Treasure Global Inc (TGL) 2024 Q1 法說會逐字稿

Good day, everyone, and welcome to Treasure global Inc's first quarter of fiscal year 2024 results conference call. (Operator instructions) This conference call is being recorded. 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 call over to Sophia Bashford, Senior Account Director, Investor Relations at KCSA 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 first quarter fiscal 2024 results conference call. With us on today's call, Sam Teo, Chief Executive Officer; Michael Chan, Chief Financial Officer; and Jeremy Robert, Independent Director.

Before we begin, I'd like to remind you that today's call contains certain forward-looking statements from Treasure Global's management, made within the meaning of Section 27A of the Securities Act of 1933. As amended in section 21E of the Securities and Exchange Act of 1934, as amended concerning future events.

Words such as may, should, project, expects, intends, plans, believes, anticipates, hopes, 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 Form 10-K for the year ended June 30, 2023, and subsequent filings filed with the SEC.

Copies of this document are available on 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, CEO of TGL. Sam, please go ahead.

Thank you, Sofia, and thank you, everyone, for joining us today for our first quarter of fiscal 2024 earnings conference call for the period ended September 30, 2023. I'm pleased to speak to you today to provide an update on Treasure Global business.

Before covering our first quarter operational highlights, I want to discuss some of the exciting recent innovation we have announced to our key revenue stream, as well as new market opportunity post quarter end, which we are confident we will drive revenue and build value for our shareholders.

We have continued to prove our capability as a dynamic technology solutions company that is able to follow a shift in consumer demand to ensure we are in touch with recent market trends happening to further drive market share. Firstly, our appeal after ZCITY App, a unique digital ecosystem that transform and simplify the e-payment Esperion for consumer, while also allowing them to reward.

In October, we announced the introduction of an artificial intelligent robot to acquisition of AI technology of Tencent. The robotic combat extend our last commerce session on TikTok with user of our ZCITY App. And can demonstrate products and services in real time on the TikTok platform. This innovative approach to marketing not only capture the attention of the TikTok community, but also create a dynamic and immersive shopping experience for viewers.

The robot can answer clearly, provide product details and offer personalized recommendation, ensuring that every customer interaction is tailored to their needs. It's ability to operate for extended hour on TikTok, make it a game changer in the live commerce arena, allowing for unparalleled reach and engagement. We believe this development will not only drive significant revenue growth for ZCITY, but also set new standards in the live commerce industry.

TGL with TikTok live commerce as a significant opportunity to diversify our revenue stream and showcase product on ZCITY in an innovative and engaging manner. TikTok status as the world's highest traffic live commerce platform, makes it the ideal space for ZCITY to unveil this groundbreaking technology. We have millions of active users daily, TikTok provide an incomparable platform to showcase ZCITY product as a resource.

Reaching a global audience like never before. We also recently announced the launch of a merchant AI engine for ZCITY. that can tailor highly personalized E-voucher deal for user. Collaborating this boost to regional full spectrum fintech arm of Axiata. Treasure Global will leverage boost expansive network of over 600,000 merchants spending diverse industry.

The AI engine will redefine ZCITY offering of E-voucher deal by creating and deploying super deal E-voucher [validating] within ZCITY user community. The E-voucher deal we undergo are sophisticated personalization process, ensuring the are recognized with the specific user that is being targeted.

This [ZCITY] user base grows significantly at a spend is brand present in the region while generating anticipated revenue growth. This personalization will draw from user behavior, spending pattern, preferences and transaction history setting a new center for targeted marketing and really deliberately. Furthermore, the rich data insights, the driver from user interaction and preferences will empower Treasure Global to further optimize these offerings, driving additional revenue through targeted marketing campaigns and [assisted] merchant partnerships.

Next, for our second pillar TAZTE, in October, we released TAZTE 2.0, which is an upgrade to our transformational digital food and beverage management system. TAZTE provide merchant with one-stop management and automated solution to digitalize their businesses. Allowing food and beverage mission to streamline their operations, improving operational efficiency and achieving cost savings.

In particular, we believe taste provide a significant opportunity to drive further margin and profit growth for Treasure Global, which is a major focus for us. TAZTE will increase user stickiness and engagement, as the merchants increasingly become relied on the system for their business needs. This upgrade is focused on increasing functionality from both the merchant and customer side.

Treasure Global has been focused on spending pace throughout Malaysia and also to new market, which we are confident 2.0 will have to do. The additional functionality will provide a complete solution offering, including merchant supply chain management and upstream purchasing, which we expect to attract merchants to the platform.

It will also provide a more user-friendly interface for customers and merchants in a larger console version. Probably, through our strategy to become a master franchise of Treasure global and to become the larger food and beverage chain without owning any physical brick and mortar outlet. Under the subsidiary named Foodlink, we will manage brand loyalty and related intellectual property to lease ownership or joint venture agreement with brand that we start partnership with.

