Treasure Global Q2 2024 Earnings Call Transcript

Quartr
Provided by Quartr
February 15, 2024

There are 4 speakers on the call.

Operator

Good day, everyone, and welcome to Treasure Global Inc. 2nd Quarter of Fiscal Year 2024 Conference Call. At this time, all participants are in a 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.

Operator

I will now hand the call over to Erica Kaye, Vice President, Investor Relations at KCSA for instructions 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 2nd Quarter Fiscal 2024 Results Conference Call. With us on today's call are Sam Teo, Chief Executive Officer Michael Chan, Chief Financial Officer Jeremy Roberts, Independent Director. Before we begin, I would 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, intends, plans, believes, anticipates, hopes, estimates and variations of such words and similar are intended to identify forward looking statements.

Speaker 1

These statements are subject to numerous conditions, many of which are beyond the 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, 2023 and subsequent filings filed with the SEC. Copies of this document are available on the SEC's website at www dotsec.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.

Speaker 1

Sam, please go ahead.

Speaker 2

Thanks, Erica, and thank you, everyone, for joining us today on our Q2 of fiscal 2024 Earnings Conference Call for the period ended 31st December, 2023. I'm pleased to be with you today to update you on the progress that we are making through our Treasure Global Business Strategy and to provide you with our results for the quarter. Before I review some of the exciting innovation that we announced during the quarter, want to update you on some steps that we took that we believe will help Treasure Global to achieve our growth and enhance shareholder value. This action, which has centered on our ability to leverage new cutting edge artificial intelligence capability, Further, our strategy to be a leading innovator in our region create new opportunity for profitable growth. We believe this action has made us a stronger company and will lead to a new state of growth for Treasure Global.

Speaker 2

Supporting our operation growth in the Q2, we announced a public offering raising USD 4,000,000 Less fees and expenses. We used a portion of the fund to retire the remaining $2,100,000 of convertible notes. This action helped us to fortify our financial position and to optimize our capital structure, freeing up funds so that we can continue to develop new innovative product and services for customer I shift our focus to higher margin businesses. Much of Treasure Global success is built on our ability to innovate. Throughout the quarter, We announced several initiatives that utilize artificial intelligence, or AI, to enhance our product offering and to engage more meaningful with our customer.

Speaker 2

Through our use of AI, we have been able to anticipate shift in consumer demand, which has led to increases in market share for our businesses. This effort has allowed us to identify new business opportunity It allowed us to focus our growth on our higher margin product. On our last call, we announced that we have developed an AI robot to the acquisition of AI technology of Tencent and that we believe this will transform the e commerce landscape on TikTok by offering dynamic interactive shopping experience for customers across the region. This innovative approach to product marketing has been successful as it captured the attention of the TikTok community and create a unique shopping experience for Vivo by providing a platform that can answer customer query, provide product details and offer personalized recommendation. This new way of shopping was expected to not only drive increased revenue for Zancity, our e commerce subsidiary, but is set new standard in the live commerce industry.

Speaker 2

Later in the quarter, we made history by host a first event As Zechcity became the 1st business in Malaysia to conduct a live commerce session on TikTok, this well attended event Test was co hosted by human and an AI robot surpassed Internet expectation with over 6,400 viewer participating in the section. Because of the potential of this innovative technology in reshaping the way consumer interact with brand, we demonstrated our ability to Han consumer shopping experience leading to more consumer engagement and approximately 1100 purchaser. The event was significantly forward for digital shopping experience. Because of its popularity, TikTok Lycommerce provide a significant opportunity for Treasure Global to diversify our revenue stream and showcase product on ZEC City in a more innovative and engaging manner. TikTok's status at the world's highest traffic.

Speaker 2

Live Commerce platform made it the ideal stage for ZexCity to unveil our groundbreaking technology and to showcase XCT product and services. Throughout the quarter, we continue to look for a new way to reach consumer and to push the Traditional boundary of e commerce. Following the success of our first live commerce event, we hosted another event on meta platform With an AI robot equipped with advanced language capability to engage with 1,000 of viewer in multiple language, Breaking down language barrier and enhancing accessibility. This successful event led into lucrative market that are reshaping the future of E Commerce. With Malaysia E Commerce Market Projected TO Reach US20.9 billion dollars by 2029, Treasure Global is strategically positioned to play a role in this anticipated explanation growth.

Speaker 2

In the Q2, we unveiled the new Zeced City Premium Store, offering an enriched user experience with diverse package, including top plan for our strategy partner, creating a robust and diversified offering for user, powered by our cutting edge technology, The ZexCity Premium Store offer innovative features such as personalized recommendation, AI driven discount and real time transaction tracking, providing users with an unparalleled and similar shopping experience. The premium store aims to drive transaction as well as Increased gross profit for Treasure Global. We also announced the launch of 10 minutei game in ZX City 3 d World, Powered by Treasure Global AI Game Creator. We incorporated an AI powered game creator within the ZX City 3 d world so that users can customize and play the 10 game integrated mini games. This strategy move not only enhance the gaming experience for users but also position ZCT to access the rapidly growing USD 2 12,000,000,000 global gaming market by offering in game purchase and virtual goods.

Speaker 2

Our interest into gaming align with our commitment to diversifying our revenue stream. I'm proud to say that our reputation for innovation has been recognized. During the quarter, Treasure Global ZexCity received the silver trophy for best e commerce solution and marketing interactive Asia E Commerce Award 2023. The award recognized our commitment to excellence in the dynamic landscape of digital commerce. Finally, we recently announced that We have entered into strategy alliance with AIO Synergy, a pioneering IT Services Development company.

