IFAST CORPORATION LTD.
AIY.SI
iFAST Corporation - Recovering From a Tough 1H16
- iFAST’s 3Q16 results were far better than the tepid 1H16. However, it was still dragged down by its China start-up costs, which we had previously highlighted.
- Without the China operations, the group’s net profit would have actually grown 59.3% QoQ.
- Going forward, we expect the costs to continue dragging down the group’s profitability despite its new investment product categories faring relatively well.
- With the outlook still cloudy, we maintain NEUTRAL with an unchanged DCF-backed TP of SGD0.88 (1% upside).
China will likely continue to incur expenses.
- iFAST Corp’s (iFAST) China business, which had a soft launch in March, continues to be in the start-up phase.
- The losses generated from its China operations increased by 257% YoY to SGD1.06m in 3Q16 and 302.3% YoY to SGD2.62m in 9M16. To date, the China operations have signed up over 35 funds houses with over 1,400 funds on the platform as at end-3Q16.
- The company is also in the midst of expanding the number of entities using its platform as well as increasing its pool of wealth advisers as part of its platform-cum-IFA incubator strategy.
Maintain NEUTRAL with an unchanged TP of SGD0.88.
- Going forward, we do expect the China start-up costs to continue to drag down the group’s profitability despite new investment product categories faring relatively well. With the outlook still cloudy, we maintain NEUTRAL.
A much better 3Q16.
- After a disappointing 1H16, the group’s operations excluding China, reported a 59.3% QoQ NPAT growth while assets under administration (AUA) grew 6.6% QoQ to a record SGD6bn as at 30 Sep 2016. Both net revenue and net sales rebounded as well.
- Its Singapore operations’ NPAT increased 39.4% QoQ to SGD2.6m in 3Q2016, as net revenue grew 9.2% QoQ in the quarter, and AUA grew 5.5% QoQ.
Jarick Seet
RHB Invest
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http://www.rhbinvest.com.sg/
2016-11-02
RHB Invest
SGX Stock
Analyst Report
0.880
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0.880