Just last week, we announced the Abe Yu, a popular Malaysia food and beverage business under our umbrella of brands. Expanding its supply plan to distribute its best-selling counterpart to the world's larger convenience store. This marks a significant milestone in diversifying the group's product offering channels and expanding its distribution reach.

The first phase of expansion we are focused on supplying high salary creep up to 250 convenience store in Malaysia. Subsequent phase, we encompass additional store location and introduce more products. Signifying notable expansion into the food and beverage markets. Stepping into a new revenue stream to expansion of our convenience store.

To the brand we are acquiring into Foodlink, we will also provide food and beverage consulting, including market and product optimization as well as supply chain monetization. This unique business model, but not Treasure Global, established synergy with our technology solution, deepening our position in the food and beverage industry in Southeast Asia.

Now we be strategically grow our user base as we adopt it into new restaurant. Additionally, we are securing a new revenue stream from monthly licensing fee and the [spa update]. And lastly, these are complementary move, we are unveiled a significant development this month that will help grow further into the new market of health and wellness.

We announced a partnership with Malaysia's leading healthcare group UCSI hospital, to promote the Malaysia wellness health care horizon program, ZCITY's enogy. As E-commerce provider of health and wellness product for ZCITY at. We Spearhead helped Horizon and stem cell therapy at UCSI hospital in Indonesia, Hong Kong and China markets.

We believe that this partnership with [suffer] additional revenue growth from new marketing and strategy alliances within the wellness horizon industry. This partnership will deliver a substantial new revenue stream from wellness healthcare provision package and commission earned on health screening as cruises, sales and the upselling of enogy health care products and a potential therapy offering Treasure Global earn commission on.

Treasure Global as per the project has 100% overall gross profit growth every month from this partnership. As I have discussed above, we are consistently developing innovative products that complement our existing propriety offering, ZCITY and TAZTE. As well and opening up new market opportunities, in particular, we have cemented our leadership position in the AI driven E-commerce space. With our major business peers as well as new market opportunity, we strongly believe we are well positioned to deliver value, innovation and growth.

I would like to discuss the operational highlights in the first quarter of 2024, which show how we are executing on our strategy and further growing our user base and addressable market size. Pleasingly, the number of ZCITY user has further dropped over 2.66 million as for November 6, 2023.

In the first quarter, we successfully integrated AI technology into our ZCITY App with a user-friendly chatbot, powered up our data analysis engine and ChatGPT. The next gen personalized shopping assistant, which we have named Jojo went live in August for ZCITY user. Jojo AI and lending to check user personal preferences, recommend idea promotion and product for them.

This allows the ZCITY to offer consumer a more personalized and targeted will be experienced. The enhanced functionality is expected to drive user retention and attract new customers to further grow revenue. While at the same time, allowing merchant to capture expected data on user behavior and spending patterns.

During the beta phase, we gave us significant insight to market testing, showcasing strong user engagement and interest in the new features. This collected data will guide us in refining strategy, improving user experience and providing merchants with very good insight into user behavior and spending patterns.

During the quarter, we announced the company has signed a letter of intent to form an e-commerce venture in Indonesia with Harmoni Bagi Dunia or HBD. Under the agreement, Treasure Global will hold a 70% major stake in HBD. And Treasure Global will have grabbed HBD exclusive right, to promote an operator city in Indonesia, but LOI marked a significant milestone of our expansion into the Indonesian market, aligning with our strategy to grow internationally with innovative local partner.

The venture will provide Treasure Global and its proprietary at ZCITY with access to an extensive network of 200 merchants and data of 5 million user within the several industry in Indonesia. The Indonesian market has a substantial Internet user base of 213 million out of a population of 276 million, providing a large opportunity for growing our total addressable market.

In July, we announced a partnership agreement with VCI Global to develop a high-powered travel platform, as a new offering for traveller in Malaysia. Treasure global and VCI Global will share ownership and profit from this collaboration. Positioning the company to tap into the post pandemic travel, expected to contribution to the Beacon to the Malaysian digital economy by 2025.

The offering will provide a high-tech, portable consumer that can start just real-time recommendations for travel planning, dining, exploring and seamless booking for flight, hotel and car rental. This also offer a wide translation function to breakdown language barrier.

During the quarter, Treasure Global signed an agreement with the Malaysian retail chain association for TAZTE to become an exclusive partner, as the recommended digital food and beverage management solutions to its members in Malaysia. TAZTE is now the MRCA prefer us to beverage system of choice and is recommended to each member to subscribe as TAZTE merchants. The MRCA has over 500 merchant members across Malaysia, representing more than 40 outlets. Our second propriety solution, which we were proud to launch during fiscal 2023.

TAZTE, provide an opportunity for Treasure Global to generate higher gross margin through increasing user engagement and stickiness. TAZTE is a product that merchant has come to the rely for their business needs, making them less likely to stop using TAZTE. TAZTE continue to receive positive feedback from user as well as growing the number of merchants and users.

