iFast Corporation – An Irresistible FinTech Opportunity In Singapore

iFast Corporation is one of those handful of companies which has managed to capitalize on COVID19 situation. iFast is leaving no stone unturned in becoming a preferred choice for both B2B and B2C wealth investment platform across the south-east Asia regions. iFast was founded in the year 2000 and is now proving to be one of the most irresistible FINTECH opportunities in Singapore.

The Group’s assets under administration (AUA) grew 44.5% YoY to a record high level of $14.45 billion as at 31 December 2020. Net inflows in client assets was close to $3.16 billion in FY20.

The group derives income from both B2B and B2C business segments. Both segments have grown consistently since past two decades.

B2C segment contributed almost 20% of total FY20 revenue (Vs 16.5% in FY19). The increase in revenue share for B2C segment was mainly due to continuous increase in transaction fees resulting from increased investment subscription from customers especially in ETFs and stocks, service fees arising from the provision of currency conversion administration services resulting from higher clients’ trading volume of ETF.

Remaining 80% of total revenue came from B2B segment in FY20 (Vs 83.5% in FY19). For B2B segment, besides the increase in transaction fees resulting from increased investment subscription from customers in ETFs and stocks and service fees arising from the currency conversion administration service provision, the trade volume of customers’ investment subscription in UTs grew more significantly in the period.

It has been consistently growing its top (revenue) and bottom line (Net profit) since past 5 years.

But there is a catch here, we must not go by total revenue figure alone. Rather, we need to take a look at net revenue figure (which is adjusted for commission & fee paid or payable to third party financial advisers and securities brokerage expense). Net revenue figure normalizes the inflated B2B segment total revenue figure (which includes fee & commission to be paid to brokers as well).  

Below is the geographical breakdown of net revenue figure –

Singapore region contributes the majority of total net revenue (~66%). Hong Kong is second most important region, it contributes almost 22%. Malaysia contributes almost 10% of the net revenue.  China contributes a negligible level of 2% of total net revenue. Operating expense wise, china’s share of total operating expense is almost 10%. So, return on that level of investment is not yet visible. China has not yet started generating net profit for the group. China operation made a loss of $4.8m in FY20.

Barring China, its other regions have been doing quite well –

Recurring Net Revenue

Below diagram reveals that almost 55-60% of total AUA has been recurring revenue since past 5 years.

Dividend Yield

Company’s current dividend yield is close to 0.56%. Below is the dividend history for the firm –

Year – Dividend paid

2021 – $0.01

2020 – $0.032

2019 – $0.032

2018 – $0.032

2017 – $0.029

2016 – $0.028

2015 – $0.027

Future Prospects

Overall, the company aims to scale AUA of S$100 billion by the end of 2028 (AUA was S$14.5 billion as of end-2020). This plan appears to be quite aggressive but still look achievable.

Disclaimer

Our content is for informational purpose only. We don’t recommend the stocks by such analysis. You must do your own research before undertaking any investment making decision.

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Published by Amit

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