Yahoo Finance iFAST’s Share Price Surged 64% in the Past Year: Can the Fintech Surpass its All-Time High of S$10?
iFAST Corporation Limited’s (SGX: AIY) share price has been on a tear over the past five years.
The fintech group saw its shares soar nearly sevenfold from S$1.08 back in late June 2019 to the current S$7.29.
In the past year alone, iFAST’s share price has surged by 62% but is still around 27% below its all-time high of S$10 reached in September 2021.
Does the group have what it takes to revisit its all-time high and should investors feel optimistic about its business? Let’s find out.
Soaring profits and a sharply higher dividend
The sharp increase in iFAST’s share price can be traced to the group’s improved fundamentals.
The fintech has seen both its revenue and net profit increase significantly as it commences its Hong Kong eMPF (mandatory provident fund) contract.
Snagged back in January 2021, the initial contributions from this mega-contract only started flowing in during the third quarter of 2023 (3Q 2023) with an initial one-month contribution.
Because of this contract, along with the organic growth of its assets under administration (AUA), iFAST saw a sharp improvement in both its revenue and profits for 2023.
2023’s total revenue climbed 22.8% year on year to S$256.5 million with net revenue increasing by 36.7% year on year to S$161.7 million.
Operating profit more than tripled year on year to S$37.1 million while net profit more than quadrupled year on year from S$6.4 million to S$28.3 million.
The momentum carried over into 1Q 2024 with iFAST announcing an 87.4% year-on-year surge in net revenue to S$58.1 million.
Operating profit leapt 357.2% year on year to S$18.5 million with net profit soaring 387.4% year on year to S$14.5 million.
The directors upped the interim dividend by 30% year on year from S$0.01 to S$0.013, in line with the strong results.
iFAST’s AUA also rose 16% year on year to hit a record S$21.05 billion.
The Hong Kong eMPF contract
There could be more in store for iFAST.
Its Hong Kong eMPF contract, which forms part of its Hong Kong ePension division, is poised to become an important growth driver for 2024 and 2025.
Net revenue for its Hong Kong division came in at HK$306 million for 2023 while profit before tax (PBT) stood at HK$139 million.
For 2024, iFAST projects that net revenue should exceed HK$650 million with PBT coming in above HK$250 million as the eMPF project ramps up.
By 2025, the group expects its Hong Kong division to chalk up net revenue of more than HK$1 billion while PBT is expected to exceed HK$500 million.
Based on this forecast, investors can expect much more from iFAST’s ePension division.
iFAST’s digital bank wild card
In addition to its core wealth management and ePension businesses, iFAST also acquired a digital bank back in early 2022.
This new division, aptly named iFAST Global Bank or iGB, saw customer deposits shoot up 475% year on year to £302.9 million (around S$515.4 million).
The bank’s digital transaction banking division saw continued growth in customers and will launch new systems and product enhancements in 2Q 2024.
On the digital personal banking front, iFAST has lined up further product enhancements for the second half of 2024.
iGB’s net revenue grew nearly 44% year on year to S$4.2 million but incurred a slightly larger net loss of S$2.3 million for 1Q 2024.
Despite this loss, management expects iGB to become an important growth driver for the group in 2025 and beyond.
Another catalyst on the way
Meanwhile, iFAST also launched ORSO ePension services for its Hong Kong division last year.
ORSO stands for Occupational Retirement Schemes Ordinance and is also a retirement protection scheme set up by the Hong Kong government.
Management expects this project to begin contributing by the end of this year or from 1Q 2025 onwards.
The group is busy preparing for the official start date for the ORSO contract.
The ORSO project is another catalyst for iFAST that should help to add to its revenue and help boost its profits and cash flow.
Get Smart: Revenue and profits look poised to increase
From the above, it seems clear that iFAST’s business should enjoy a fillip for this year and the next.
Its Hong Kong ePension division is set to enjoy higher revenue and PBT from both the eMPF and ORSO projects.
Although iGB is still a wild card for now, management seems confident that the bank can contribute to the group’s top and bottom lines from 2025 onwards.
Barring unexpected delays or hiccups, investors should expect the fintech to report better financial numbers for 2024 and 2025.
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Disclosure: Royston Yang owns shares of iFAST Corporation.
The post iFAST’s Share Price Surged 64% in the Past Year: Can the Fintech Surpass its All-Time High of S$10? appeared first on The Smart Investor.
