1st December 2022, Kathmandu
Argus Research Co (“Argus”) issues Equity Research Report on Society Pass Incorporated (“SoPa”) (Nasdaq: SOPA), SEA’s leading data-driven loyalty, fintech, and e-commerce ecosystem.
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Summary Points:
Compelling fair value valuation. Applying a 4 times revenue multiple to its 2023E revenue run-rate forecast of $60 mn, adjusting for $23 million in net cash, and estimating a share count of 34 mn at 2023E, Argus arrives at a fair value estimate for SOPA of $7.50 per share.
Breakout year-on-year revenue growth in 3Q 2022. 3Q 2022 revenues were $2.1 mn, up from $83,000 in 3Q 2021, reflecting a rapidly accelerating platform rollout.
Accelerating 2022 and 2023 revenue projections. Argus forecasts 2022 revenues of $7 mn and 2023 revenue of $40 mn, driven by online travel booking and digital marketing. Argus forecasts Society Points to accelerate revenue growth with a revenue run rate of $60 mn by 2023E.
Healthy balance sheet. SoPa had cash of $23.0 mn and shareholders’ equity of $27.6 mn.
Significant onboarding of consumers and merchants. SoPa has amassed more than 3.3 million registered consumers and over 200,000 registered merchants/brands. Argus sees SoPa building critical mass in its user base to support its loyalty program.
Material revenue generating acquisitions. In 3Q 2022, Society Pass closed 4 acquisitions of consumer-focused businesses, highlighted by Singapore-based Gorilla Networks, a blockchain, and web3 technology-enabled mobile telecommunications operator; Thoughtful Media, a Bangkok-based, social media platform; Philippines-based Mangan Group, which offers restaurant delivery services; and Nusa Trip, an Indonesia-based online travel-booking site.
Society Points loyalty platform rollout. SoPa integrates these diverse businesses by attracting and retaining customers through an open-loop loyalty program, Society Points, which is expected to launch in 1Q 2023. SoPa announced a partnership with CoinSmart to add crypto payments capabilities and integration with Stripe’s financial payment infrastructure, which simplifies payment flow, accepts payments in multiple currencies and features anti-fraud technology.
Travel Vertical. In August 2022, SoPa acquired NusaTrip, the 1st IATA-accredited Indonesian online travel agency. Leveraging its first-mover advantage among Indonesian corporate and retail customers, NusaTrip has engaged with +80 million unique visitors and onboarded more than 1.2 million registered users, 500 airlines, and 200,000 hotels globally.
Digital Marketing Vertical. In July 2022, SoPa acquired Thailand-based Thoughtful Media, a social commerce-focused Multi-Platform Network, which recorded revenues of $5.8 million in 2021 and uploaded over 675,000 videos with over 80 billion video views since 2010. The network of 263 YouTube channels has onboarded over 85 million subscribers. Argus sees digital advertising enhancing Society Points and SoPa ecosystem via data-driven marketing campaigns.
– Food and Beverage Vertical. In July 2022, SoPa acquired Mangan, a Philippines local restaurant delivery service. Mangan has generated +100,000 app downloads and onboarded +500,000 registered consumers, +80,000 social media followers, and +1,200 registered restaurants.
Telecommunications Vertical. In June 2022, SoPa acquired Singapore-based Gorilla Networks and will incorporate Gorilla’s blockchain/web3 technology into its ecosystem. Consumers can convert unused mobile data into digital assets that can be redeemed for eVouchers or other VAS.