Speaker 2

Through this collaboration, we are focused on reshaping the landscape of AI by working toward the development of next generation AI solution and developing an exclusive stage of the art data center created specifically for AI application, which will serve as a hub for cutting edge AI data analytics and the creation of AI generated human experience. The initial focus of this partnership is on the Malaysian market, where both Treasure Global and AIO Synergy are committed to providing transformative AI solution to businesses across our various industry. We expect to capitalize on the Southeast Asian AI Market projected growth and leverage the region burgeoning interest and investment in AI. This collaboration not only marks A milestone for the 2 companies, but it is also a significant step toward fostering innovation and technology Accelerate in the Southeast Asian region at an opportune plan. Throughout the first half of our fiscal year twenty twenty four, We have demonstrated our commitment to developing innovative product and advancing new market opportunity through strategy partnership.

Speaker 2

We continue to make progress on our key priority, growing our addressable market and developing innovative new revenue generation opportunity. We have clearly established ourselves as leader in AI e Commerce and continue to release innovative services offering, which are increasing user engagement. I believe this opportunity has positioned Treasure Global to deliver continued growth and innovation and allowed us to pursue higher margin activity. In closing, I'm pleased with the progress that we have made on our business strategy, and I am Excited about the opportunity ahead for Chuxiao Global. We continue to prove ourselves as a leading innovator in the region, positioning us to continue add new customer and attract more partners and investor.

Speaker 2

I believe we are well positioned for the future, and we will continue to innovate and generate more profitable growth. I will now pass the call over to Michael to discuss our financial results in Greater TQ.

Speaker 3

Thank you, Sam, and good morning, everyone. Today, I will review our financial results for the Q2 of fiscal year 2024 ended December 31, 2023 compared to the same period in 2022. For the Q2, total revenue was CNY 6,700,000 compared to CNY 20,400,000 for the same period last year. Revenue were down year over year as we continue to shift our focus to growing our higher margin business channel, including CAES as well as new higher margin offerings for Zec City. As we discussed last quarter, case offering offer higher margin plus increased user engagement and stickiness by providing merchants with the product that they come to rely on for their business needs.

Speaker 3

As Sam mentioned, We are also focused on growing our ZEC Cities products that through our utilization of AI lead to increased revenue at higher margins. We believe this action would translate into increased revenue and higher margin for the company in the long term. Gross profit for the Q2 of fiscal 2024 was approximately $346,000 up from 234,000 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 $1,200,000 for the Q2 of fiscal year 2024 compared to approximately $2,000,000 in the Q2 of fiscal year 2023. As of December 31, 2023, our cash balance was approximately CNY1,200,000 compared to a cash balance of approximately $4,700,000 as of December 31, 2022.

Speaker 3

As Sam mentioned, Zeng City have over 2,680,000 registered user and over 2027 Registered Merchant as of December 31, 2023. Quarterly active user for the quarter ending December 31, 2023 were 156,979, while paid users were down by 64%. A total of 500,000 transactions were transacted by our registered user over the current quarter. As we have mentioned, we remain laser focused on increasing gross profit and margins. The measures we have introduced so far are already working, and we expect further improvement going forward.

Speaker 3

And we continue to expand taste and add Now I will turn the call back to Sam to highlight our growth strategy.

Speaker 2

Thanks, Michael. I'm excited about the opportunity ahead for Treasure Global. We have made significant progress on our business strategy and remain a leading innovator in the region. The success our growth initiative has allowed us to add new customer and attract new partner and investor who support our business. We raised funds and retired our convertibles, putting us on some footing for the future.

Speaker 2

I believe we are well positioned for the future and remain achieving profitable growth. As part of this focus, over the last 5 months, you have seen us intentionally move away from our lower margin solution like our eVoucher products, while this naturally lead us to a decrease in growth of in registered user an active user. This move strategically allowed us to reserve more working capital so that we can invest in developing our taste, Smart Food and Beverage System, our one stop solution for food and beverage outlet and in our Zest City solution that utilize AI, allowing us to leverage this technology to capture higher margin. As we move through fiscal 2024, you will see us continue to innovate and develop new products and services with a focus on solution that will generate more profitable growth. Thank you again to everyone for joining us

Operator

Thank you for joining today. I will now close the line.

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Key Takeaways

  • Treasure Global completed a $4.0 million public offering and used part of the proceeds to retire $2.1 million of convertible notes, strengthening the balance sheet and optimizing capital structure.
  • During Q2, the company rolled out a series of AI-driven e-commerce initiatives, including an AI shopping robot and personalized product recommendations to anticipate consumer demand and boost market share.
  • ZecCity hosted Malaysia’s first AI-powered live commerce session on TikTok, attracting over 6,400 viewers and generating approximately 1,100 purchases, followed by a multilingual event on Meta platforms.
  • Q2 revenue declined to CNY 6.7 million as the company shifted to higher-margin offerings, but gross profit increased to CNY 346,000 and net loss narrowed to $1.2 million, reflecting improved profitability metrics.
  • Treasure Global formed a strategic alliance with AIO Synergy to develop next-generation AI solutions and build an AI-focused data center aimed at serving the Southeast Asian market.
AI Generated. May Contain Errors.
Earnings Conference Call
Treasure Global Q2 2024
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