Between May 5 and May 8, iFast chairman and CEO Lim Chung Chun acquired 22,700 shares at an average price of S$4.29 per share. With a consideration of S$97,461, this increased his total interest in the global digital banking and wealth management platform from 20.14 per cent to 20.15 per cent. His preceding acquisition on the open market was on Jul 26, 2022, with 34,100 shares acquired at an average price of S$3.80 per share.

 

Lim co-founded iFast with the launch of its business-to-consumer division Fundsupermart.com in Singapore in 2000, following which the business-to-consumer division iFast Financial was launched in 2001. He subsequently led the company&rsquo s regional expansion efforts, extending iFast&rsquo s presence beyond Singapore to Hong Kong, Malaysia, China and the United Kingdom, building a well-established fintech ecosystem across the five markets.

 

Lim also led iFast&rsquo s successful listing on the SGX mainboard in December 2014. Lim has maintained that following the initial public offering, the group decided that it needed to evolve from being a &ldquo unit trust platform&rdquo to being a &ldquo wealth management platform&rdquo .

 

Since the end of 2014, iFast has also grown its overall assets under administration (AUA) from S$5.4 billion to S$18.1 billion as of Mar 31, 2023. Lim maintained back in 2016 that iFast would grow its overall AUA by broadening the range and depth of its offerings, and adding revenue streams from new geographical markets. On the product side, as of the end of its Q1 FY23 (ended Mar 31), the group offered access to over 17,500 investment products including over 11,800 funds from over 300 fund houses, over 2,000 bonds, stocks and exchange-traded funds listed on the Singapore, Hong Kong, US, Malaysia and China A stock exchanges as well as services including online discretionary portfolio management services, research and investment seminars, fintech solutions, and investment administration and transaction services.

 

At the end of its Q1 FY23, iFast&rsquo s AUA had declined 2.6 per cent from Q1 FY22, but rose 4.2 per cent from Q4 FY22. This saw the group&rsquo s profitability in Q1 FY23 better than the previous three quarters (Q2 FY22 to Q4 FY22), while Q1 FY23 group profit before tax was down 17.1 per cent from Q1 FY22, to S$6.1 million.

 

On the platform side, the main business divisions of the group includes the B2C division, the B2B division and the fintech solutions/B2B2C model. The B2C platform, FSMOne.com (formerly known as Fundsupermart.com), is a multi-products transactional platform that caters to investors who prefer to do their own investments online.

 

The B2B platforms cater to the specialised needs of more than 600 financial advisory companies, financial institutions, banks and Internet companies with over 12,200 wealth advisers.

 

iFast Fintech Solutions, the fintech solutions/B2B2C model, was launched in recent years to provide innovative and customisable fintech solutions for B2B clients and business partners, to empower them with their own B2C fintech capabilities.

 

The iFast Global Bank, a licenced UK bank that aspires to provide global banking connectivity to customers, corporates and financial institutions, on Apr 24 launched its Digital Personal Banking platform.

 

The group expects to enter a period of high growth in revenue and profitability between 2023 and 2025 as it executes its fourfold, three-year plan. Firstly, the group intends to make its core platform business bigger, better and more profitable. Secondly the group intends to accelerate the growth of its overall Hong Kong business and effectively delivering on the ePension services. Lim has recently maintained that the Hong Kong ePension division will help to drive iFast&rsquo s overall group profitability substantially, as can be seen in its guidance of targeted gross revenue of over HKD 1.6 billion (S$272.2 million) and profit before tax of over HKD 500 million by 2025, for its overall Hong Kong business. Thirdly the group intends to effectively develop iFast Global Bank&rsquo s digital banking services and other adjacent capabilities, while fourthly, making tangible progress towards having a truly global business model.

 

Lim believes the next three years present a very good timing for the group to execute its plans, adding that while the financial results grow more strongly, because of the contributions from the ePension Division, the group will take the chance to evolve into a strong global digital banking and wealth management player.

 

FOR the trading sessions that spanned May 5 to May 11, the Straits Times Index declined 1.2 per cent while the Hang Seng Index declined 0.6 per cent and the FTSE Bursa Malaysia KLCI declined 0.5 per cent.

