NEW YORK, Dec. 27, 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 Litchfield Hills Research (“Litchfield Hills”) has initiated equity research coverage on SOPA.
Click Here (on Society Pass website) to view the full Litchfield Hills Equity Research Report.
Summary Points:
• Investment Thesis: SOPA is a high-growth acquisitive internet services company offering advertising, travel, retail, telecom and fintech services in fast-growing SEA. Litchfield Hills forecasts positive EBITDA as SOPA shifts from its early growth strategy to a focus on profitability under its new CEO.
• SEA Countries are Young and Booming and are Hottest Economies on the Planet: SEA market is the world’s fastest growing region over the next decade for the following reasons:
1) Movement away from China
2) Young, tech savvy populations
3) Business friendly governments
• Society Pass Ecosystem: SOPA’s main subsidiaries are:
1) Thoughtful Media Group (TMG) – Bangkok – digital advertising
2) NusaTrip – Jakarta – online travel booking
3) Next Generation Retail (NGR) – Ho Chi Minh City – online retail e-commerce
4) Gorilla Mobile – Singapore – mobile telecom/e-sim services
5) Society Points – Manila – loyalty points program
• Thoughtful Media Thriving with SEA Focus: TMG provides digital advertising services to companies utilizing social media platforms. Since July 2022 acquisition for $2.1 million, TMG had just 17 employees and $5.8 million of revenue in 2021 compared to 75 employees and $6.6 million in 2023. After attaining GAAP profitability of $750k in 2022 net income, Litchfield Hills forecasts revenue of $12 million in 2024 and $18 million in 2025. At 5x 2025 revenue, it values TMG at roughly $88 million.
• NusaTrip Provides Online Travel, Customized for SEA Consumers: Founded in 2013 and acquired in August 2022, NusaTrip targets SEA travel market and has onboarded 650,000 hotels and over 500 airlines globally via its app and website. It has direct links with travel global distribution systems and its core SEA ultra-low-cost carrier airline partners. NusaTrip’s new 17.0 Java software should allow for faster searches and more features as well as add Gorilla Mobile eSim travel data and the ability to earn Society Points in 1Q 2024. In April 2023, NusaTrip acquired Vietnam-based VLeisure, which is a B2B hotel management software company. NusaTrip generated gross merchandise value (GMV) of $60 million, before the pandemic. GMV recovered to $43 million in 2022 and has already hit $45 million for the first nine months of 2023. So, it should have a record year this year, and approach $100 million within the next two years. Litchfield Hills forecasts net revenue of $2.0 million in 2023 and $4.5 million in 2024 as well as 73% gross margin in 2024, rising to 76% in 2025. Applying a 5x 2025 revenue estimate of $6 million, Litchfield Hills values NusaTrip at roughly $30 million. Applying an ERG multiple of 38x, Litchfield Hills valuation increases to a $65 million enterprise value.
• Two Upcoming 1H 2024 IPOs: Litchfield Hills looks for SOPA to spinoff both TMG and NusaTrip via Nasdaq IPOs in 1H 2004, which should generate significant shareholder value for SOPA shareholders.
• New Management: Ray Liang, Co-Founder and former CFO, was promoted to CEO in October 2023 and has adopted a strategy focusing on profitability, even shedding F&B business units and scaling back its unprofitable online retail business. Corporate focus now is on getting to free cash flow positive (which Litchfield Hills expects in 2024) and profitability (which Litchfield Hills expects in 2025).
• Technology Roadmap: Key tech milestones are as follows:
1) Representing a massive leap in technology, by upgrading from its 2002 Java 1.4 architecture to the 2021 17.0 version, NusaTrip platform will run faster and more reliably and more easily add enhancements like hotel bookings and Gorilla eSim cards.
2) Integrating Gorilla into NusaTrip, travel eSIMs are a natural addition to the airfare and hotels booking business. So, Litchfield Hills sees this as a natural progression and group synergy.
3) Upgrading the Society Points loyalty app and integrating with Gorilla, Leflair, NusaTrip and Gorilla as well as opening loyalty platform up to numerous other merchants.
• Financials: Revenue is quickly growing, and EBITDA nears breakeven. Achieving its initial goal of rapid top line growth, SOPA has reduced its EBITDA losses. Litchfield Hills expects revenue of $9.2 million in 2023, $17.1 million in 2024 and $25.1 million in 2025. Litchfield Hills projects positive EBITDA in 2025, consuming less than half of the $8 million cash on hand until then. Unlike loss-making microcap peers, SOPA has the balance sheet to get to profitability.
• Comparables: As a super app, Litchfield Research argues that SOPA comparables are Goto, Uber and Grab. Averaging all these companies together, Litchfield Hills estimates 2.9 x 2024 estimated revenue multiple and 27.5x estimated growth.
• Valuation: SOPA has a negligible enterprise value as its market cap is roughly equal to its cash value. Given how well SoPa has deployed cash to date, SoPa has been a frugal buyer of assets, buying at low valuations. Based on an EV/Revenue multiple of 4.8 times its estimate 2025 revenue estimate of $25.5 million, Litchfield Hills values SOPA at $123 million.
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. 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, 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
