https://www.theedgesingapore.com/capital/brokers-calls/ubs-raises-ifast-target-price-even-further-1050-after-strong-fy2023-results

UBS Global Research analysts Aakash Rawat and Benjamin Tan have further increased their target price on iFast Corporation, following &ldquo strong&rdquo results for FY2023 ended Dec 31, 2023.

In a Feb 22 note, Rawat and Tan maintain their &ldquo buy&rdquo call with a higher target price of $10.50, up from $10 previously. 

 

iFast Q4 net profit surges 917% to S$13.2 million

 

FINANCIAL services company iFast Corporation&rsquo s net profit for the fourth quarter surged 917.1 per cent, on the back of higher revenue, as initial contributions from its ePension division streamed in.

Net profit for the three months ended Dec 31, 2023 climbed to S$13.2 million from S$1.3 million in the year-ago period. On a per share basis, earnings rose to S$0.0446 in Q4 FY2023, from S$0.0044 in Q4 FY2022.

A final dividend of S$0.014 per share was proposed, unchanged from the previous year.

Total revenue for the quarter climbed 69.3 per cent on-year to S$82.2 million amid an increase in assets under administration (AUA).

iFast said its AUA rose 13.8 per cent on-year to a record S$19.8 billion as at end-2023, driven by net inflows of S$2 billion during the year. Net inflows were also positive during the fourth quarter, amounting to S$334 million.

For the full year, net profit increased by 340 per cent on-year to S$28.3 million, on the back of a 22.8 per cent increase in total revenue to S$256.5 million.

&ldquo On an overall basis and barring unforeseen circumstances, the group expects 2024 to see robust growth rates in revenues and profitability compared to 2023.&rdquo

For the fourth quarter, the group&rsquo s non-banking operations saw net revenue increase 94.3 per cent on-year to S$53.9 million, while profit before tax (PBT) increased 335 per cent to S$19.5 million.  Net profit for non-banking operations rose 390.7 per cent year on year in the fourth quarter.

Meanwhile, banking operations saw net revenue rise 59.9 per cent on-year to S$3.3 million.

&ldquo The Digital Personal Banking division has had an encouraging progress since launch in Q2 2023,&rdquo iFast said. &ldquo UK residents accounted for about 30 per cent of the deposits, while the rest comes from residents of over 60 countries from around the world.&rdquo

The group added that its banking arm is expected to post a reduced loss in 2024, and is targeted to break even by the fourth quarter. The banking business is expected to be &ldquo an important growth driver&rdquo from 2025 and beyond.

iFast also said it had achieved its 2023 gross revenue targets for its Hong Kong business that was set in April 2022. Meanwhile, its PBT target in Hong Kong was exceeded, with some HK$139 million (S$23.9 million) of PBT, compared to the target of more than HK$100 million.

The company has maintained its PBT targets of HK$250 million in 2024 and HK$500 million in 2025 for the Hong Kong business. However, it has reduced the gross revenue and net revenue targets.

iFast said its 3-year plan is to make &ldquo solid progress&rdquo as a digital banking and wealth management fintech platform with a &ldquo truly global business model&rdquo accelerate Hong Kong growth and effectively deliver on ePension services and effectively develop fintech services that complement its banking and wealth management platforms.

&ldquo The ePension division in Hong Kong will be an important growth driver in 2024 and 2025, while the overall wealth management platform is expected to continue to show healthy progress,&rdquo iFast said.

Shares of the company fell 1.5 per cent on Wednesday to close at S$7.93, before the results.