In particular, observational feedback suggests that merchant who have adopted TAZTE has seen an increase in transaction and basket radio, as well as an increase in user retention and stickiness. TAZTE continue to enhance user engagement on the platform, achieving remarkable milestone in the Prior quarter. TAZTE has achieved a notable 1.5 times, increase the cross-merchandise value or GMV and continue to have a 2 times growth in total transaction and 2.5 times increase in monetary transactions per user.

This showcase the platform sustained success in driving both user activity, transaction volume and GMV. Next, we have also continued to secure several partnership during the first quarter, which as to -- which are centre to our growth and marketing strategy. In July, we announced a partnership with the Ministry of domestic trade and cost of living, for the launch of the big ZCITY program, which offer various financial saving initiative reducing the cost of living for lower income group, including the youth and university students.

For the program ZCITY offer package of living essential E-voucher on the M4, either such as petrol food and beverage. The Initiative demonstrates the ZCITY leading digital ecosystem and attract a new user, while also supporting this important social progress. And finally, in September, we collaborate with Borderland Music Festival in Sarawak to offer the first cashless ticketing platform, Powerland a music festival in Malaysia.

Powered up with ZCITY executive, Treasure Global also charge for each ticket sold. Providing a new revenue generation opportunity for the company. As a result of the festival ZCITY see significant exposure during the event as a leader in ticketing solution as well as penetrating the new market of cornea.

To sum up, we are pleased with the progress as we have met with the need to progress our strategy propriety, grow our addressable market and develop innovative new revenue generation opportunity. We have established our leadership position in the area of AI e-commerce and continue to release innovative service offerings, which are increasing user engagement.

I will now pass the call over to Michael to discuss our financial results in greater detail.

Thank you, Sam, and good morning, everyone. Today I will review our financial results for the first quarter of fiscal year 2024 ended September 30, 2023, compared to the same period in 2022. For the first quarter, total revenue of $13.5 million compared to $15.6 million for the same period last year. Revenue were down year over year as we shifted our focus to growing our higher-margin business channel such as TAZTE.

While that sticky revenue stream are historically low margin, we are focused on growing pace, which Sam helps explain, offer a new avenue for growth with a stronger margin. In addition to focusing on higher margin revenue channel, we also intend to increase user engagement and stickiness by providing our users with new products. And in the case of a product, merchant come to rely on for their business needs. We believe this objective will lead to increased revenue growth for the company in the long term.

Gross profit for the first quarter of fiscal 2024 was approximately $163,000, up from $37,000 compared to the same period last year, demonstrating that the initiatives to grow gross profit that we implemented have already started to work. Our net loss of approximately $2.1 million for the first quarter of fiscal year 2024 compared to approximately $3.7 million in the first quarter of fiscal year 2023.

As of September 30, 2023, our cash balance was approximately $2.6 million compared to a cash balance of approximately $7 million as of September 30, 2022. As Sam mentioned, ZCITY has over 2.66 million registered users and over 2026 registered merchants as of November 6, 2023. Quarterly active user for the quarter ending September 30, 2023, were 187,180 while paid user were up by 4.7%.

A total of 1.33 million transaction were transacted by our registered users over the current quarter and quarter to date of fiscal year 2024, with paid user transacting three or more times in the quarter. As we have mentioned, we remain laser focused on increasing gross profit and margin. The measures we have introduced so far are already working, and we expect a further improvement going forward as we continue to roll out eight and other revenue-generating initiatives.

Now I will turn the call back to Sam to highlight our growth strategy.

Thanks, Michael. Treasure Global is pleased with the progress we have achieved over recent quarters to grow our business domestically. We are now focused on further expansion, looking at executing on the next [wish] of our growth plan of moving into Indonesia and Southeast Asia more priorly.

As I have discussed, we have taken several steps to develop new products to further expand our addressable market segments, as well as enter new markets altogether. Cyber and health and wellness are examples of sectors that we have basically launched partnership venture into. Our domestic market of Malaysia has a growing population and solid near-term economic growth outlook.

Our broader expansion opportunity are significant, which include entry into other Southeast Asian markets such as Indonesia, Thailand, Vietnam and Japan, which have much larger population and similar demographics. Particularly Indonesia, which we have already made headway into penetrating. It has 10 times the population of Malaysia.

Treasure Global continue to develop innovative offerings to complement our core platform, which has cemented Treasure Global as a leader in the AI driven E-commerce space. We are also focused on growing our gross profit to fiscal 2024 at increasing user engagement through new products and services development, which we are confident we will generate higher profit margins.

Thank you again to everyone for joining us on today's call and thank you particularly to our investors for their continued support. We look forward to providing further updates soon. This concludes our prepared remarks. I will now ask the operator to close the line. Thank you and have a great day.

Thank you, sir. Ladies and gentlemen, thank you for joining us today. I will now close the lines.