Company Overview
Treasure Global Inc. (TGL) is a leading technology solutions provider that is revolutionizing the e-commerce and fintech landscape in Southeast Asia. With its innovative ZCITY platform, the company has established a unique position in the rapidly growing digital economy, leveraging cutting-edge artificial intelligence (AI) and data-driven technologies to deliver exceptional customer experiences and drive sustainable growth.
Treasure Global Inc. (TGL) was incorporated on March 20, 2020, under the laws of the State of Delaware as a holding company. Its primary asset is the wholly-owned subsidiary, ZCity Sdn. Bhd. (ZCITY), which was originally established under Malaysian law on June 6, 2017. ZCITY, formerly known as Gem Reward Sdn. Bhd., became a 100% subsidiary of TGL through a reverse recapitalization completed on March 11, 2021, via a Share Swap Agreement.
Product and Market Expansion
The company’s flagship product, the ZCITY app, was successfully launched in Malaysia in June 2020. It has since become a hub for seamless online-to-offline (O2O) shopping, offering users a comprehensive suite of features that include instant rebates, affiliate cashback programs, and a secure e-payment solution. In April 2023, TGL expanded its operations by acquiring 100% equity interest in Foodlink Global Sdn. Bhd. and its subsidiaries, which were engaged in sub-licensing restaurant branding and selling/trading of food and beverage products. However, due to recurring losses, TGL made the strategic decision to dispose of Foodlink and its subsidiaries in May 2024.
Strategic Pivot and Financial Performance
Treasure Global’s strategic pivot towards higher-margin business models and the deliberate scaling down of low-margin operations has been a key driver of the company’s recent success. This shift was necessitated by various challenges, including recurring losses from operations, a decline in active users on the ZCITY platform, and the need to optimize its product offerings and cost structure. As part of this strategy, the company has eliminated lower-margin products and reduced spending on customer rewards and marketing campaigns to enhance cost-effectiveness and profitability. In the first quarter of fiscal year 2025, the company reported revenue of $207,371, a significant decrease from the $13.46 million recorded in the prior year’s quarter. However, this strategic shift has led to a notable 6% improvement in gross profit to $172,172, with the gross profit margin soaring to an impressive 83.0% compared to 1.2% in the previous year’s quarter.
Innovation and Partnerships
The company’s relentless focus on innovation has been a hallmark of its growth strategy. Treasure Global has established a state-of-the-art data center dedicated to AI applications, positioning itself as a key player in the rapidly evolving Southeast Asian digital economy. The company’s recent partnership with Cogia GmbH and Credilab Sdn. Bhd. to integrate secured messaging, digital asset wallet, and micro-financing solutions into the ZCITY Super App further underscores its commitment to delivering cutting-edge technology solutions to its customers.
In a significant move, Treasure Global has also secured the exclusive partnership to provide an AI blockchain wallet on the Telegram platform, strengthening its competitive position in the blockchain market. This strategic alliance is expected to unlock promising new business opportunities and drive the company’s expansion into the rapidly growing global crypto wallet market, projected to reach a staggering $135 billion by 2030.
Leadership and Management
Treasure Global’s leadership team has undergone a strategic transformation, with the appointments of Mr. Henry Chai as Chief Operating Officer and Ms. Sook Lee Chin as Chief Financial Officer. This new management structure is poised to guide the company through its next phase of growth, leveraging their extensive expertise in corporate strategy, business transformation, and financial oversight.
Resilience and Future Outlook
Despite the challenges posed by the global pandemic and macroeconomic uncertainties, Treasure Global has demonstrated its resilience and adaptability. The company’s strategic pivot towards higher-margin business models, coupled with its unwavering focus on innovation and partnership development, has positioned it for long-term success in the dynamic Southeast Asian e-commerce and fintech landscape.
As Treasure Global continues to execute its strategic initiatives and explore new avenues for growth, investors should closely monitor the company’s progress in capturing the vast opportunities presented by the rapidly expanding digital economy in the region. With its innovative technology solutions, strong leadership team, and compelling market positioning, Treasure Global appears poised to cement its status as a leading player in the e-commerce and fintech sectors in Southeast Asia.