 

Institutions were net sellers of Singapore stocks over the five sessions with S$155 million of net outflow. DBS Group Holdings : D05 -1.41%, Venture Corporation : V03 -2.17%, United Overseas Bank : U11 -0.75%(UOB), Thai Beverage : Y92 -1.67%, and City Developments Ltd : C09 +0.57% led the net institutional outflow for the five sessions. Meanwhile, Singapore Airlines : C6L -0.17%, CapitaLand Ascendas Reit : A17U -0.69%, Jardine Matheson Holdings : J36 +0.26%, Wilmar International : F34 +0.76%, and Oversea-Chinese Banking Corporation : O39 -0.41% (OCBC) led the institutional inflow over the five sessions.

 

Share buybacks

There were 15 companies conducting share buybacks over the five trading sessions through to May 11, with a total consideration of S$22.2 million. OCBC and UOB led the five-day consideration tally, buying back 800,000 shares at an average price of S$12.34 and 288,000 shares at an average price of S$28.19, respectively.

 

Director and substantial shareholder transactions

The five trading sessions saw 80 changes to director interests and substantial shareholdings filed for close to 40 primary-listed stocks. This included 12 company director acquisitions with no disposals filed, while substantial shareholders filed seven acquisitions and four disposals.

 

Acquisitions saw filings for directors of Bonvests Holdings : B28 0%, China Sunsine Chemical Holdings : QES +1.23%, Darco Water Technologies : BLR 0%, mDR : Y3D +1.39%, Tai Sin Electric : 500 +2.56%, UOB and Yanlord Land Group : Z25 -1.74%, in addition to Oxley Holdings, : 5UX 0%iFast Corporation : AIY +0.24% and YKGI : YK9 -2.26%.

 

iFast Corporation AIY 0.22% continues to split analysts with the results of its latest quarter, with its UK bank still contributing start-up losses a year after its acquisition.

 

The risk-off sentiment persists at iFast, writes CGS-CIMB Research analyst Andrea Choong in an April 27 note. Choong is among the more pessimistic analysts, maintaining &ldquo reduce&rdquo on the wealth management platform with an unchanged target price of $3.50. Choong&rsquo s target price represents a 25.2% downside against iFast&rsquo s last traded price of $4.68 on April 26.

 

iFast recorded patmi of $3 million in 1QFY2023 ended March, up 130% q-o-q but down 48% y-o-y. This is 42% and 52% below CGS-CIMB and consensus estimates.

 

The miss was due to a weaker-than-expected recovery of iFast&rsquo s wealth management platform business, although this was partly offset by stronger interest income from its banking operations from deposits with the central bank and income from bonds, notes Choong.

 

Overall, 1QFY2023 net revenue rose 4% q-o-q and 10% y-o-y. Although start-up losses from its banking operations narrowed q-o-q to $1.7 million in 1QFY2023, compared to a $5 million loss in FY2022, Choong expects losses to continue in FY2023 as the bank ramps up.

 

1QFY2023 net profit formed 14% and 12% of CGS-CIMB and consensus full-year estimates.

 

iFast declared an interim dividend per share (DPS) of 1 cent in 1QFY2023. Choong expects DPS of 4.8 cents in FY2023, unchanged from FY2022.

 

iFast&rsquo s UK bank launched its digital personal banking platform on April 24, allowing customers around the world to open a bank account. Initial services include fixed term and notice deposit products across multiple currencies.

 

That said, its remittance business (EzRemit) will remain its key contributor until other products gain traction, notes Choong. In time, iFast aims for its banking operations to generate a 1.5% net interest margin (NIM), lower compared to the local banks&rsquo current 2% margin given its focus on executing a lower-risk strategy.

 

Albeit delayed, iFast guided that the ePension project in Hong Kong is progressing and reiterates its stance that its portion of project fees should commence in 4QFY2023.

 

That said, Choong maintains that FY2024 could be more realistic, repeating a belief from her report following iFast&rsquo s FY2022 results.

