On Oct 23, iFast reported record high net profit of $6.16 million, a 150.6% growth y-o-y, achieved on the back of a 35.7% y-o-y surge in net revenue.
The way Ling sees it, iFast is now reaping the fruits of its labour from the last few years, where the company has been expanding its range of products and services in breadth and in depth.
“It now enjoys the operating leverage from its scalable online-based business model. The strong results from last few quarters are a testament of this shift,” she writes in a report dated Oct 23.
“The pace of increase in operating expenses is expected to moderate to 6.8-9.5% y-o-y in 2020, from the double-digit increase in the last few years. We expect the increase in revenue to more than offset the pace of rising costs,” she adds.
Ling also notes that the company is a beneficiary of the growing adoption of digitalisation, which was accelerated due to the Covid-19 pandemic.
“Securing a digital bank licence, and/or eMPF project would create additional revenue streams and further enhance its range of products and services,” she says.
On top of a raised target price, Ling has raised her assets under administration (AUA) growth assumption to 20% for FY2020F-FY2022F from 15% previously due to the company’s “strong growth” in AUA year-to-date and y-o-y.
She has also raised her earnings estimates for FY2020F/FY2021F by 9% and 6% respectively.
Shares in iFast closed 6 cents higher or 1.6% up at $3.76 on Oct 27.
