devices anyway, anytime.

TAZTE (inaudible) analytics software to attract and retain consumers through personalized data-driven engagement to generate greater profitability. Our goal is to continue increasing user engagement through new products and services development, such as TAZTE that will increase retention rate and generate better margins.

At TGI, we continuously focus on innovation and the initial vision of TAZTE available in December was just the beginning. We also have a pipeline of ASTRA features enhancement that our development team has in the world. Brand enhancements include the ability to set discount, provide redemptions and reward to customer online, remove approval of staff fashion instant with funds for customers, drive through food ordering and preordering. These features will help F&B businesses to better manage operational processes testing thereby reducing waste of resources at increasing revenue. In addition, customers will be able to benefit when using TAZTE by assessing discounted pricing in comparison to original menu prices.

Turning to our strategic partnership. TGI continued to secure diverse strategic partnership, which is key to our marketing and growth strategy. This collaboration are important, important in our market penetration, growing our user base and driving revenue. In January 2023, we signed an MOU with Boost regional full-spectrum fintech player as a continuation of our business collaboration with Boost, the new partnership will leverage on AI-based digital financing solution from Boost Credit, which offer rate of lending services such as working capital financing, invoice financing and supply chain financing to financially empower small and media and precise.

Boost credit digital financing solution will be onboarded into TGI TAZTE program, connecting TGI with a growing network of merchants and SMB provider as a potential user of our TAZTE and ZCITY platform. In addition, the partnership with increased TGI brand exposure, building awareness among F&B businesses in Malaysia.

In November 2022, we secured a partnership with iPay88 Malaysia leading payment gateway to become TGI exclusive payment gateway partner for ZCITY as well as a partner for TAZTE. iPay will provide e-commerce and retail payment solution for ZCITY not only in Malaysia but also additional Southeast Asian countries, including Indonesia, Thailand and the Philippines, supporting ZCITY future regional expansion. Important for the growth of TAZTE, IPD also power assessed its large F&B merchant to (inaudible). As part of the agreement, IPA has begun to promote as one of its exclusive collaboration partner prompting F&B merchants to start up for TAZTE as the managed software as a service solution. This partnership are key (inaudible) of TGI executing on our strategy brand to secure relevant partnerships in Southeast Asia through which we can offer solution to their members and increase our risk and commercial to use on our channels.

We have also secured strategy brand partnership to be the sole marketing and selling platform on our e-commerce marketplace, [ZESTOR]. This partnership enables ZCITY to provide our ZESTOR customer with tailored product offering while providing TGI with an additional revenue stream as a portion of product sales. The first of this type of collaboration was proration was [innogy] to help and spend who first product is available on ZESTOR.

As a strategic brand partner, ZCITY provides true promotional strategy for INNOGY product. Firstly, as promotion to assisting and growing Z member database and secondly, as a combination of traditional and innovative digital marketing. The new revenue stream from innogy and other affect partner products sold on the ZCITY app will enhance the acceleration of the TGI revenue growth and brand present as we continue to expand in Malaysia and Southeast Asia.

We also continue to look to collaborate with leading regional lifestyle brand ZCITY to further drive user acquisition and revenue growth. Our partnership will be not industry brands are another important part of our strategy (inaudible).

Now I will pass the call on to Jaylvin, who will review our financial results in greater detail.

Thank you, Sam, and good morning, everyone. Today, I will review our financial results for the second fiscal quarter ended December 31, 2022, compared to the corresponding period the year prior. Total revenue for the second quarter of fiscal year 2023 were USD 20.4 million. This is approximately USD 2 million less than total revenue for the second quarter of fiscal year 2022, which were approximately USD 22.4 million.

The decrease was mainly attributed to the resources being allocated to membership subscription that generate revenue with better margin. As Sam has mentioned, we are focused on increasing margin and gross profit. This has already begun to show in our results with gross profit for the 3 months to December 31, 2022, of USD 0.23 million compared to USD 0.14 million for the same period the prior year. This translates to the growth of 68% year-over-year.

The increase in gross profit was primarily due to an increase in the membership revenue with higher gross profit margin. Our goal is to continue increasing user engagement to new products and services, such as recently launched TAZTE that will increase retention rate and generate higher profit and margin ZCITY over 2.3 million registered users and 240,000 monthly active users as of December 31, 2022. Growth of quarterly active user year-over-year at December 31 is 8.8% higher than the prior year. Active user retention rate for the quarter to December 2022 were 98.1% higher than in the second fiscal quarter the year before.

This means that we have acquired repeat users compared to new users, showing higher level of engagement on our platform that keep them coming back. A total of 0.9 million transactions by our registered user were transacted over the second quarter of fiscal 2023, up by 28% (technical difficulty) and compared to the prior corresponding quarter for the second quarter, down by approximately USD 1.2 million from approximately USD 3.2 million for the prior year second quarter. A reduction of 36.7% year-over-year is mainly due to lower operating and other expenses.

Our operating expenses for the second fiscal quarter of USD 4.3 million were down 20.2% compared to prior corresponding period, mainly due to reduced selling expenses. Cash and cash equivalents were approximately USD 4.7 million as of December 31, 2022, compared to approximately USD 7 million as of September 30, 2022. TGI has a positive working capital of approximately USD 4.7 million as of December 31, 2022. I will now hand the call back to Sam.

Thanks, Jaylvin. To conclude, we were particularly excited for our innovative new product TAZTE as well as the progress we made in advancing our strategy priority. We anticipate TAZTE to generate revenue, which will become a significant contributor to TGI total revenue in the future and the pipeline of extra features enhancement brand to further growth TAZTE. For fiscal year 2023, TGI continues to focus on increasing user engagement and margins. The company expects to achieve these true releases of innovative new products and solutions as well as executing its regional expansion plan into Southeast Asia and Japan. with a solid balance sheet and proven infrastructure. TGI is well placed to achieve its strategic priority and further develop as a leading innovative e-commerce provider in the Southeast Asia region. This ends our prepared remarks.

Ladies and gentlemen, at this time, the management will not be taking any question and answers. I'd like to turn the call over to Sam Teo, the CEO, for closing remarks.

Thank you again for joining us for today's call. As a way we appreciate her the continued or of our investors and stakeholders.

Thank you. The conference of Treasure Global, Inc. has now concluded. Thank you for your participation. You may disconnect your lines.