SINGAPORE - Wealth management platform iFast Corporation aims to shrug off a dismal performance in 2022 with a period of high growth in revenue and profitability from 2023 to 2025, said chief executive Lim Chung Chun.
In a call on Wednesday to discuss the company’s latest financial results, Mr Lim said that although net profit fell substantially this financial year compared with the previous year, the group’s final dividend payout to shareholders was kept constant at a proposed 1.4 cents per share.
In 2022, iFast faced a situation where revenue stagnated at some point in the year and costs increased, which impacted profitability.
Although profitability will improve in 2023, iFast will not “rush to raise (its) dividends” and the bulk of the year’s dividend payouts will be similar to last year’s, said Mr Lim.
But shareholders can expect further growth in dividends from 2024, he added.
On Tuesday, iFast posted an 82 per cent fall in net profit to $1.3 million for its fourth quarter ended December. Revenue for the quarter was down just 13 per cent to $47.4 million.
The drag on earnings came from an estimated impairment allowance of $5.2 million on the back of business restructuring in iFast India, preparations for the ePension division in Hong Kong, and other important strategic investments that the group made over the year that clashed with tough global financial market conditions.
iFast is expecting the China market to remain tough in the short term, but Mr Lim said the group will try to contain its losses by managing costs.
Meanwhile, iFast is expecting its ePension business in Hong Kong to begin contributing to its financials in a significant way in the later part of 2023.
In 2024, iFast will book a full-year contribution from this business, Mr Lim said.
“We are looking at the (Hong Kong) ePension division to be an important driver of growth in the next three years,” he added. But the growth of this division will taper off after 2025.
iFast’s other business segments – such as stocks, bonds, unit trusts and portfolio management services – are pegged to short-term market conditions.
But the ePension division will not be subject to market volatility because it is a “service fee”, Mr Lim said. The group therefore has “comfortable knowledge” of the revenue this segment will bring in 2023.
iFast is maintaining its guidance for the Hong Kong business issued in April 2022.
The group is aiming to hit gross revenue of more than HK$400 million (S$68 million) in 2023 and profit before tax of more than HK$100 million.
In 2025, gross revenue is expected to exceed HK$1.6 billion and profit before tax is expected to surpass HK$500 million.
Despite the stumble in the company’s fourth-quarter results, Mr Lim said iFast is looking to adopt a “global business model”.
The acquisition of an 85 per cent stake in UK-based iFast Global Bank (formerly known as BFC Bank) back in January 2022 is one move that will help the company reach this goal, Mr Lim said.
He believes iFast can benefit investors from various emerging markets, who will be looking for the best wealth management platforms across the world that can give them seamless access and connectivity to global products and global exchanges.
In the near or medium term, iFast will look to secure customers in various countries without having to set up physical offices in each country.
Over the past year, shares of iFast have fallen about 15 per cent, which Mr Lim said “reflects the fact that business profitability has been reduced”.
But the company’s shares have steadily been over the $5 mark despite a recent downgrade in January from DBS to “fully valued” on the back of reduced earnings estimates. The bank had also cut the company’s target price to $3.98 from $4.
Mr Lim said long-term investors will always look at the potential of the business despite any short-term pullback or disruption.
