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spk03: Good day, everyone, and welcome to Global Treasurer Inc.' 's fourth quarter and fiscal year 2023 conference call. At this time, participants are on a listen-only 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 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 for KCSA, for introductions and the reading of the Safe Harbor Statement. Please go ahead.
spk01: Thank you, Operator. Good morning, everyone, and welcome to Treasure Global's fourth 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, 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 factor section of the company's Form 10-K for the year ended June 30, 2022, filed with the FCC. Copies of this document are available on the FCC's website at www.scc.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 its call, except as required by law. Now it is my pleasure to introduce Sam Teo, CEO of TGL. Sam, please go ahead.
spk06: Thanks, Sophia. And thank you, everyone, for joining us today on our fourth quarter and fiscal year 2023 Earnings Conference Call for the period ended June 30, 2023. I'm happy to be here to provide an update on our business. Firstly, I will retract Treasure Global and our main growth driver, followed by a review of specific highlights from the fourth quarter and subsequent to the quarter end. I will then repeat our vision for growth and how we have the global to achieve this. Our Chief Financial Officer, Michael Chang, will then discuss the financial highlights for our fourth quarter and fiscal year financial results. Following that, we will be happy to answer your questions. Treasure Global, or 3GL, is a Malaysian solution developing innovative technology platform. We have a strong track record of developing cutting-edge solution for our customer base. And through our proprietary technology platform, we developed two primary technology solutions, Zacity and Taste. They are providing online e-commerce with offline physical retailers. Given our experience and success within the food and beverage industry, we established a third growth driver to this year as a food and beverage master franchisor, which we launched as Foodlink. We believe this is an opportunity to leverage our platform to reach a more extensive consumer base and are able to introduce new products and innovations which we expect to try our growth in the year ahead. Before discussing the various new growth opportunities that we are now advancing, I will write the advancements that we made with Zach City and Case in fiscal 2023 and in the 4th quarter, which have expanded our market footprint and helped grow our reach to new markets and customer segments. Our first proprietary product, the Zach City app, is a They simplify lifestyle needs with instant rebates and affiliate cashback programs. Zaxity serves both consumers and merchants to maximize value creation and enhance the shopping experience. To date, we have been highly successful in recruiting a large and growing number of users, gaining more than 2.6 million registered users and over 2,000 merchants. We have achieved this growth through innovative enhancements and strategy partnership. In the fourth quarter, we integrated AI technology into our ZCity app with a user-friendly chatbot powered by GizEngine and ChartGPT, allowing us to offer consumers a more personalized and targeted reward experience. Our next change, personalized chatbot assistant, which we have named Jojo, went live in August for ZCity users. and is serving as a key market differentiator, positioning Treasure Global as a leader in the AI-driven e-commerce space. Jojo uses AI and deep learning to track user personal preferences to recommend idea promotion and products for them. The active functionality is expected to enhance user retention and attract new customers to drive revenue growth, as well as
spk05: spending pattern.
spk06: We secured a number of partnerships during the four quarters which continue to be key to our strategy. First, TrashShare Global secured an exclusive partnership with Enogy, a health and wellness brand, to expand the range of products available on its e-commerce marketplace, Zestock, which is housed within the Zest City app. This partnership opened a new market targeting the large and growing health and wellness industry. The new revenue stream for Inochi and other affiliate partner products sold on the Z-City Act is contributing to Treasure global revenue growth. Margin expansion and plan present as we continue to expand throughout Malaysia in July. Treasure Global collaborates with the Malaysian Ministry of Domestic Trade and cost of living for the launch of the Package Rama program, which offers various financial saving initiatives, reducing the cost of living for lower-income groups, including university students. As part of this, Z-City offers a comprehensive package of living essential e-vouchers on the app for items such as petrol, food, and meals. The initiative showcased ZCity cutting-edge digital ecosystem and attract new users, also supporting this important social program. In September, we collaborated with the Borderland Music Festival to provide the first cashless and ticketing platform, Power Music Festival in Malaysia, powered by the ZCity app. ZCity gained significant exposure during the event ticketing solution as well as penetrating the new market of Sarawak. Treasure Grover also charges fees for each ticket sold, providing a new revenue generation opportunity for the company. Moving now to Taste, our second proprietary solution which we were proud to launch during fiscal year. Taste is a transformational digital food and beverage management system providing merchants with a one-stop management and automated solution to digitalize their businesses. Haste allows food and beverage merchants to streamline their operations, improving operation efficiency and saving. While just today's revenue streams are historically low-margin, Haste offers an opportunity to generate higher gross margin for Thresher Global through increasing user engagement and stickiness. TASTE is a product that merchants have come to rely on for their business needs to stop using TASTE. TASTE currently offers digital live processes, including e-menus, ordering, e-payment, transaction recording with online payment or QR digital payment technology. TASTE's Smart Food and Barrier System also provides a device-less Q-System proven to reduce staff labor and will offer a private domain of delivery services to access multiple dedicated delivery partners. 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 functionality on both the merchant and customer side. The additional functionality 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 customers and merchants in a larger console version. Since its launch, Taste has received positive feedback from users as well as very growing the number of merchants and users. For the market source feedback, such as the merchants who have adopted Taste in transaction and basket value, 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 Retail Chain Association for Taste to become the exclusive partner as the recommended digital food and beverage management solution to its member in Malaysia. Now, Taste is the MRCA preferred food and beverage system and it is recommended to its member to subscribe as Taste Merchant.
