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spk00: Good day, everyone, and welcome to Treasure Global Inc.' 's first quarter of fiscal year 2024 results conference call. At this time, participants are in listen-only mode. 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.
spk04: 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 are Sam Teo, Chief Executive Officer, Michael Chan, Chief Financial Officer, and Jeremy Roberts, 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, and Section 21E of the Securities and Exchange Act of 1934, as amended concerning future events. Words such as may, should, project, expect, intend, plan, believe, 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, 2023, and subsequent filings 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. Now it is my pleasure to introduce Sam Teo, CEO of TGL. Sam, please go ahead.
spk03: Thanks Sophia and thank you everyone for joining us today on our first quarter of fiscal 2024 earnings conference call for the period ended September 30th, 2023. I'm pleased to speak to you today to provide an update on Treasure Global Business. Before covering our first quarter operational highlight, 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 will drive revenue and build value for shareholders. We have continued to prove our capability as a dynamic technology solutions company that is able to follow shift in consumer demand to ensure we are in touch with recent market trends, helping to further drive market share. Firstly, our pillar of the ZCT Act, a unique digital ecosystem that transforms and simplifies the e-payment experience for consumers, while also allowing them to earn rewards. In October, we announced the introduction of an artificial intelligent robot through acquisition of AI technology of Tencent. The robot can conduct extended-hour live commerce sessions on TikTok with users of our Zaxity app. and can demonstrate products and services in real-time on the TikTok platform. This innovative approach to marketing not only captures the attention of the TikTok community, but also creates a dynamic and immersive shopping experience for viewers. The robot can answer queries, provide product details, and offer personalized recommendations, ensuring that every customer interaction is tailored to their needs. Its ability to operate for extended hours on TikTok made 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 Zaxity, but also set new standards in the live commerce industry. TGL views TikTok live commerce as a significant opportunity to diversify our revenue stream and showcase products on Zed City in an innovative and engaging manner. TikTok's status as the world's highest traffic live commerce platform made it the ideal stage for Zed City to unveil this groundbreaking technology. With millions of FT users daily, TikTok provides an incomparable platform to showcase Zed City products and services, reaching a global audience like never before. We also recently announced the launch of a merchant AI engine for ZCT that can tailor highly personalized e-voucher deals for users. Collaborating with Boost, the regional full-spectrum fintech arm of Asiata, Treasure Global will leverage Boost's extensive network of over 600,000 merchant spending diverse industries. The AI engine will redefine ZCT's offering of e-voucher deals by creating and deploying Super Deal eVoucher directly within the ZCity app within the ZCity user community. The eVoucher deal will undergo a sophisticated personalization process, ensuring they are resigned with the specific user that is being targeted. This will drive ZCity user base growth significantly and expand its 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 standard for targeted marketing and value delivery. Furthermore, the rich data insight derived from user interaction and preferences will empower Treasure Global to further optimize its offering, driving additional revenue through targeted marketing campaigns and expanded merchant partnerships. Next, for our second period, Taste. In October, we released Taste 2.0, which is an upgrade to our transformational digital food and beverage management system. Taste provides merchants with a one-stop management and automated solution to digitalize their businesses, allowing food and beverage merchants to streamline their operations improving operational efficiency and achieving cost savings. In particular, we believe TACE provides a significant opportunity to drive further margin and profit growth for Thresher Global, which is a major focus for us. TACE will increase users' stickiness and engagement as the merchants increasingly become reliant on the system for their business needs. This upgrade is focused on increasing functionality on both the merchant and customer side. Treasure Global has been focused on expanding taste throughout Malaysia and also to new market, which we are confident 2.0 will help to do. The additional functionality will provide a complete solution offering, including merchant supply chain management and upstream purchasing, which we expect to attract merchant to the platform. It will also provide a more user-friendly interface for customers and merchants in a larger console version. Thirdly, through our strategy to become a master franchisor, Treasure Global aims to become the largest food and beverage chain without owning any physical brick and mortar outlets. Under the subsidiary name FoodLink, We will manage brand loyalty and related intellectual property through lease ownership or joint venture agreement with brands that we secure partnership with. Just last week, we announced that RB Youth, a popular Malaysian food and beverage business, under our umbrella of brands, is expanding its supply chain to distribute its best-selling curry puffs to the world's largest convenience stores. This marked a significant milestone in diversifying the group product offering channels and extending its distribution reach. The first phase of expansion will focus on supplying the high-selling khalifah to 250 convenience stores in Malaysia. Subsequent phase will encompass additional store locations and introduce more products, signifying notable expansion into the food and beverage market. stepping into a new revenue stream through the extensive level of 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 allows Treasure Global to establish synergy with our technology solution, deepening our position in the food and beverage industry in Southeast Asia. grow our taste user base as we adopt it into new restaurants. Additionally, we are securing a new revenue stream for monthly licensing fee and start-up fee. And lastly, in a complimentary move, we have unveiled a significant development this month that will help grow further into the new market of health and wellness. We announced a partnership with Malaysian leading healthcare group UCSI Hospital to promote the Malaysian Wellness Healthcare Tourism Program, Zaxity Energy. An e-commerce provider of health and wellness products are available in our Zaxity app. We spread health tourism and stem cell therapy with UCSI Hospital in the Indonesian, Hong Kong and China markets. We believe that this partnership will support additional revenue growth from new marketing and strategy alliances within the wellness tourism industry. This partnership will deliver a substantial new revenue stream from wellness healthcare tourism package and commission earned on health screening, exclusive sales, and the upselling of Enoji healthcare product and at the stem cell therapy offering that Treasure Global will earn a commission on. Treasure Global expects a projected 100% overall cross-profit growth every month from this partnership. As I have discussed above, we are consistently developing innovative products that complement our existing proprietary offerings, ZCity