iFast’s service agreement with PCCW entails a seven-year maintenance period from FY2023, notes Choong. It is expected to have a “very material” financial impact during the period.
See also: iFast Malaysia launches stockbroking services in the US and Hong Kong
iFast says it aims to provide further guidance growth on the contract by end-FY2021.
As no specific details have been revealed yet, Choong has based her earnings assumptions on available data reported on Bloomberg.
See also: SAC Capital initiates ‘buy’ on Sanli Environmental after $105.3 mil contract win from PUB
“We think that iFast’s service agreement with PCCW could result in additional [around] $10 million in annual net profit during the 7-year maintenance period beginning FY2023, assuming 20 basis points (of HK$1.2 trillion or $208.65 billion MPF assets under management or AUM) in annual fees, 30% share in fees and 15% net profit
margin. The eMPF contract may be extended by 1-3 years, boosting sequential earnings,” she writes.
On this, Choong has also upped her target price estimate on iFast to $12.50 from $8.31, the second increase in her estimate in seven days.
See also: CGSI downgrades Grab to ‘hold’ ahead of 2QFY2025 results, expects consumer spend to slow in 2H2025
“An upside risk is winning a digital banking licence in Malaysia while a downside risk is widening losses in China.”
For more stories about where the money flows, click here for our Capital section
As at 12.22pm, shares in iFast are trading 10 cents lower or 1.2% down at $8.37, or 17.66 P/B, according to CGS-CIMB’s estimates.
Photo: Albert Chua / The Edge Singapore
