S'pore brokerage with shares up 500% looking to China for more gains

Online brokerage iFast Corp, which has been Singapore's best-performing stock over the past year, is betting on China and a retail-trading frenzy to help it grow assets more than fivefold by 2028.

Although the company's operations in China are loss-making, chief executive Lim Chung Chun said the country is poised to become the wealth-management platform's fastest-growing market and is key to its goal of reaching $100 billion in assets under administration by 2028.

Investors have bought into that vision, with iFast shares soaring more than 500 per cent in the past 12 months, beating all members of the FTSE ST All-Share Index.

"The potential of the China market is immense, and the kind of losses we are generating today are a very manageable amount, considering the size of the market," said Mr Lim in an interview.

The company's shares closed 5.66 per cent higher yesterday.

Singapore-based iFast has benefited from a surge in retail trading by stuck-at-home investors trying their hand at equities, which helped the company more than double its net income last year.

But to achieve the $100 billion goal, first stated in 2018, assets will need to expand at a compounded annual rate of 27 per cent until the end of 2028, Mr Lim said. That compares with an annualised rate of 34 per cent in the past two years.

"The group continues to be in investment mode, which it expects will help reap benefits at a later stage," Mr Krishna Guha, an analyst at Jefferies Financial Group, wrote in a note last month, referring to iFast's China business.

Mr Lim said that iFast has good "growth momentum" in China, though it reported $4.9 million in losses in that market last year. He said there is "no timeline for breaking even".

The company, which counts Singapore as its biggest market, initiated private-fund management in China in February.

It relies on other businesses, including financial advisers and Internet firms, to sell its funds in the large Chinese market, Mr Lim said, adding that about 80 such companies are being used to make those connections.

The brokerage remains focused on expansion. In addition to being registered as a private-fund manager in China, iFast also won a contract for Hong Kong's pension fund platform and started stockbroking activities in Malaysia over the past year.

It is also applying as part of a consortium for a digital-banking licence in Malaysia - though it lost out on getting one in Singapore last year.

Even after the market-leading rally over the past year, iFast shares are poised for further gains, according to analysts who cover the stock. All five of them have a buy rating, and their consensus price target implies a gain of about 25 per cent more over the next 12 months, compared with an estimated 13 per cent rise in the broader FTSE gauge, according to data compiled by Bloomberg.

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