In addition, iFAST’s business is significantly geared to recurring revenue growth from AUA rather than a transaction/sales-commission-driven structure one commonly associate with product distribution businesses.
iFAST itself is optimistic about being able to continue to grow its assets under administration (AUA) over the medium term from a combination of higher penetration in Singapore as well as ramp-up in overseas operations.
iFAST ventured into Hong Kong in 2007, Malaysia in 2008, and China in 2014 for their growth opportunities and potential for cross-border offshore investment flows.
However, iFAST’s AUA is still very much Singapore-centric at about 69% in 1H17 followed by Hong Kong at 22% and Malaysia at 7%.
Management says its strategy is to continue to broaden and deepen its range of products and services in these overseas markets.
As 96 cents, iFAST trades at 24 times FY18 and 19.6 times FY19 earnings, based on Bloomberg consensus compared to 28.3 times and 24.1 times for a basket of listed firms in affiliated areas like online brokers, fund houses and financial advisory firms.
