iFAST Corporation Limited (SGX: AIY) has seen its share price increase sharply over the last few weeks.

The fintech company’s share price has jumped by 37% in three weeks, closing at S$7.55 as of 14 November 2023.

Investors may be puzzled by this sudden surge and wonder if the company’s share price may have run ahead of its fundamentals.

Could it be a good time to sell the stock because it is expensive, or could there still be potential for more gains down the road?

We dig into iFAST’s latest developments to determine the course of action investors should take.

A sharp jump in net profit

Investors may be feeling bullish about iFAST after the company reported a sparkling set of earnings for the third quarter of 2023 (3Q 2023).

Total revenue jumped 23.8% year on year to S$66.2 million while operating profit more than tripled year on year to S$11.2 million.

Net profit quadrupled year on year from S$2.1 million to S$8.5 million.

Meanwhile, the fintech also reported that its assets under administration (AUA) hit a new record high of S$19.12 billion as of 30 September 2023.

Net inflows also stayed healthy at S$751 million for 3Q 2023 and came in at S$1.62 billion for the first nine months of 2023 (9M 2023).

Elsewhere, iFAST’s fixed income division also experienced turnover exceeding S$700 million for 3Q 2023 with investors flocking to bonds, in line with the rising interest rate environment.

In line with the strong results, the group declared an interim dividend of S$0.013, similar to last year.

The promise of a (much) better 2024

Aside from the good results, investors are also feeling optimistic about the fintech for 2024.

2023’s profitability is already expected to be higher than that of 2022, but iFAST has guided for “robust growth” in revenue and profitability for 2024.

The reason for this optimism boils down to the initial one-month contribution from iFAST’s Hong Kong ePension division.

This maiden contribution helped to drive higher profitability for its Hong Kong division, with net profit for the country more than tripling year on year to S$6.8 million for 3Q 2023.

With this project on track for more contributions, investors can expect a full quarter of contribution for 4Q 2023 that should not just boost iFAST’s Hong Kong division, but also the group’s overall revenue and net profits.

The ePension division is slated to commence onboarding in 2Q 2024 with full operations anticipated by 2025.

Source: iFAST’s 3Q 2023 Presentation Slides

The group is sticking with its projections for both revenue and profit before tax contributions as shown above for this contract.