Maxim Group LLC (“Maxim”) issues research report on Society Pass Inc. (Nasdaq: SOPA) (“SoPa”), Southeast Asia’s (SEA) next generation, data-driven, loyalty, fintech and e-commerce ecosystem.
Click Here (on Maxim research website) or Here (on Society Pass website) to view the full Maxim research report.
Summary Points:
- Diversification– SOPA started 2022 with just F&B (food & beverage) and Leflair (lifestyle) and now has 6 verticals. The company has also expanded to 5 countries; Singapore, Vietnam, Philippines, Indonesia, and Thailand. Maxim believes there are significant cross selling opportunities. Specifically, Maxim believes Thoughtful Media can market the company’s other brands and the lifestyle business can be expanded geographically. Maxim has a positive view on the SEA market due to increasing mobile and ecommerce penetration, younger populations, travel coming back, and the opportunity to consolidate smaller companies. The acquisition of Inetindo creates additional expansion opportunities in other geographies and other branded products to be sold, and can increase the subscriber base that can be deployed to the potentially highest profit margin business of Society Points (loyal progam).
- Acquisitions– Acquisitions have diversified revenue streams to include Apple distribution stores, online advertising, travel/hotel ticketing, and telecom while expanding geographies in SEA. The Apple distribution stores acquisition was the largest acquisition to date in terms of revenue, with the potential to expand geographically and add users for its Loyalty program.
- Cashflow Positive– Management is forecasting to be cash flow positive at some point in 2H23.
- Healthy balance sheet– SOPA ended 2Q23 with unrestricted cash of $10.8M (close to the entire market cap of SOPA), slightly down from $13.8M at the end of 1Q23, and no material amount of debt. 2Q23 cash flow from operations was an outflow of ($2.9M). 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.
- Raise Revenue Targets– Maxim projects revenue to increase from $5.6M in 2022, to $16.5M ($15.0M prior) in 2023, up 194% y/y, with an adjusted EBITDA loss of ($11.0M) ($7.7M prior). For 2024, Maxim projects revenue of $44.3M ($25.1M prior), up 168% y/y.
- Compelling valuation/Reiterate Buy– Maxim targets share price to increase to $1.50. SOPA trades at an EV/revenue multiple of 0.1x Maxim’s 2024 revenue estimate vs. the peer average of 2.4x. Maxim’s $1.50 price target is based on its 10-year DCF analysis, which utilizes a 22% discount rate, 13x terminal multiple, and 3% terminal growth rate, equating to 0.7 x 2024 revenue estimate. Maxim’s positive outlook is supported by the attractive SEA markets and opportunities to consolidate smaller companies.
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 Angeles, Bangkok, Ho Chi Minh City, Jakarta, Manila, and Singapore, Society Pass Incorporated (Nasdaq: SOPA) is an acquisition-focused holding company operating 6 interconnected verticals (loyalty, digital media, travel, telecoms, lifestyle, and F&B), 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.
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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 3.3 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; Pushkart.ph, a popular grocery delivery company in Philippines; and NextGen Retail, a Indonesia-based 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/.
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