and Taste, as well as 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 highlight in the first quarter of 2024, which show how we are executing upon our strategy plan and further growing our user base and addressable market size. Recently, the number of Zaxity users has further grown to over 2.66 million as for November 6, 2023. In the first quarter, we successfully integrated AI technology into our Zaxity app with a user-friendly chatbot powered by our data analysis engine and chat GPT. The next-gen personalized chatbot assistant, which we have named Jojo, went live in August for Zacity users. Jojo used AI and deep learning to track user personal preferences to recommend idea promotion and products for them. This allowed Zacity to offer consumers a more personalized and targeted reward experience. The enhanced functionality is expected to drive user retention and attract new customers to further grow revenue. While at the same time, allowing merchants to capture expended data on user behavior and spending patterns. During the beta phase, we gather significant insights through 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 variable insights 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 Harmony Bagi Dunia . Under the agreement, Treasure Global will hold a 70% major stake in HPD, and Treasure Global will grant HPD exclusive rights to promote an operator city in Indonesia. The LOI marked a significant milestone of our expansion into the Indonesian market, aligning with our strategy to grow internationally with innovative local partners. The venture will provide treasure global and its propriety at glass city, with access to an extensive network of 200 merchants and data of 5 million users within the several industries in Indonesia. The Indonesian market has a substantial internet user base of 230 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 AI-powered travel platform as a new offering for travelers in Malaysia. Treasure Global, MVCI 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 Malaysian digital economy by 2025. The offering will provide a high-tech portable concierge that can suggest real-time recommendations for travel planning, dining, exploring, and seamless booking for flights, hotels, and car rentals. It also offers advanced translation functions to break down language barriers. During the quarter, Treasure Global signed an agreement with the Malaysia Retail Chain Association for TASTE to become its exclusive partner as the recommended digital food and beverage management solution to its members in Malaysia. TASTE is now the MRCA preferred food and beverage system of choice, and it is recommended to its members to subscribe as taste merchants. The MRCA has over 500 merchant members across Malaysia, representing more than 40 outlets. Our second proprietary solution, which we were proud to launch during fiscal 2023. Taste provides an opportunity for treasured global to generate higher gross margin through increasing user engagement and stickiness. Taste is a product that merchants have come to rely on for their business needs, making them less likely to stop using Taste. Taste continues to receive positive feedback from users, as well as growing the number of merchants and users. In particular, observational feedback suggests that Merchant who have adopted TACE has seen an increase in transaction and basket value, as well as an increase in user retention and stickiness. TACE continue to enhance user engagement on the platform, achieving remarkable milestone in the current quarter. TACE have achieved a notable 1.5 times increase in the cross-merchandise value or GNV and continue to have a two-time growth in total transaction and 2.5 times increase in monthly transacted users. This showcases the platform's sustained success in driving both user activity, transaction volume, and GMV. Next, we have also continued to secure several partnerships during the first quarter, which are centered to our growth and strategy marketing strategy. In July, we announced a partnership with the 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 the youth and university students. For the program, Z-City offers a package of living essential e-vouchers on the air for items such as petrol, food, and bills. The initiative demonstrated Zacity's leading digital ecosystem and attracted new users while also supporting this important social program. And finally, in September, we collaborated with the Borderland Music Festival in Sarawak to offer the first cashless and ticketing platform, Powered Music Festival in Malaysia, powered through the Zacity app. Treasure Global also charged fees for each ticket sold. providing a new revenue generation opportunity for the company. As a result of the festival, Jazz City received significant exposure during the event as a leader in ticketing solution as well as penetrating the new market of Borneo. To sum up, we are pleased with the progress we have made recently 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.
spk01: Thank you, Sam, and good morning, everyone. Today, I will review our financial results for the first quarter of fiscal year 2024 ended September 30th. 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 PACE. While Zaxity revenue streams are historically low margin, we are focused on growing taste, which as Sam has explained, 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 user with new products. And in the case of taste, a product that merchants 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 initiative 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, ZCT has over 2.66 million registered users and over 2,026 registered merchants as of November 6, 2023. Quarterly active users for the quarter ending September 30, 2023 were 187,180 while paid users were up by 4.7%. A total of 1.33 million transactions were transacted by our registered user over the current quarter and quarter to date of fiscal year 2024, with paid users 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 further improvement going forward as we continue to roll out PACE and other revenue-generating initiatives. Now, I will turn the call back to Sam to highlight our growth strategy. Thanks, Michael.
spk02: Treasure Global is pleased with the progress we have achieved over the recent quarter to grow our business domestically. We are now focused on further expansion, looking at executing on the next stage of our growth plan of moving into Indonesia and Southeast Asia more broadly. As I have discussed, we have taken several steps to develop new products to further expand our addressable market segment, as well as enter new markets altogether. Travel and health and wellness are examples of sectors that we have recently launched partnership ventures into. Our domestic market of Malaysia has a growing population and solid near-term economic growth outlook. Our broader expansion opportunities are significant, which include entry into other Southeast Asian markets such as Indonesia, Thailand, Vietnam, and Japan, with much larger populations and similar demographics. particularly Indonesia, which we have already made headway into penetrating, has 10 times the population of Malaysia. Treasure Global continues to develop innovative offerings to complement our core platform, which have cemented Treasure Global as a leader in the AI-driven e-commerce space. We are also focused on growing our gross profit through fiscal 2024 and increasing user engagement through new products and services development, which we are confident will generate higher profit and margin. 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 conference to close the line. Thank you and have a great day.
spk00: Thank you, Sal. Ladies and gentlemen, thank you for joining us today. I will now close the lines.
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