Financials
Treasure Global Inc. reported revenue of $207,371 in the first quarter of fiscal year 2025, a significant decrease from the $13.46 million recorded in the prior year’s quarter. However, the company’s gross profit improved by 6% to $172,172, with the gross profit margin increasing to 83.0% compared to 1.2% in the previous year’s quarter.
For the most recent fiscal year, Treasure Global Inc. reported revenue of $22.07 million, with a net income of -$6.59 million. The company’s operating cash flow (OCF) stood at -$4.71 million, while free cash flow (FCF) was -$4.92 million.
In the most recent quarter, the company’s net income was -$950,707, with an operating cash flow of -$976,319 and free cash flow of -$976,319. The year-over-year revenue decline of 98.5% was primarily attributed to the company’s strategic decision to streamline its product line and eliminate lower-margin offerings like e-vouchers, as part of its shift towards higher-margin business models and reduction in customer incentives and marketing spending.
Liquidity
As of the most recent reporting period, Treasure Global Inc. had a debt-to-equity ratio of 0.0045 and a cash balance of $72,560. The company’s current ratio stood at 1.45, while its quick ratio was 1.43, indicating a relatively stable short-term liquidity position.
Product Segments and Performance
Treasure Global Inc. operates primarily in the payment processing and e-commerce segment through its ZCITY platform. For the three months ended September 30, 2024, the company’s product and loyalty program revenue, which includes sales of e-vouchers, healthcare products, and other products through the ZCITY platform, decreased by 99.4% to $82,000 compared to the same period in 2023. This decline was primarily driven by the strategic decision to eliminate lower-margin products and reduce customer incentives.
Transaction revenue, consisting of fees charged to merchants for participating in the ZCITY platform, increased by 113.2% to $43,080 during the same period. This growth was attributed to TGL’s partnership with Credilab Sdn. Bhd. (CLSB), a third-party credit services provider.
Member subscription revenue, which includes fees charged for TGL’s Zmember loyalty program, decreased by 52.3% to $82,550 for the three months ended September 30, 2024, primarily due to a slowdown in acquiring new customers for the program.
Geographic Markets
Treasure Global Inc. operates primarily in Malaysia through its ZCITY platform, capitalizing on the growing Malaysian e-commerce market, which is projected to reach $20.93 billion by 2029.
Recent Developments and Future Outlook
Treasure Global Inc. has successfully filed and initiated an ATM (at-the-market) offering of up to $2.99 million, which will provide necessary capital to drive business initiatives and growth strategy. The company’s ZCITY Premium Store has exceeded sales expectations since its inception, selling over 6,000 Bill Saver Bonanza Packs in just 4 months, significantly contributing to gross profit growth.
TGL has also launched 10 mini games integrated with their AI Game Creator in ZCITY’s 3D World, positioning them to access the rapidly growing global gaming market projected to reach $212 billion in revenue by 2026. As of March 31, 2024, ZCITY had over 2.69 million registered users and over 2,027 registered merchants, with 41,455 quarterly active users and 0.19 million transactions in the quarter ended March 31, 2024.
The Southeast Asia AI market is expected to grow at an annual rate of 17.83% by 2030, presenting significant opportunities for Treasure Global Inc.’s AI-driven initiatives. Additionally, the company’s expansion into the blockchain wallet market aligns with the projected growth of the global crypto wallet market.
As Treasure Global Inc. continues to execute its strategic initiatives and capitalize on emerging market trends, it remains well-positioned to drive long-term growth and value creation in the dynamic Southeast Asian e-commerce and fintech landscape.
Disclaimer: This article is for informational purposes only. It does not constitute financial, legal, or other types of advice. While every effort has been made to ensure the accuracy of the information presented here, the author and the publisher do not make any guarantees about the completeness, reliability, and accuracy of this information.