spk05: The MRCA has over more than 40,000 outlets.
spk06: Another key partnership, which has helped drive the growth of Treasure's global net worth and food and beverage provider in our partnership with Boost Credit, a leading regional full-spectrum fintech player. We signed a memorandum of understanding with Boost to leverage their digital financing solution, which includes working capital financing, invoice financing, and supply chain financing to further strengthen the taste program. As we expanded further into the food and beverage industry through development of taste, we identified a significant opportunity which now formed the third growth driver for Treasure Global. We made the strategy decision to become a master franchisor in Southeast Asia for popular restaurant chains while also recruiting them to our taste platform. Under the subsidiary name Foodlink that Terracia Global had established to house food and beverage master franchisor 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 Trashier Global and to become the larger food and beverage chain without owning any physical bricks and mortar outlets. This unique business model allows Trashier 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 base as we adopt it into new restaurant, Additionally, we are securing a new revenue stream for monthly licensing fee and startup 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 components of supply chain to better understand, improve and innovate our current solution and future solutions. We have already made progress in our execution, signing licensing agreement with South Asia Brand. In May, we signed a licensing agreement with Morganfield, a restaurant chain specializing in comfort food and American-style barbecue. The agreement granted Treasure Global an exclusive worldwide license to grant sub-licensee to use Morganfield's trademark for the restaurant business. Mogollonville will also adopt taste in the nine franchisees in Malaysia, China, and Singapore, accelerating the rollout of taste across the region. Not only will taste will be adopted into their existing nine franchisees, have the opportunity to grant sub-licensee to third party to open additional Mogollonville restaurant in the region that will also adopt taste. Most recently, We secure a license agreement with fast-growing Malaysian food and beverage brand, RBA Youths, granting Treasure Global the exclusive sub-licensee to third party to use its trademarks under the agreement. Treasure Global applies to grant sub-licensee to any third party to open additional RBA Youths businesses in Malaysia. As the master franchisor, Treasure Global will manage brand and raw material supply. In addition, all the RBU's food and beverage outlets will be optically to adopt taste across all their businesses. Again, Treasure Global will gain additional revenue stream for monthly licensing fees, start-up fees for new locations and management. RBU's food and beverage group of businesses including the high-selling Kali Path from Grab and Go food cart, as well as the Abayus Warung Street food kiosk, Abayus Cafe restaurant, and the Abayus Mart B2C online e-commerce service. The chain currently has 12 outlets operating across Malaysia, with plans to open 35 outlets by the end of 2023 and 300 outlets to be opened over the next five years in the country. Are they used brand to expand the Southeast Asian market in the future?
spk05: Clearly, Treasure Global has significant opportunities for retail and food links, and we are focused on increasing gross margins from the ongoing development of each of these business channels.
spk06: To talk about our significant market opportunities both in Malaysia specifically and more broadly in Southeast Asia, particularly Indonesia. 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's GDP growth is expected to maintain an average annual rate of 4.5% for the next five 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. Importantly, Malaysia has a very high rate of digital connectivity. We have a population of 3,000 in Malaysia, of which 94% are internet users. Looking at our registered users, we have only penetrated 7.3% of our addressable market domestically for Zaxity, which is made up of digitally connected consumers. In the F&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 CASE is an automated solution for the sector. The expansion opportunities, which include entry into other Southeast Asian markets, which have much larger populations and similar demographics, are significant. In our roadmap, we plan to tap into our neighbouring countries such as Indonesia, Thailand, Vietnam, 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-technical and multi-ethnic, that 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 signed to form an e-commerce venture in Indonesia with Harmony Pagi Dunia, HPD. Treasure Global will hold a 70% major stake in HPD and Treasure Global will grant HPD exclusive right to promote and operate its proprietary app Zaxxit. The letter of intent marked the beginning of the company's expansion into the Indonesian market, aligning with our strategy to grow internationally with innovative local partners. The venture will provide treasured global and its proprietary access with a network of 200,000 merchants and data of 5 million users within the serverless industry in Indonesia. The Indonesian market has a substantial internet user base of 213 million out of a population of 276 million from opportunity for expansion of Treasure Global Doctor addressable market. We have also made a straight in developing new product to further expand our addressable market segment. In July, we announced a collaboration agreement with VCI Global to develop Power Travel Platform as a new offering for travelers in Malaysia. The platform serves as a high-tech portable concierge app offering real-time recommendations for travel planning, dining, exploring, and seamless booking for flights, hotels, and car rentals. It also includes advanced translation functions to break down language barriers. 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 economy by 2025.
