The group is now a more integrated wealth management platform, with five key product groups – unit trusts, ETFs, bonds, stocks and insurance.
“There is still room for growth as the current AUA level remains small relative to the size of the wealth management industry in Singapore and the other Asian markets it operates in,” says DBS Group Research analyst Ling Lee Keng in a Monday report.
“No change to our AUA growth assumption of 8% for FY18F and another 5% for FY19F. In FY20F, we expect another 5% growth in AUA,” adds Ling.
iFAST is also pursuing a virtual banking licence in Hong Kong and this “could strengthen its position as a key wealth management fintech player”.
In 2Q18, iFAST reported earnings jumped 41.1% y-o-y and 7% q-o-q, bolstered by the growth in the group’s business and AUA, which benefited from new inflows of investments from customers.
DBS is maintaining its “buy” on the stock with a target price of $1.26 based on Dividend Discount Model (DDM) valuation methodology, given that it is a cash-led business, supplemented by a relatively high dividend payout ratio of about 60%.
As at 4.02pm, shares in iFAST are up 5 cents at $1.14.
