Society Pass Inc (Nasdaq: SOPA): Maxim Issues 3Q 2023 Equity Research Update; Maintains Positive Outlook on Organic Growth & M&A
NEW YORK, Nov. 22, 2023 (GLOBE NEWSWIRE) -- Society Pass Inc. (Nasdaq: SOPA) (“SoPa” or the “Company”), Southeast Asia’s (SEA) next generation, data-driven, loyalty, fintech and e-commerce ecosystem announces that Maxim Group LLC (“Maxim”) has issued equity research update.
Click Here (on Society Pass website) or Here (on Maxim website) to view the full Maxim Equity Research Report.
Summary Points:
• Valuation: SOPA trades at an EV/revenue multiple of 0.1x Maxim’s 2024 revenue estimate vs. the peer average of 2.4x. Maxim’s target valuation equates to 1.3x 2024 revenue estimate. Maxim’s positive outlook is supported by the attractive SE Asian markets and opportunities to consolidate smaller companies.
• 3rd Quarter 2023 Results Beat Estimates: 3Q 2023 results showed revenues of $2.3M, up from $2.1M in the prior year quarter and $2.2M in 2Q 2022. Revenue was inline with our estimate of $2.3M. Digital marketing accounted for 79% of quarterly revenue at $1.8M, followed by NusaTrip online ticketing and reservation at $0.4M (17% of revenue) and Leflair, online goods at $0.1M (4% of revenue). 3Q23 adjusted EBITDA loss of ($2.6M) was narrower than our estimate of ($2.9M) and consensus of ($3.4M) and improved from a loss of ($7.1M) in the prior year quarter. The restructuring of several businesses is expected to improve revenue and profitability and is focused on the relatively higher margin segments. Operating expenses were down 55% year on year.
• Outlook: Maxim believes many of the businesses can be expanded geographically. Maxim also has not factored in any contributions from Society Points, which launched in June 2023 and could provide upside if it gains traction, given it should be a relatively high and potentially its highest margin segment. Maxim expects narrower EBITDA losses in 2023 and 2024 due to cost-cutting, restructuring, and higher margins from mix shift and launch of loyalty, online travel, and social media segments. For 2024, Maxim lowers revenue target to $12.9M up 45%, y/y from $44.3M, and narrow our 2024 adjusted EBITDA loss to ($3.1M), from ($3.6M). Maxim projects adjusted EBITDA improving to breakeven in 4Q24. M&A is a big focus of management's strategy.
• Balance Sheet: The company ended 3Q23 with unrestricted cash of $8.2M (close to the entire market cap of $9M), down from $10.8M at the end of 2Q23, and immaterial amount of debt. 3Q23 cash flow from operations was an outflow of ($2.9M). In October, SOPA entered into a $40M equity line of credit. With expense reduction plans and newer businesses along with the launch of the Loyalty program, Maxim expects the cash burn to decline and that current levels of cash should be sufficient to fund organic growth through 2024.
About Society Pass Inc.
Founded in 2018 as a data-driven loyalty, fintech and e-commerce ecosystem in the fast-growing markets of Vietnam, Indonesia, Philippines, Singapore and Thailand, which account for more than 80% of the SEA population, and with offices located in Bangkok, Ho Chi Minh City, Jakarta, Manila, and Singapore, Society Pass Incorporated (Nasdaq: SOPA) is an acquisition-focused holding company operating 5 interconnected verticals (loyalty, digital media, travel, telecoms, and lifestyle), which seamlessly connects millions of registered consumers and hundreds of thousands of registered merchants/brands across multiple product and service categories throughout SEA.
Society Pass completed an initial public offering and began trading on the Nasdaq under the ticker SOPA in November 2021.
SoPa acquires fast growing e-commerce companies and expands its user base across a robust product and service ecosystem. SoPa integrates these complementary businesses through its signature Society Pass fintech platform and circulation of its universal loyalty points or Society Points, which has entered beta testing and is expected to launch broadly at the beginning of 2023. Society Pass loyalty program members earn and redeem Society Points and receive personalised promotions based on SoPa’s data capabilities and understanding of consumer shopping behaviour. SoPa has amassed more than 3.7 million registered consumers and over 650,000 registered merchants and brands. It has invested 2+ years building proprietary IT architecture to effectively scale and support its consumers, merchants, and acquisitions.
Society Pass leverages technology to tailor a more personalised experience for customers in the purchase journey and to transform the entire retail value chain in SEA. SoPa operates Thoughtful Media Group, a Thailand-based, a social commerce-focused, premium digital video multi-platform network; NusaTrip, a leading Indonesia-based Online Travel Agency; VLeisure, Vietnam’s leading provider of hotel management and payment solutions; Gorilla Global, a Singapore-based, mobile network operator; Leflair.com, Vietnam’s leading lifestyle e-commerce platform.
For more information on Society Pass, please visit:
Website at https://www.thesocietypass.com or
LinkedIn at https://www.linkedin.com/company/societypass or
Facebook at https://www.facebook.com/thesocietypass or
Twitter at https://twitter.com/society_pass or
Instagram at https://www.instagram.com/societypass/.
Cautionary Note Concerning Forward-Looking Statements
This press release may include “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact included in this press release are forward-looking statements. When used in this press release, words such as “anticipate”, “believe”, “estimate”, “expect”, “intend” and similar expressions, as they relate to us or our management team, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company’s management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in the Company’s filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are qualified in their entirety by this paragraph. Forward-looking 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 registration statement and prospectus relating to the Company’s initial public offering filed with the SEC. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.
Media Contact:
Rokas Sidlauskas
Chief Marketing Officer
rokas@thesocietypass.com