spk05: To sum up, we are proud of the progress we have achieved over the recent years, and we will continue to improve our business further.
spk06: Now, I will pass the call to Michael. who will review our financial results in greater detail.
spk04: Thank you, Sam, and good morning, everyone. Today, I will review our financial results for the fourth quarter and fiscal year ended June 30, 2023, compared to the same period in 2022. Total revenue for the fiscal year ended June 30, 2023 was $69,000. compared with $79.7 million for the fiscal year 2022. For the fourth quarter, total revenue was $15.1 million compared to $16.2 million for the same period last year. Our revenue year-over-year was down because of our change in focus to increasing margin business channels, such as PACE. ZCT revenue streams are historically low margins. while TAFE offers a new avenue for growth with stronger margins. Our goal is to focus on higher margin revenue channels, increasing user engagement and stickiness by our users with new products, and in the case of TAFE, a product that merchants come to rely on for their business needs. Gross profit for the year 2023 was $0.52 million. up from $0.48 million for the fiscal year ended June 30, 2022, showing that initiatives to grow gross profits have already started to work. As Sam mentioned, ZCT had over 2.6 million registered users and over 2,000 registered merchants as of September 24, 2023. Quarterly active users for the quarter ending June 30th were 378,414, while paid users were up by 4.3%. A total of 1.4 million transactions by our registered users were transacted over the years to June 30, 2023. Our net loss of approximately for the fiscal year 2023 remained the same compared to fiscal year 2022. As of June 30, 2023, our cash balance was approximately $4.6 million compared to a cash balance of approximately $1.8 million as of June 30, 2020. Active user retention rate was up 280% year-over-year, and 41% of paid users transacted three or more times in a quarter, which is an increase of approximately 24% year-over-year. Importantly, the quality of ZCT users has improved, where we see paid users transaction frequency in our ZCT app. We recorded approximately 1.4 million total transactions by registered users in the fourth quarter fiscal year 2023. As we have already discussed, we are laser focused on increasing gross profit and margin. The meshes so far are already working and we expect this to increase going forward as we roll out case further. Now, I'll turn the call back to Sam to discuss the market opportunity and growth vision.
spk05: Thanks, Michael. Thresher Global has made great headway in English so far.
spk06: Through our key product, Zest City, we are now looking to the future and the next stage of delivery on our growth plan of expanding further into the food and beverage industry in Malaysia through taste and food link 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 taste 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 consumers more personalized and As we continue to grow and refine how we analyze our customer data, we will continue to develop strategies to increase engagement and develop products and services that generate higher margins for our business. This concludes our prepared remarks. Now I would like to open the call for questions. Operator, please go ahead.
spk03: Thank you. The floor is now open for questions. If you would like to ask a question, please press star 1 on your telephone keypad at this time. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. Today's first question is coming from . Please go ahead.
spk02: Thank you. Good morning. I'm wondering about, you know, 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. I think, you know, 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, you know, how you see that playing out over time and whether any of those companies, either Morgan Fells or another Abu, Abu Yusuf, whether they've announced any expansion plans recently. Thank you.
spk00: Thanks very much, Marla, for your question. I think it's those agreements, both Morgan Fields and FAU, it's mutual benefit to 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 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 food link, it also just increases the broader market awareness of sort of taste within the wider Malaysian food and beverage market. Sam, do you want to add any comments just specifically in terms of Abayus and their expansion plans or Morganfields and their expansion plans near term?
spk06: Yeah. Hi, Jeremy. So basically for Morganfield Abayus, we are starting 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 other use that we are targeted for this is 30 hours. Sure that we will adopt taste together. So in order that we can be, we can be saying that we can digitize the businesses and we can get more users engagement is to get us on the taste platform.
spk00: Does that answer your question, Marla?
spk02: It does. Thank you very much.
spk03: Thank you. At this time, I'd like to turn the floor back over to Mr. Sam Teo for closing comments.
spk06: Thank you again to everyone for joining us on today's call. We are grateful to our investors for their ongoing support and interest in Treasure Grover. We look forward to updating you on our progress in the coming quarter. Thank you and have a great day.
spk03: 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.
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