DBS Group Research analyst Ling Lee Keng has raised her target price to $12 from $10 as she lauds iFast’s “strong” 3QFY2025 results, which were driven by strength across its wealth and pension segments.
In 4QFY2025, Ling is expecting iFast to post a “more robust” performance compared to its 3QFY2025 numbers, primarily attributable to its ePension business in Hong Kong. The analyst also expects profitability to grow at an “accelerated pace” driven by operating leverage, even though operating costs are projected to increase over the coming months. The group is looking to hire to onboard additional trustees, including two major trustees by the end of the year or in early 2026. Cost pressures are expected to ease after FY2026 after the completion of trustee onboarding.
Among iFast’s businesses, the analyst sees iFast Global Bank as the least competitive, which presents a “relatively open” market opportunity compared to the more saturated wealth management sectors.
“iFast Global Bank is well positioned to tap into a large, underserved global customer base. By strategically targeting the right market segments, particularly those underserved by traditional banks, iFast Global Bank demonstrates significant growth potential,” she writes.
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Ling also likes iFast’s high AUA target of $100 billion for 2028 to 2030, which exceeds her target of 25% growth per annum and represents a substantil increase from its AUA of $27.2 billion as at June 30.
“Historically, iFAST’s AUA has demonstrated a compound annual growth rate (CAGR) of 20% between FY2014 - FY2024, driven by the group’s continuous expansion of products and services on its platforms. We have increased our AUA growth assumption to 25% y-o-y from 20%, to reflect the strong momentum seen in 3QFY2025,” she writes.
In addition to her higher target price, Ling has increased her AUA growth assumption to 25% y-o-y from 20% to reflect the strong momentum from 3QFY2025. She has also lowered her margin estimates to 19.1% and 19.4% for FY2025 and FY2026 from 20.3% and 20.9% previously to account for the company’s ongoing expansion and investment. Consequently, her net profit estimates for FY2025 has been lowered by 1.8% while her estimates for FY2026 has increased by 0.3%.
UOB Kay Hian’s Heidi Mo and John Cheong have increased their target price to $11.12 from $9.92 as iFast’s 3QFY2025 results stood slightly above their expectations. The company’s AUA has also exceeded their full-year AUA growth forecast of 20%.
Like Ling, Mo and Cheong expect to see a stronger performance in 4QFY2025 driven by an increase in eMPF (or Mandatory Provident Fund) onboarding and steady inflows across iFast’s key markets.
In addition to their target price, Mo and Cheong have increased their FY2025 to FY2027 earnings forecasts by 2% to 7% on the back of stronger-than-anticipated AUA inflows. They have also increased their AUA growth assumption for FY2025 to 26% from 20%, reflecting the robust 9MFY2025 inflows, which has already surpassed FY2024 levels.
CGSI’s Tay Wee Kuang and Meghana Kande have also increased their target price to $11.70 from $9.20 previously. Their new sum-of-the-parts (SOTP) valuation is a “better reflection” of iFast’s operations today given the balance sheet-heavy nature of its banking operations and the project-based nature of its ePension business.
To them, iFast Global Bank should help sustain the company’s AUA growth for its wealth management business over FY2025 to FY2027 through its iFast Bridge strategy. The analysts estimate iFast’s core wealth management business to have grown by 38% y-o-y in FY2024 and is expected to grow at a strong 33% CAGR over FY2025 to FY2027.
On its Hong Kong business, Tay and Kande believe iFast will exceed its profit before tax (PBT) guidance of at least HK$380 million ($63.3 million) in FY2025 given that its 9MFY2025 PBT of HK$282 million formed 74.2% of its full-year target already.
“During its analyst briefing, management shared that it expects revenue contribution from eMPF to grow beyond FY2026, albeit at lower rate than in FY2025 - FY2026, and that iFAST will continue to streamline processes to improve operational efficiencies,” the analysts write.
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Unlike their peers, the analysts have maintained their FY2025 to FY2027 patmi estimates and have lowered their earnings per share (EPS) expectations by 3.1% to 5.5% to account for the higher share base from iFast’s employee share option scheme and performance share plan.
Finally, Aletheia Capital’s Nirgunan Tiruchelvam has raised his target price to $11.50 from $10.50 as he cheers iFast’s “winning streak” and “solid topline trajectory”.
Tiruchelvam has also raised his revenue and net income forecast by 5% and 9% respectively in FY2025 to FY2028 due to expectations of higher AUA growth. The analyst also sees further buyback potential from the company.
“iFAST’s buyback programme, of up to 10% of issued shares, continues to signal confidence in intrinsic value. The net cash position is $1 billion (47% of enterprise value) and free cash flow ($166 million projected in FY2025) indicates balance sheet strength. This provides optionality for further buybacks,” he writes.
As at 12.23pm, shares in iFast are trading 11 cents higher or 1.12% up at $9.92.