 

&ldquo We maintain our projections (40%-50% discount to its guidance) pending visibility on achieving these goals. Clarity on its administration of ORSO (Occupational Retirement Scheme Ordinance) could be a re-rating catalyst,&rdquo writes Choong. &ldquo We reiterate &lsquo reduce&rsquo given persistent risk-off sentiment amid interest rate volatility.&rdquo

 

AUA bright spot

 

That said, analysts have also pointed to iFast&rsquo s positive net inflows of client assets and rise in 1QFY2023 assets under administration (AUA).

 

As at end-March, iFast&rsquo s AUA rose to $18.1 billion, down 2.6% y-o-y but up 4.2% q-o-q, as its key market of Singapore saw opportunities with stronger equity and bond market performance during the quarter.

 

&ldquo It is important to note that the q-o-q rise has contributed to iFast&rsquo s improved profitability as compared with the previous three quarters,&rdquo note UOB Kay Hian Research (UOBKH) analysts Heidi Mo and John Cheong.

 

In an April 27 note, Mo and Cheong maintain &ldquo hold&rdquo on iFast with a lower target price of $4.81 from $5.06 previously.

 

AUA growth has been the lead driver for iFast, which translated to greater operating scalability for earnings growth, note the UOBKH analysts.

 

Due to negative market effects, Mo and Cheong expect profitability to be impacted before the new ePension division starts to contribute more meaningfully from 4QFY2023. &ldquo Over the longer term, we remain positive on iFast as we believe in the group&rsquo s strategy to increase its scale through product offerings and geographical reach.&rdquo

 

&lsquo Fully valued&rsquo

 

Meanwhile, DBS Group Research analyst Ling Lee Keng maintains that iFast is &ldquo fully valued&rdquo , a recommendation between &ldquo hold&rdquo and &ldquo sell&rdquo . In an April 26 note, Ling trims her target price to $3.92 from $3.98 previously.

 

Ling notes a pause in iFast&rsquo s operating leverage. &ldquo iFast&rsquo s scalable platform business model enables the group to scale up without a proportionate increase in cost. However, we expect a pause in operating leverage as the group is currently building its ePension project in Hong Kong, with substantial contribution only expected in 2024.&rdquo

 

Furthermore, the UK digital bank that the group acquired in 2022 is only expected to breakeven in 2024. &ldquo With higher costs and slower growth in revenue, the group is presently not able to enjoy operating leverage. We project the group to achieve operating leverage benefits only in 2024 and beyond,&rdquo writes Ling.

 

As a result, Ling cuts her earnings forecasts on iFast&rsquo s weaker margins. &ldquo We have reduced FY2023/FY2024 earnings by 20% and 16% on the back of weaker-than-expected margins. We now project net margins of 6.7% for FY2023 and 12.9% for FY2024, compared to 8.7% and 15.4% previously. Margins are expected to improve FY2024 onwards with the expected contribution from the ePension project.&rdquo

 

iFast Corp has reported earnings of $2.98 million for 1QFY2023 ended March, down 48.1% over the preceding half year.

 

The company attributes the drop to start-up costs from iFast Global Bank in the UK. In addition, the total value of assets under administration dropped too.

 

Revenue for the same period was up 1.9% y-o-y to $53.9 million. While the company collected lower brokerage fees, it enjoyed 522.4% jump in interest revenue.

 

The company' s assets under administration for 1QFY2023 declined 2.6% y-o-y to $18.14 billion as at March 31,

though on a q-o-q basis, it was up 4.2%. Versus 4QFY2022, the company reported better earnings too.

 

iFast says it has put in place various key pieces that will help lead to " a period of high growth in revenue and profitability" in the coming three years to 2025.

 

Key planks include stepping up the growth of its Hong Kong business, including the delivery of the ePension contract. iFast expects its " core platform business" to become bigger and more profitable too.

 

See also: Yangzijiang Shipbuilding reports US$10.98 bil in total orderbook value for 1QFY2023

 

The company is leaning on the digital banking operations of iFast Global Bank to launch new services, and in a way, " making tangible progress towards having a truly global business model."

 

iFast, one among a handful of SGX-listed companies paying quarterly dividends, plans to keep the payout for 1QFY2023 at one cent.