“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,” Ling says in a report on Feb 15.
The analyst forecasts iFast’s AUA to grow 8% in FY18 and another 5% in FY19. As a result, FY18 and FY19 earnings estimates have been tweaked upwards by 6% each.
“Revenue and profitability improved significantly as the group reaps the effort over the last 2-3 years to broaden the range of products and services on its platforms,” Ling adds.
iFAST saw its earnings more than double to $2.5 million for the 4Q ended December, from $1.1 million a year ago. This brings the group’s earnings for FY17 to $9 million, up 65.9% from $5.4 million in FY16.
Revenue for the quarter grew 30.8% to $28.2 million, from $21.5 million previously.
See: iFAST reports doubling of 4Q earnings to $2.5 mil on higher revenue
“iFAST has made significant progress in the last 2-3 years by broadening the range of investment products and services on its platforms, and laying the infrastructure to kick-start its business in China, a market it believes will be key in the future,” Ling notes.
While its China operations incurred a loss of $4.2 million in FY17, Ling says the country is expected to be an important contributor to the group in the years ahead.
“The China business remains in the early stages of building the iFAST brand among potential clients and investment practitioners in China’s wealth management industry,” Ling says.
Meanwhile, iFast saw its AUA in Singapore, Hong Kong, and Malaysia grow by 19.3%, 27.4%, and 52.0% respectively in FY17.
As at 1.05pm, shares of iFast are trading 1 cent up at 91.5 cents, implying an estimated price-to-earnings ratio of 23.6 times and a dividend yield of 2.7% for FY18.
