The company iFast Corporation is used to waning and waxing attention; at one point, the mainboard-listed wealth management platform was the best-performing stock on the Singapore Exchange (SGX).
From a low of $2.03 in September 2020, iFast shares soared close to $10 in September 2021. The subsequent few years were relatively quieter for the Singapore-headquartered firm — a private placement in early 2022 to fund a digital bank acquisition only depressed its share price further — and most analysts chose to dial in for iFast’s full-year results instead of attending in person.
Not so for iFast’s latest earnings call, however. Now occupying an entire floor at Singapore Land Tower, analysts and media filled the company’s boardroom on Feb 13 to hear from chairman and CEO Lim Chung Chun, who has led the company to post record net profit, revenue and assets under administration (AUA) yet again.
In FY2024 ended Dec 31, 2024, iFast’s net revenue rose 53.6% y-o-y to $248.38 million while net profit surged 135.7% y-o-y to $66.63 million. AUA grew 26.2% y-o-y to a record $25.01 billion at end-2024, which was mainly driven by net inflows of $3.3 billion throughout the year.
The results beat expectations, with net profit coming in 4% above the full-year estimates of consensus. iFast also chose to lead its announcement with news that its UK-based digital bank broke even in 4QFY2024, turning a net profit of $0.3 million less than three years into iFast’s takeover.
Analysts have reacted accordingly, with DBS Group Research analyst Ling Lee Keng staying “buy” and raising her target price on iFast to $10.23 from $9.57 previously.
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In a Feb 13 report, Ling says she now assumes 20% per annum AUA growth in FY2025 and FY2026, up from 15% previously.
She also thinks the digital bank, named iFast Global Bank (iGB), could post higher contributions on improved profitability.
Meanwhile, CGS International Research analyst Andrea Choong has chosen to maintain both her “add” call and $9.50 target price, as she waits for “more significant ePension earnings to come through” from iFast’s Hong Kong operations.
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There, iFast is onboarding trustees of Hong Kong’s mandatory pension fund, which has been “smoother than anticipated”, notes Choong. However, the Occupational Retirement Scheme Ordinance (Orso) segment of the contract has been slow, and iFast now expects contributions to begin by end-2QFY2025, one quarter late.
In addition, management announced that preparations are underway for the ePension business to expand into Macau. The AUA from trustees onboarded from the Orso and Macau pension projects would be counted towards iFast’s total AUA.
CGSI’s Choong expects upside earnings potential from these in FY2026 and FY2027.
But none have yet to match longtime bull UBS Global Research, whose analyst Aakash Rawat has maintained his “buy” call and $10.50 target price on iFast since February 2024.
‘Lofty’ P/E
Conversely, UOB Kay Hian Research’s Heidi Mo and John Cheong are taking a closer look at iFast’s fundamentals, noting in a Feb 14 report that iFast’s return on equity is lower than its peers and yet it trades at a “lofty” 35 times FY2024 price-to-earnings (P/E) in comparison to its peers’ average of 26 times.
Mo and Cheong have elected to remain on “hold” for iFast with a slightly higher $8.30 target price, up from $8.17 previously. “This is pegged to 0.5 standard deviations below its historical mean, as valuations appear rich.”
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Identifying iFast’s peers, however, could be a challenge. The UOBKH analysts are perhaps looking at the big picture by comparing iFast’s valuations to SGX, Bursa Malaysia and Hong Kong Exchanges & Clearing (HKEX), but these bourse operators are significantly larger in scale; iFast may have a larger market capitalisation (US$1.7 billion or $2.3 billion) than Bursa (US$1.5 billion), but it is dwarfed by SGX (US$10.16 billion) and HKEX (US$55.3 billion).
Compared to DBS’s forecast of 20% p.a. AUA growth this year and the next, UOBKH expects more aggressive growth of 25% y-o-y these two years.
The analysts think iFast’s ePension division will contribute “more significantly” this year as it ramps up the onboarding of trustees in ascending order of assets under management (AUM). “As of Dec 13, 2024, five of 24 schemes have been onboarded, while 12 are tentatively scheduled for 1Q/2Q2025, two for 2Q/3Q2025 and the remaining five for 3Q/4Q2025.”
EU, SG banking licence
s For the final dividend for FY2024, iFast’s directors have proposed a dividend of 1.6 cents per ordinary share, up from 1.4 cents this time last year. This brings iFast’s full-year FY2024 dividend to 5.9 cents per share, up from 4.8 cents in the prior year, and translates into a payout ratio of 26%.
CEO Lim says the dividend payout ratio should be similar in FY2025. While iFast’s share price has remained largely flat over the past year, it has swung wildly from a 52-week low of $6.50 to a 52-week high of $8.50.
Looking ahead, Lim says his team currently has no plans to apply for banking licences in Hong Kong or Malaysia, but the European Union is a different story.
“It would be helpful if we do have a licence there,” says Lim, “because you can get a licence in one country and that gives you the ability to more directly market to the whole continent or the whole EU. So, that is [an] interesting kind of opportunity for us to explore.”
iFast announced in December 2020 that a consortium it led was not among the successful applicants awarded a digital wholesale bank licence in Singapore.
Instead, the two licences went to the Greenland Group and Linklogis-backed Green Link Digital Bank, which launched on June 3, 2022; and Ant International’s Anext Bank, which launched on June 6, 2022.
The Monetary Authority of Singapore is currently not granting new licences, but Lim says the licence is still on his mind because the company is headquartered here. “At some point along the way, we would like to look at the opportunity.”
